What happens when the 'good' jobs are automated away?
It appears digital transformation is no respecter of persons
Two-minute video summary:
The core of the revolt against global integration, though, is not ignorance. It is a sense, not wholly unwarranted, that it is a project carried out by elites for elites with little consideration for the interests of ordinary people – who see the globalisation agenda as being set by big companies playing off one country against another.
Larry Summers, former US Treasury Secretary
If elites didn’t believe they wielded unique influence, they wouldn’t spend so much time and effort deciding which stories to tell, which books to publish, which opinions to spotlight, and which behaviors and choices to exalt.
, 24/9/24
Historically, changes in technology have often automated physical tasks, such as those performed on factory floors. But AI performs more like human brainpower and, as its reach grows, that has raised questions about its impact on professional and other office jobs… Overall, AI is designed to mimic cognitive functions, and it is likely that higher-paying, white-collar jobs will see a fair amount of exposure to the technology.
Rakesh Kochhar, Pew Research Centre Senior Researcher, 31/7/23
This may turn out to be the most consequential fact about all of history so far. It is possible that we will have superintelligence in a few thousand days (!); it may take longer, but I’m confident we’ll get there… We expect that this technology can cause a significant change in labor markets (good and bad) in the coming years, but most jobs will change more slowly than most people think, and I have no fear that we’ll run out of things to do (even if they don’t look like “real jobs” to us today).
Sam Altman, OpenAI CEO, 23/9/24
We’ll be here all day if I have to show my working, dear reader, so I’ll ask you to take the following on trust.
*All complex societies require elites.
*Possessing above-average intelligence – being part of the cognitive elite, to use the modern terminology – has always been helpful to those seeking to rise in the world. If you gave Alexander the Great, Genghis Khan, Julius Caesar or Napoleon Bonaparte an IQ test, they would perform respectably.
However, ascending to and retaining powerful positions used to involve more than just being smart. Until about five seconds ago, most societies had little mobility. Alexander wouldn’t have been able to weep because there were no more worlds to conquer if he’d been born the son of a goatherd rather than King Philip II of Macedon.
But even if you were a cognitively elite individual in a society (post-revolutionary France, for instance) offering opportunities for advancement you didn’t get to seize the crown simply by pointing out you graduated from the Sorbonne. You had to display other credentials, not least physical courage.
*All elites feather their nests. Achieving and maintaining elite status, especially in these meritocratic times, requires unrelenting hard work and rigorous self-discipline. Unsurprisingly, members of the elite believe they are entitled to a “comfortable” lifestyle in return.
*While all elites engage in nest-feathering, like most things in life, it’s a matter of striking a reasonable balance. If there aren’t substantial rewards on offer for being part of an elite, you won’t get the best and brightest competing to be part of it. (For example, concern is regularly expressed that the rewards of being a politician are now too meagre to attract top talent into the profession.) On the other hand, you don’t want an elite that shamelessly hogs all the pie while treating the little people with lofty contempt.
*As you may have heard, relations between Anglosphere elites and the hoi polloi have grown ever more fractious as the neoliberal consensus has grown ever more shopworn.
How the automation of blue-collar work played out
Economists have long debated how many Anglosphere manufacturing jobs were outsourced and how many were automated away.
But at least in part due to automation, many millions of blue-collar men, and not a few blue-collar women, had their lives ruined. That wasn’t their inescapable destiny. It happened because Anglosphere business, political and media elites decided that maintaining their livelihoods and dignity wasn’t important.
After countless deaths of despair and the events of 2016, elites have now belatedly conceded that much of the individual and societal pain arising from deindustrialisation could have been avoided.
Germany held on to its manufacturing sector, a decision that looks increasingly far-sighted as the geopolitical situation degenerates.
The Nordic countries also preserved much of their specialised, high-value manufacturing, choosing to compete on quality rather than cost.
More importantly, they offered those displaced by the China Shock ‘flexicurity’.
Northern European nations are business-friendly. But it’s a two-way street when it comes to Capital and Labour. These nations also offer world-leading vocational education, generous welfare, and well-funded retraining programs to workers on the wrong end of Schumpeterian creative destruction.
Part of the reason Nordic countries can afford to provide ‘flexicurity’ is because they continued taxing upper-middle-class individuals, and everybody else, heavily when Anglosphere nations took a different path.
Scenes from the class struggle
The dominant ideology of a society works in the service of incumbent elites. If that weren’t the case, those incumbent elites would soon be replaced.
So it has been with neoliberalism and members of the ‘fiscally conservative, socially liberal’ Anglosphere upper-middle class.
The ‘fiscally conservative’ part of the equation means they have enjoyed rising incomes, falling tax burdens, soaring property values and flat or falling prices for much of the past four decades. The ‘socially liberal’ part means they have been free to pursue identity politics cause célèbres that facilitate a financial-sacrifice-free sense of virtue.
(Upper-middle-class individuals frequently take great pride in their enlightened views. However, cynical observers note that the moral crusades the Great and the Good periodically embark on always tend to advance, or at least not conflict with, their economic interests.)
