What happens when high-status, white-collar work starts getting automated away?

Nobody cared when many millions of blue-collar men were thrown on the scrap heap. White-collar workers won’t go so gently into the good night of obsolescence

“We wanted flying cars, instead we got 140 characters.”
Peter Thiel

“Machines with superhuman intelligence could repeatedly improve their design even further, triggering what Vernor Vinge called a ‘singularity’.”
Stephen Hawking

“Any sufficiently advanced technology is indistinguishable from magic.”
Arthur C. Clarke

I’ve spent the last few weeks reading LinkedIn posts about how so-and-so has fired their marketing person/team and replaced them with ChatGPT. As someone who was technologically disrupted out of one industry (print journalism) about a decade ago and now faces the prospect of being disrupted out of another (content marketing) in his fifties – early fifties, but I suspect that’s a detail that won’t be much noticed by the 23-year-old junior HR staffers reading any of my future job applications – automation has been on my mind of late.

Fear not, this is not yet another article from a jumpy content creator doth protesting too much about the inadequacies of generative AI. (I’ve already written that article.) I don’t think generative AI, or any other technological advance, is going to put vast swathes of the white-collar workforce out of a job in the next year or two. But I do think that it’s entirely feasible that within the next 5-10 years more sophisticated AI than currently exists, in concert with a range of other currently unimaginable technological advances, will create a massive imbalance between the demand for white-collar work and the supply of it.

More on that shortly, but first a little background.

Are we witnessing the end of the Great Stagnation?
A bit over a decade ago, economics professor, author, podcaster, blogger and public intellectual Tyler Cowen published The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. To summarise, Cowen investigated why life had been a bit shit for many Americans – especially those in the bottom three quintiles of the income distribution – since the 1970s.

Cowen concluded that by the early 1970s the US had picked all the low-hanging technological fruit (think indoor plumbing, electricity, refrigeration, the automobile, the plane, the radio, the camera, the television, splitting the atom etc) and hit the wall. Many other experts have made more or less the same observation. Sure, the Internet and the entertaining communications technology it has spawned is great, but it's not world-changing in the way that, say, the electrification of homes or the widespread availability of motor vehicles was.  

It’s probably not coincidental that what’s been labelled ‘the Great Compression’ (of incomes) ended and what Paul Krugman has labelled ‘the Great Divergence’ started around the same time America and other first-world nations stopped frenetically innovating.

I suspect that when fast-paced technological innovation means both the workers and bosses can do well for themselves, both Labour and Capital have what we’d today call an abundance mindset rather than a scarcity one.

In practical terms – and this is very much the historical exception rather than the norm – this meant those at the top were happy for those below to get a reasonable slice of the national income pie. I suspect that even from 1945-1975 many CEOs believed they should be paid more and taxed less, and that their underlings should be paid less and taxed more. Nonetheless, it’s a matter of historical record that they didn’t aggressively mobilise in pursuit of their narrow class interests. It’s possible some even believed that it was acceptable that they earned just 30X what the average worker did, rather than 300X.

But when resources get scarcer, everybody gets much more focused on maximising their share of them. As I’ve banged on about many times in this Substack, for the last four decades the bosses have been spectacularly successful at maximising their share of resources, usually at the expense of the workers.

But what happens to the distribution of wealth in first-world nations if a bunch of world-changing technologies, including but not limited to powerful generative AI, come online in the next five years?  

What if ‘learning to code’ isn’t an option?
For a range of economic, political and technological reasons, many blue-collar workers – primarily but not exclusively male ones – have been thrown on the ash heap of history over the last 40 years.

In many first-world nations, there are now rust-belt regions full of what were once proud and prosperous miners and manufacturing workers. Most of the children and grandchildren of those workers are short on life opportunities. Unless they can beat the odds and succeed educationally, those descended from people who once had secure union jobs that facilitated a middle-class lifestyle now have four choices:

1)     Insecure and poorly paid work in the gig economy

2)     Joining the military

3)     Going on welfare. (Given many blue-collar individuals have done manual labour that has resulted in wear and tear on their bodies, going on the disability pension is a popular and somewhat face-saving option.)

4)     A life of petty – or not so petty – crime  

With possible exceptions of becoming a cashed-up drug kingpin or joining the military, none of those options does much to increase the marriageability of blue-collar men. That means a blue-collar man can not only expect an impoverished, disenfranchised existence that feels meaningless, but also one that will be largely loveless and sexless. (Given the grim lives endured by men who failed to win the ovarian lottery, what’s surprising about ‘deaths of despair’ isn’t that there are so many of them, it’s that there aren’t a hell of a lot more.)    

