Gov. Rick Snyder held an economic summit last week where he emphasized what has become the consensus among many experts — Michigan’s economic future depends upon one word. Talent.
Snyder talked about the need for college students to choose a relevant academic major and for universities to make a greater effort to link curriculum taught and degrees awarded to the needs of the business community.
What Snyder should have advised is that today’s young students must pursue a career that rewards more than just talent. In the near future, workers will have to be imaginative, creative, innovative. Or they may be replaced — by a machine.
That’s the frightening conclusion reached by the Associated Press after a 3-month investigation into the future of the American economy. The lengthy, three-part series of stories summed up the state of American jobs this way: They’re being obliterated by technology.
This is not just about enhanced robotics on factory floors. The jobs that soon will become obsolete range from bookkeepers to office managers, from travel agents to legal assistants. Any job that involves repetition and basic tasks, rather than creativity, is in danger. Whether you work on an assembly line or in a cubicle, your paycheck may soon disappear.
This alarming trend affects every sector of the economy, nearly every type of business, from large corporations to small startup companies.
In the short term, we have already been hit by this transformation. Here’s the startling news: In the United States, half of the 7.5 million jobs lost during the Great Recession of 2008-10 were paid middle-class wages, ranging from $37,000 to $68,000. But only 2 percent of the 3.4 million jobs gained since the recession are in the mid-pay category.
Some economists say millions of white-collar workers will need retraining if they ever want to work again.
This is what the 2012 election should have been about.
This issue is not about liberal or conservative, Republican or Democrat. Cutting taxes, raising taxes, reducing spending, creating another stimulus spending package — none of that matters much in the face of the rapid changes happening in our economy that could mean the loss of many millions of middle-class jobs, the outright disappearance of certain occupations, and significantly lower wages for a large swath of the U.S. workforce.
The reason why we’re experiencing, essentially, a jobless recovery — one that has not produced the typical “snap-back” in jobs lost during the downturn — is not due to budget deficits or the sequester or outsourcing or changes to the Bush tax code. In fact, it has nearly nothing to do with Washington.
“The global economy,” AP reported, “is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they’re on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories … are starting to disappear.”
After interviewing dozens of labor force experts and employers, the Associated Press found that the past seven years produced such an unprecedented acceleration in technology that jobs are now becoming obsolete in the service sector, home to two-thirds of all workers.
Starting with the recession, employers discovered that they can do more with less people, that they can operate more efficiently, and with fewer employees, by relying on the latest technology. As they get leaner, companies’ profits rise and long-term legacy costs fall.
Some observers may want to dismiss this scenario as a case of futuristic assumptions running wild, with prognosticators envisioning a science fiction world where robots and machines take over.
“Your tablet (computer) is just 2 or 3 years old,” responded one analyst, “and it’s already taken over our lives.”
Some of the new high-powered machines are almost capable of thinking.
Software is picking out worrisome blots in medical scans, running trains without conductors, organizing Google+ chats for corporate “meetings,” spotting profits in stocks trades in milliseconds, analyzing Twitter traffic to determine where to sell certain products, sifting through documents for evidence in court cases, aiding with the design of newspaper pages and advertisements, and sorting returned library books.
Researchers looking further into the future have produced some staggering predictions, especially with regard to the automobile.
Three years after Google invented the first automated vehicle, California and several other states — Snyder hopes Michigan will be next — are rewriting the rules of the road to make way for driverless cars.
The result could be that another facet of the economy that seemed immune from technological displacement could disappear — no more bus drivers, urban/suburban deliverymen, long-haul truckers. Even cabbies jobs’ may not be safe.
“All those jobs are going to disappear in the next 25 years,” predicts Moshe Vardi, a computer scientist at Rice University in Houston. “Driving by people will look quaint; it will look like a horse and buggy.”
Economic historians have noted for decades that each wave of new technology, after a bumpy transition, produced more jobs, not less. The blacksmiths gave way to the autoworkers. This time, the experts aren’t so sure.
One employer told AP that he appreciates a special feature of his newest robot: “It doesn’t take vacations or complain about anything.”
Duane Ricketts of Webb Wheel Products in Cullman, Ala., said he hasn’t added a factory worker in three years, though his company is making 300,000 more brake drums annually, a 25 percent increase, because of robotics.
“Everyone is waiting for the unemployment rate to drop, but I don’t know if it will much,” Ricketts said. “Companies in the recession learned to be more efficient, and they’re not going to go back.”
Another company president said that he cut 40 of 100 workers since the recession while increasing revenues and profits through new technology. He could hire 10 people, but he’s holding back in favor of investing more in automation and software.
The high-tech methods of running a business have also dramatically affected entrepreneurs and startup companies, allowing them to hire few people. One employer who started a web-based business has just two employees. Without the power of “cloud” computing, he said, he would have needed five to 10 workers and that would have made the new venture untenable.
Experts say that the service sector is now part of this sudden economic transition due to the emergence of a “self-serve world.”
Beyond the explosive growth in online shopping, we now have self-serve checkouts at stores, self-help products such as Turbo Tax, self-service check-ins at airports, and self-imposed secretaries/assistants with the help of Apple’s “Siri,” the talking, interactive smartphone software.
The latest casualty of automation is the cash register, which may soon be extinct due to smartphones and the iPod Touch, which allow for “mobile checkouts.”
As for ATMs, they replaced many bank teller jobs and now these high-tech kiosks are being shoved aside in favor of mobile devices.
So-called smart meters are the innovation that is transforming the way utility companies operate.
The number of meter readers in the U.S. plunged from 56,000 in 2001 to 36,000 in 2010. Within 10 years the number of jobs will be zero.
In 10 years, the middle-class lifestyle may disappear.
A common refrain among researchers and other experts is that developed countries across the globe may face years of high middle class unemployment, social discord, divisive politics and falling living standards.
And, most important, hopes dashed.
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