Class is strongly correlated with occupation and wealth, but someone’s class position isn’t just determined by what job or how much money they currently have. A garbo who wins the lottery doesn’t automatically ascend to the upper-middle class any more than a cosmetic surgeon who gets struck off turns into a horny-handed son of toil.
Some people are both economically and culturally upper-middle class, but most are one or the other. Let’s start with the ‘economic’ upper-middle class. Picture of a bright young grad with a prestigious degree from an upmarket university. They land a role with a top-tier law or professional services firm or, nowadays, maybe a tech company. Their starting salary is somewhere around $120,000, almost double the median full-time salary in Australia. By the time they hit 30, they’ll likely be earning 3-4X the median salary. If they make partner, or reach the pointy end of the org chart, they could end up making 10-15X the median salary.
Such an individual isn’t independently wealthy. (This is the dividing line between the upper-middle class, who still need to work for a living, and the plutocrats, who invest for a living). Nonetheless, they have considerable economic power. They can parlay that into disproportionate political influence, if only because of their ability to make substantial political donations. However, members of the economic upper-middle class usually don’t seek or possess cultural power. (The masses may take notice if Meryl Streep praises Kamala but are unlikely to be much swayed by an endorsement from a tax lawyer they’ve never heard of.)
To understand why Anglosphere elites had such success maintaining the neoliberal consensus for nigh on four decades, we have to look to another faction of the upper-middle class, which is often described as ‘the clerisy’ or ‘the Cathedral’.
To be clear, not all academics and journalists are part of the Cathedral. In fact, only a handful are. ‘Cathedral’ academics and journalists are often not much better paid than their peers at less esteemed universities and media outlets. But they have lots of cultural clout and aren’t afraid to deploy it. And professors at top-tier universities and journalists at prestigious publications, such as the New York Times, have eagerly done plenty of heavy lifting for the powers-that-be during the neoliberal era.
Until recently, the Cathedral was all in on neoliberalism and obsessively focused on social justice issues while displaying a determined incuriousness about distributional matters.
The automation of white-collar work
Thanks to the tireless work of the Cathedral, members of the Anglosphere upper-middle class have spent decades unperturbed by their growing and ever more entrenched economic privilege while endlessly raging against injustices related to gender, sexuality and race. (Some especially cynical observers have even suggested that identity politics has played a useful spoiler role for the Anglosphere upper-middle class, Balkanising the lower orders while distracting them from their long-stagnant real wages.)
But that’s a Musing for another day. In the space left, I simply want to tease out what happens if lots of well-remunerated, high-status work gets automated between now and the end of the decade.
Here’s my forecast.
There will be a lot of happy talk about tasks, rather than jobs, being automated and machines handling all the grunt work while humans concentrate on “higher value” activities. (If your employer starts talking about “augmenting” you at any point, I’d recommend immediately changing your LinkedIn status to ‘Looking for work’.)
Once many tasks are automated, there will be insufficient work – high value or otherwise – to go around.
Enter the hiring freeze.
This is where the technological unemployment rubber will start hitting the road as lots of recent graduates with fancy degrees from upmarket universities realise the golden ticket they pursued so single-mindedly for so long isn’t going to grant them entry to Willy Wonka’s Chocolate Factory.
After the hiring freeze come the redundancy rounds; tentative at first but becoming more regular and brutal over time. Those of a certain age will be the first to be moved along, followed by those in early career roles. After that comes the people in mid-level and, finally, senior positions.
Regardless of how the Great Winnowing plays out, I’d be surprised if unemployment rates don’t start trending upward soon and prove difficult to bring back down again.
AI-driven automation will have disparate and contradictory impacts. Some white-collar workers will, in the short term, be largely unaffected. Not a few may end up earning more money while working fewer hours. But if artificial intelligence is available 24/7 at minimal cost you have to wonder why, over the longer term, any business would shell out for the human variety.
Could imminent Denmarkification await?
It’s amazing how quickly a reversal of fortune can result in a reappraisal of one’s deeply held political beliefs. Who doesn’t know an erstwhile fire-breathing Trot who came to defend capitalism once they started pulling down the big coin?
I’d imagine that what we’re about to start seeing among members of the upper-middle class is the obverse. That is, people who’ve long championed low taxes, deregulation, privatisation and small government will suddenly develop a more, shall we say, Scandinavian perspective.
This political realignment will, rightly, invite much schadenfreude-laced ridicule. While I’ll probably be unable to avoid the temptation to stick the boot in myself, I’d counsel those keen to hurl neoliberalism on the ash heap of history to keep the mockery to a minimum.
Upper-middle-class individuals are clever, capable individuals who understand how power operates. And how the current political system can be rejigged to ensure many more people don’t end up sharing the grim fate of Anglosphere manufacturing workers.
Plus, it’s always helpful to have the reliably self-interested bourgeoisie on your side in a political fight. And there will be a lot of fights ahead if AI turns out to be anywhere near as disruptive as it appears.