President Trump is not alone in pointing his finger at immigrants and trade as a source of job losses in the United States, but according to science and economics, he is pointing his finger in the wrong direction. According to a recent study at MIT, industrial robots eliminated 670,000 American jobs from 1990 to 2007. With artificial intelligence and great leaps forward in both robotics and machine learning, the number of jobs lost to automation so far is just a drop in the bucket. It is time to prepare for a new world of work, and startups are in an amazing position to take advantage of new opportunities.
Automation has been killing jobs for decades
Last century, 41% of American workers were in agriculture. Today, that makes up about two percent of the workforce. That means 39% of American workers were displaced by technology over a period of time that was not noteworthy in terms of technology compared to the revolution we are experiencing today.
While job losses to technology are nothing new, many Americans seem to have the wool pulled over their eyes to this fact. Rather than looking for the true cause of job losses, politicians pull at heart strings and offer over simplified answers to complex problems.
Rhetoric from Washington would lead us to believe that when the United States lost jobs in manufacturing that the nation produces and exports less as a result. President Trump has called NAFTA a disaster and a job killer, citing a large trade deficit with Mexico. However, in the period since 1990 where MIT studied factory job losses from automation, manufacturing output in the United States rose by 172%. In both good and bad economic times, manufacturing productivity increases overall, according to Bureau of Labor Statistics data.
Businesses have a unique opportunity to help workers shift
Today’s business leaders are in a position to help workers shift to a new role. Just as workers migrated from farms to factories and offices as we reached never levels of automation in agriculture, the same must happen in other industries. This requires a concerted effort by business leaders, government leaders, and the workers themselves.
The manufacturing jobs that are gone are, for the most part, never coming back. No change to NAFTA or any other free trade agreement will have a meaningful, long-term impact. However, all is not lost for those workers. There are still jobs that need to be done. The key is matching the right workers with the right jobs.
I travel frequently around the United States and regularly see help wanted signs posted in businesses. Yet at the same time, there is a complaint that there are not enough jobs available. The issue here is that workers want a better job or one similar to what they did in the past. If manufacturing jobs are gone, going back to the factory is not an option. In this case, workers have to choose between a less desirable job or training for a better one.
In areas with a focus in technology, like Silicon Valley, there is a shortage of qualified workers. Companies can’t find workers willing to come for $100,000 or more per year! With that type of wage sitting on the table, businesses may be able to hire and train workers to meet their specific needs. Code schools have popped up as a potential solution to this need, but there is still a long way to go.
Many job losses are concentrated in specific regions like The Rust Belt and the Deep South. There is a great potential to bring the skills to these workers to fill the roles needed. Thanks to remote working, employees can sit nearly anywhere in the world with an internet connection to meet the requirements of a modern job. Business leader Dan Gilbert saw an opportunity and moved his company, Quicken Loans, to Detroit. The company now employs over 3,000 workers in the region, once a manufacturing hub for car companies like “the big three” automotive companies Ford, GM, and Chrysler.
Universal income may be the future of the American workforce
A concluding thought: what if the jobs will never come back, ever? What if robots and AI are on the way to completely replacing workers in agriculture, transportation, logistics, retail, food service, and anything that has a possibility of being automated?
Tesla and Space X CEO Elon Musk, a serial entrepreneur with big dreams for the energy grid and space travel, believes “universal income” may be the only viable long-term solution. In this futuristic scenario that looks more like an episode of Star Trek than a modern city, robots and automation could handle so much of our needs that many people would simply not need to work. That is where universal income comes in.
If people could have all basic needs like food, housing, and clothing, by a universal income system, something that looks like a hybrid of our current welfare system and many country’s universal healthcare systems, some people could get the basic necessities covered to eliminate poverty without a need for a large number of people to work at all.
This Brave New World is a long way off, but closer than many people realize.
Think forward when planning your career
When thinking about your own career, take this into account. You never know exactly what the future will hold. Many of today’s jobs didn’t exist when Generation X went to college, and many jobs that are needed over the next decade don’t yet exist today. By being future focused, improving your skills and education, and have a willingness to adapt and pivot, you are setting yourself up for the best long-term career success.