The Rise of Machines, The Loss of Human Labor

The world is changing. Actually, since the day it began there has been change. That ancient Greek philosopher Heraclitus had a lot right when he said you can’t step into a river in the same place twice because the water is ever flowing on. The only thing permanent is change.

Change is disruptive. I’m not saying that’s necessarily bad, just saying that’s what it is, it disrupts. In the long ago past the disruption was slow to happen and there were long periods of time between one disruption and the next one. The greatest change the Industrial Revolution made was with technology. At first, technological change was about machination, machines that could do the same work of several persons and do it faster, and therefore cheaper.

In the beginning machination (technology) was an augmentation, something we used to aid us while still requiring lots of workers.

Let’s face it, the mind can’t leave something alone. Someone looking at a machine says, “I can make it better, make it do more things.” Someone looking at an old mechanical typewriter (the kind I learned to type on, said, “You know what, if I made it electrical you could type faster and get more work done.” Then someone looked at the electric typewriter and said, “You know what, you waste a lot of time fixing mistakes, what if you used a computer with a screen where you could see what you are typing, have keys that could backspace, delete a mistake and then retype it correctly.” So we now have computers with word processing. Then someone looking at that said, “It takes too much time to use your fingers to type, “What if you could speak into a microphone and the words would come out on the computer,” and on and on change goes. Now this type of change is not disruptive, doesn’t cost anyone their job, it just augments one’s ability to work faster, and better.

But then technology began to change from augmentation to disruption. Take picking cotton, for instance, and I picked cotton one summer in my youth. It’s very labor intensive, very hard on workers. Then one day someone said,” Phooey, why work this hard. I’ll build a machine that will pick the cotton and you won’t need lots of people doing the work. In 1935 the Rust brothers invented a cotton picking machine and once the price of the machine was low enough no farmer ever hired a person to pick their cotton again, it is all done now by machines. That’s disruption.

There are two driving factors pushing technology forward: the creative mind and labor costs. You know the old saying, “If it ain’t broke don’t fix it.” Well, the new saying is, “It’s there so let’s make it better.” This latter thinking has narrowed the period for disruption from centuries to decades to years to months. Open source denotes software for which the original source code is made freely available and may be redistributed and modified. Everyone and anyone has access to make changes and because of this changes fly at us faster than time. We call this progress.

There is a very interesting book you might read. It’s titled, Augmented: Life In The Smart Lane, by Brett King. He writes: “The technologies we are exploring today, such as artificial intelligence, gene editing, nanoscale manufacturing, autonomous vehicles, robots, wearables and embedded computing, are radically going to redefine the next age of humanity.” All this is both augmenting and disrupting our lives and will continue to do so.

As more jobs are lost due to technology how many jobs we be available for those who lost their job to be retrained for? If technology displaces more and more people out of the work force how are they going to live? This is a question some are asking, but it’s a question we all should be asking and contributing answers.

I bring this up because of this article in the Wall Street Journal: “The Robots Are Coming for Garment Workers. That’s Good for the U.S., Bad for Poor Countries.” The full article can be found HERE.

It is estimated that some 60 to 75 million are employed in the garment industry. The value of all they produce is estimated to be around 621 billion dollars. The costs of manufacturing apparel can be very high therefore the wholesale price of garments will be high leading to high retail prices leading to low sales. We, the consumer, want good clothing at low prices because it’s not a discretionary expense but a necessary expense that we have to pay for our everyday living. Very fancy clothes come with very fancy prices. For the apparel market to meet our economic needs they must keep prices down so reasonable retail prices will fit our budgets.

As in all businesses, labor is the largest expense and as wages are being driven up so too the wholesale price of garments rise causing retail prices to rise affecting our budgets and we, the consumer, turn to markets that can give us good prices. For these reasons apparel manufactures shifted to overseas production where labor costs were lower because national labor wages were lower.

There is a whole other subject in the manufacturing of apparel under the heading of “sweat” shops, attempts by owners to keep prices down through low labor costs, long hours of the workers, poor working conditions, in other words, the least a manufacturer can get away with the lower the costs and the greater their sales. But this is not about this, although the Wall Street Journal makes mention of it.

What is important here is the shift from people labor to machine labor and the changes that is making. Driven in part by the national consciences over slave labor and sweat shops, apparel manufactures are turning to machines. But getting there is changing ther dynamics of many “third-world” nations.

“Bangladesh offers a stark illustration of the problem. Analysts estimate it needs roughly two million new jobs a year to keep pace with its expanding labor force, with garments offering many of the best opportunities.”

When a lot of the apparel manufacturing moved overseas, the mass amount of workers needed helped bring some countries out of poverty through the employment of so many of their citizens. As this article points out, with machination those jobs are being lost. But not lost is the nation’s GDP because garments are still being produced and higher rates under machination, it’s just that workers (people) are needed less.

“If you cannot absorb [young people] in productive activities, they will do something. And the something they will do may not be socially pleasant,” said Zahid Hussain, the World Bank’s lead Bangladesh economist. “It’s a social time bomb.”

And that’s the problem. All those people employed by the garment industry were making an income that raised the economics of their families and gave them work. These workers began to enjoy a lifestyle previously denied them. With the loss of their jobs so too goes that increased income.

So what’s the answer? Deny progress. Stop the rise of machines? Some are beginning to propose a “Basic Income.” It sort of follows these characteristics:

  1. Periodic: it is paid at regular intervals (for example every month), not as a one-off grant.
  2. Cash payment: it is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not, therefore, paid either in kind (such as food or services) or in vouchers dedicated to a specific use.
  3. Individual: it is paid on an individual basis—and not, for instance, to households.
  4. Universal: it is paid to all, without means test.
  5. Unconditional: it is paid without a requirement to work or to demonstrate willingness-to-work.

Even some conservatives have been attracted to this idea, even though it requires the government to confiscate money from those making it and transferring to those who don’t.

It’s a question whose time has come.

After reading this story you might want to also look at the thoughts of economist Walter Williams. He writes in The Daily Wire:

“If technology is destroying jobs faster than it’s creating them, it is the first time in human history that it’s done so. Actually, the number of jobs is unlimited, for the simple reason that human wants are unlimited — or they don’t frequently reveal their bounds. People always want more of something that will create a job for someone. To suggest that there are a finite number of jobs commits an error known as the “lump of labor fallacy.” That fallacy suggests that when automation or technology eliminates a job, there’s nothing that people want that would create employment for the person displaced by the automation. In other words, all human wants have been satisfied.”

His contrary argument to this story can be read HERE.