An insouciant political class
Once upon a time, left-of-centre parties lionised blue-collar workers. These parties, which often still advertise themselves as ‘Labo(u)r parties’, could once have been expected to protect well-paid blue-collar jobs, or devote significant resources to ensuring blue-collar workers could retrain and find alternative employment, or provide unemployable blue-collar workers with the sort of generous support soldiers who’ve been wounded in battle receive.

But left-of-centre political parties long ago stopped caring about what happened to people who were too stupid to complete a uni degree and too reactionary to have the correct opinions on the heroism of 12-year-old gender transitioners. Especially around election time, right-of-centre politicians will pander to the cultural concerns of ‘heartland’ voters. But they are even less concerned by the human carnage wrought by capitalism’s creative destruction than their progressive counterparts.   

Granted, on those rare occasions blue-collar voters get the opportunity to kick their white-collar overlords hard in the nuts (see Australia’s 1999 republican referendum along with Brexit and Trump in 2016) there’s always a brief period of the chattering classes wondering why the proles are so enraged. However, the curiosity of the well-heeled is invariably short-lived.

But this is not an article about how those with little political power can and do get comprehensively fucked over, for that is a tale as old as time. This is an article about what happens when a class of people with political muscle find their comfortable lifestyles under threat.

Raging against the machines   
As Harry Truman observed, it’s a recession when your neighbour loses his job but it’s a depression when you lose yours. Likewise, automation is a concern when it’s vapourising the jobs of the working and lower-middle classes (e.g. bank tellers, cashiers, data entry clerks, journalists, travel agents, waiters), but it’s an urgent existential threat when it’s threatening the livelihoods of the upper-middle class (e.g. accountants, computer programmers, data analysts, financial analysts, investment bankers, management consultants, pharmacists, lawyers, software engineers).

If we accept that technological innovation is no respecter of persons and that many highly intelligent, impressively capable, and politically engaged haute bourgeoisie types are at threat of finding their job has disappeared, what happens then?

Let’s war game a few scenarios.

Scenario one: Other high-income work becomes available for the cognitive elite Human beings have been freaking out about being displaced by technology since the wheel was invented yet widespread joblessness is yet to come to pass. Despite the turbocharging of digital transformation during the pandemic, unemployment rates are currently at historic lows in many countries.

So, the argument that technology creates more interesting and better-paid jobs to replace the low-skill ones it destroys is persuasive.

Nonetheless, I’m not persuaded.

Presumably, everyone agrees that technology will – barring an asteroid impact, nuclear war or deadly pandemic – continue to advance until there is little need for humans to do anything they don’t feel like doing. For the last few hundred years, pundits have (correctly) argued that this date was far off in the future. But it no longer appears to be.

Ray Kurzweil, who functions as a Delphic Oracle to many tech-industry heavyweights, predicted the Singularity would happen by 2045 and that computers would have human-level intelligence by 2029. Tech company owners have invested billions of dollars in emerging technologies on the basis that Kurzweil is right a lot more than he’s wrong and I believe he is usually on the money. If Kurzweil’s timeline is broadly correct, the idea that the world’s software engineers can simply retrain to become spaceship pilots in the coming years is fanciful.      

Scenario two: Fully automated luxury communism breaks out
Given he had precisely zero chance of winning it, Andrew Yang attracted a lot of media and public attention during the 2020 Democratic Party presidential primaries.

That’s because he warned that automation was about to destroy many jobs and advocated for the introduction of a UBI (Universal Basic Income). Yang overegged the pudding, especially about the likelihood of millions of American truck drivers being automated out of their jobs, but I fear his broader argument is correct.

You can learn more about fully automated luxury communism here. To summarise, it’s essentially a much more generous and long-lasting version of the stimulus-payment-reliant situation many workers found themselves in during 2020 and 2021. Essentially, humankind gets to outsource everything to an army of robot farmers, miners, food preparers, garbage collectors etc and live like antebellum slave-plantation owners.

Fully automated luxury communism could well turn out to be less fun than imagined for people who rely on work to structure their lives, but I think most upper-middle-class types would thrive in such a future world.

