ROBOTS VERSUS THE MIDDLE CLASS

Bloomberg
Among the challenges facing the middle class is one that will likely go unmentioned in the US presidential campaign: What happens when the robots come for their jobs?
Don’t dismiss that possibility entirely. About half of US jobs are at high risk of being automated, according to one recent study . And the middle class may be disproportionately squeezed. Many lower-income jobs, such as gardening or day care, don’t appeal to robots. But many once-secure middle-class occupations -trucking, financial advice, optometry , software engineering -have aroused their interest, or soon will. (The rich own the robots, so they’ll be fine.) This isn’t to be alarmist. Optimists point out that such technological upheaval has benefited workers in the past. The Industrial Revolution didn’t go so well for the Luddites whose jobs were displaced by mechanized looms, but it eventually raised living standards and created far more jobs than it destroyed. Likewise, increased automation today should boost productivity, stimulate demand by driving down prices, and free many workers from drudgery to focus on more creative pursuits.But there’s no guarantee of a smooth transition. In the short term at least, the economy is probably in for what John Maynard Keynes called a “phase of maladjustment“ as workers struggle to catch up to technological changes. That could mean depressed wages, widening inequality, increased unemployment and deepening social problems.

The Middle Class

Easing this maladjustment for the middle class is likely to become one of the central public-policy challenges of our time.

The first step, as Erik Brynjolfsson and Andrew McAfee argue in “The Second Machine Age,“ should be rethinking education and job training for the robotics economy . Easier said than done, of course. But curriculums -from grammar school to college ­ should evolve to focus less on memo rizing facts and more on creativity and complex communication. Vocational schools should do a better job helping students work alongside robots and fostering problem-solving skills.

And technology itself can be part of the answer. Online education may never replace the traditional kind, but it can supplement it. Equally important, it could make extra training and instruction -tapped more frequently during the course of a worker’s career or careers -affordable. Professionals trying to acquire new skills will be able to do so without getting into debt.

The challenge of coping with automation underlines the need for the US to revive its fading business dynamism: Starting new companies must be made easier. In previous eras of technological flux, entrepreneurs smoothed the transition by dreaming up new ways to combine labour and machines. The best uses of 3-D printers and virtual reality haven’t been invented yet. The US needs new companies that will invent them.

Finally , because automation threatens to widen the gap between capital income and labour income, taxes and the traditional safety net will have to be rethought. Adding an equity component to Social Security , for instance, would be one way to spread the ownership of capital. Taxes on low-wage labor need to be cut, and wage subsidies such as the earned income tax credit should be expanded: This would boost incomes, encourage work, reward companies for job creation and reduce inequality . The next editorial in this series will look more closely at tax reform.

One thing people tend to forget about the Luddites: Even if their solution was crazy, the problem they foresaw was real. Technology will improve society in ways big and small over the next few years -yet this will be little comfort to those who find their lives and careers upended by automation. Destroying the machines that are coming for our jobs would be nuts. But policies to cushion the victims and help workers adapt will be indispensable .

Source: The Economic Times
Advertisements

Author:

Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s