Despite the fact that technology has made life easier for mankind, if machines continue to move deeper and deeper into the work place, what will the humans be left to do?
I'm no Luddite, but a recent report of a new kind of robot makes me worry. A start-up company in the US has designed a robot that will help carry and move around potted plants. The company apparently took its robot on a field trial to nurseries and greenhouses and came back with firm orders from them all. Each robot is estimated to cost between $25,000 and $50,000.
I have nothing against robots, but I also read about the hundreds, nay thousands, of people waiting just south of the border in Mexico, who look for short-term work visas to do the work this robot is designed to do. Just a metaphorical stone's throw away from the border, farms are shutting down in California, and crops wither away due to a shortage of agricultural labour.
The US President, Mr Barack Obama, in his recent State of the Union address, talked about outsourcing and the steps his administration would take to make it unattractive for companies to move jobs overseas. It is true that manufacturing and service jobs have moved and will continue to move without any national loyalty. Those left behind are asked to upgrade their skills and take more high skilled jobs. But, even if it works, that's a long-term solution. Meanwhile, they join the ranks of the unemployed.
Move over, humans
Going back to robots that will carry pots, a guilty party that has not taken much of the blame for loss of jobs till now are the machines. As machines move deeper and deeper into the work place, what are the humans left to do? Machine layout is made more efficient, and the new machines require fewer people to operate. This is considered progress, and has been going on from time immemorial. The economists celebrate this with their term ‘labour productivity' — if we employ fewer people for the same output, labour productivity goes up.
During 2000-2007, productivity in the non-farm business sector in the US went up by 2.5 per cent a year and slowed slightly to 1.9 per cent a year during 2007-2011. Productivity can help boost living standards since firms can now increase wages, but alternatively, when demand is sluggish, firms can slow down hiring and show greater profits. And in spite of a sluggish economy, firms have been showing healthy profits and unemployment remains high.
At some level, we welcome the substitution of people with equipment and machines. These would include jobs that are hazardous; where the use of a machine would make human lives safer. Or the job may be routine — that it frees the human to make better use of his or her brain.
The coming of computing and information technologies has speeded up this process in significant ways. Think about the services now facilitated by technology which previously required human interaction. At the ATM, money is available when you want it, while you had to previously stand in a line at the bank teller. You get your statement online and fewer tellers are now needed. You do your banking online, and send fewer cheques. Many grocery stores have added self-check-out counters and fewer sales staff are needed. Online purchases have reduced the need for brick-and-mortar stores in some areas, most notably, book stores.
Sure, there are more people needed in the new industries, for managing logistics, in shipping companies, and so on. But on the balance, the deal seems skewed in favour of technology.
Technology has also created a world where a few smart and savvy individuals have started companies, and created products and services that has brought them enormous wealth while the jobs and services that employ people who spend their money on these products and services has been shrinking.
More leisure, less money
Meanwhile, the people, with less to do, are producing more babies. We hit 7 billion recently. What do we have for them to do? The International Labour Organisation warns that we need to create 600 million jobs over the next decade.
It reminded me of the apocryphal story about the head of a car manufacturing company who was touring the production area with the head of the union. Looking at the robots doing the welding, the executive tells the union president, ‘I don't think those robots will be joining your union and paying dues.' The union leader replies, ‘I hope you pay those robots well so they will be able to buy your cars.'
I think if we are not careful about the substitution between labour and technology, we will rapidly be in a situation where we have plenty of leisure from lack of work, and less money in the pockets.
Maharana Fateh Singh who ruled Udaipur for 45 years from 1885 is said to have had an employment-centred approach to technology. The British recommended a scheme to install a modern water system in Udaipur City, but when the Maharana learned that it would displace a large number of water carriers, he deferred its installation till they were found alternate employment.
Measuring labour productivity the way we do and aiming for its continuous rise is all right if there are not enough people to go around.
But we have lots of people and have to find ways to employ them gainfully. And not all of them are going to be software engineers or biotech researchers. There are people who will want to carry those pots around, and people who will stand behind sales counters. We need to re-think how we talk about productivity in a labour-surplus world.