To put it bluntly, they are disproportionately likely to possess the cognitive ability and personal initiative to make the most of a workless world. They could spend even longer studying at university, travel widely, dine at many more fine restaurants, learn languages, master musical instruments, cycle about in fetching lycra outfits, make the scene at salons, write books and generally partake of all the non-work activities time-poor professionals currently fantasise about doing but can rarely find the time for.

Yes, they’d no longer earn multiples of the median wage and therefore wouldn’t enjoy the social status that comes along with being a high-income earner. Presumably, a UBI would rapidly reverse the divergence of incomes that’s occurred since 1980 and return us to the days when the bulk of the population (accurately) identified as middle class.

But I suspect many tax lawyers, CFOs and financial analysts would relish the opportunity to jump off the hyper-competitive hamster wheel. And I think those who did would soon find non-income-related ways to signal their superiority to the hoi polloi.     

But the only way a UBI, let alone automated communism, can work is through a massive redistribution of wealth from the people who create and/or own the robot farmers/miners/food preparers/garbos to those who are now spending their days writing novels, learning French and sailing through the Greek Islands.

Fully automated luxury communism is my preferred option for the future. If I were writing this back in 1973, I would even be comfortable predicting that it was the most likely outcome. But after several decades of wealth gushing upwards rather than trickling downwards, I have my doubts about the upsides of technological progress being equitably shared without some major political conflict occurring first.  

Scenario three: A settlement is eventually hammered out
So, if newly unemployed upper-middle-class individuals aren’t going to have the option of transitioning to an equally well-paid and esteemed career, and they aren’t going to be ladies and gentlemen of leisure, what will happen to them?

Here’s a rough timeline of how I believe things are likely to play out.

1)     The upper-middle class’s unions, sorry, professional associations will do whatever they can to protect their members’ livelihoods. Expect to see a lot of busy work being legislated. For example, laws being introduced that require one or more human medical professionals to be present when robot oncologists are diagnosing cancer, devising treatment plans, and conducting surgeries to remove tumours.

But whether they benefit doctors, pharmacists or any other group of highly paid professionals with the capacity to make life unpleasant for unobliging politicians, these costly make-work schemes will eventually fall by the wayside.

2)     At this point, upper-middle-class types will become much more economically left wing. Nowadays, most well-heeled types describe themselves as being socially liberal but fiscally conservative. In practice, this means they champion gay marriage and action on climate change but violently object to having any more than a token amount of their wealth redistributed to the lower orders.

But it’s amazing how quickly one’s political views can change when one’s circumstances do. Once they believe they – or even just people like them – are at risk of technological obsolescence, I’d expect a lot of erstwhile libertarian wealth creators to soon start loudly demanding a much more Scandinavian approach to tax policy.

In the ordinary course of events, if the movers and the shakers are for a radical shift in the economic and political direction of a nation, it happens. Hitler was able to come to power in Germany not so much because he could whip the masses into a frenzy – though that was obviously handy – but because lots of anti-communist university professors, captains of industry and landholders bought what he was selling. Likewise, both Keynesian (1930-1980) and then Neoliberal economic policies (1980-present) were adopted because prominent academic, business, political and union thought leaders got with the program during, respectively, the 1930s and late 1970s.

So, will governments take from the Jeff Bezoses of the world to give to the Dr Ozs of the world? Here’s where things get complicated. There are a lot more doctors than there are tech-industry billionaires. But while doctors can give politicians lots of grief, they can’t threaten to shut down vital, or at least wildly popular, services the way tech-industry billionaires can.

It was considered a big deal when Facebook briefly blocked news outlets in Australia out of frustration with a Murdoch shakedown. Can you imagine how much influence Zuckerberg could have wielded if he’d threatened to remove Australians' access to Facebook for good? What concessions could Jeff Bezos win if he threatened to shut down Amazon in Australia? What about if Larry Page or Sergey Brin suggested that Australians might not be able to use any Google products?        

3)     As tempting as it might be to flee to their luxury New Zealand bunkers, I believe the world’s tech billionaires will eventually come to the table. At that point, some sort of settlement will be hammered out between the ruling class and the upper-middle class. Belatedly and begrudgingly, tech companies will agree to start paying enough tax to ensure displaced members of the upper-middle class – along with everyone else who has been disrupted out of a job – can enjoy a decent lifestyle.

Indeed, some of the more prescient and politically moderate tech-industry heavy hitters have already sketched out how this could be done. For instance, Bill Gates has suggested robots that replace humans should be taxed just like humans. As he told Quartz, “Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”

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