Systemic Unemployment – now it kills (Addended)

George Rebane

[This is the addended transcript of my regular KVMR commentary broadcast on 29 November 2017.]

Longtime listeners to these commentaries are aware of the approaching Singularity – when super-intelligent machines match and then exceed human intelligence – and what is happening with jobs and employment in these pre-Singularity years.  As machines replace more and more humans in the workplace, and the fewer newly created jobs call for workers with skillsets that require higher intelligence to master, what we have been witnessing is the rise in systemic unemployment in America and other developed countries.  Today, the estimated number of Americans systemically unemployed ranges between 70 and 90 million.  These are people who cannot sell their labor for wages that will maintain their former quality of life.

A new and alarming symptom of this socio-economic disease is that we have started noticing “deaths of despair” among the class of workers who traditionally had excellent jobs and great prospects for improving their careers and lives.  According to two academics who first discovered this symptom about two years ago, the increasing mortality rates for working age whites “with low levels of education” have now been confirmed.  Nobel Prize-winning economist Angus Deaton and his fellow Princeton University professor and wife, Anne Case report that the death rates for these white workers have increased while the death rates for other demographic groups such as Hispanics and blacks continue to improve.  (more here)

The causes attributed to this sad state of affairs focus on the changing nature of America’s culture, a subject we have also covered.  Our educational system is broken in several important ways.  A most important one is that kids graduate from high school without any marketable skills along with a carefully instilled yet unrealistic self-image.  Workers in the 40 to 55 age groups have had either several jobs with no definite career direction, or a career that suddenly has disappeared from the job markets.  Drs Deaton and Case also point out that our family structures have weakened markedly with soaring divorce rates and fragile cohabitation relationships that provide little or no support to the dejected and desperately unemployed.  In short, what they call the “pillars of life” – work, family, and church – have crumbled for these white workers, whom we may consider as the early harbingers for what will only get worse as more people permanently lose their ability to earn living-quality wages.

As we may expect, the increasing mortality rate for this demographic has been impacted by terminal alcoholism, drug overdoses, and suicide.  To fight this growing epidemic that sooner or later will affect other demographic classes, social scientists, economists, politicians, and even some very rich business people have started saying that now may be the time to try some forms of guaranteed national income.  Two countries – Canada and Finland – have launched test programs to see how a sample of their un- and under-employed will fare with such unearned income. (more here and here)

In the meantime, our government, desperate to protect lower paying jobs, is upping the scrutiny of workers we admit through the H1-B visa program, designed to attract highly skilled people to fill the shortfall of American workers. (more here)  And regionally, smaller communities lacking large manufacturing and service industries were thought to be more insulated from technology-driven unemployment.  A recent study by MIT’s prestigious Media Lab throws water on that hope, and reports that smaller cities and towns, due to their small high-tech worker base, are even more susceptible to automation with the loss of lower level jobs such as cashiers and waiters.  This study (here) is corroborated by other universities and adds one more reason to why it is difficult to create new jobs in Nevada County.

The bottom line is that almost half of current occupations, or kinds of jobs, in the US are at “high risk” of being automated out of existence in the near future.  And please don’t accept, without large doses of evidence, the popular myth that new technologies create as many or more jobs than they eliminate.  With the advent of smart and soon super-intelligent machines, that is pure pabulum, dispensed only to keep politicians in office while they kick the systemic unemployment problem down the road.  In the meantime, keep your eye on the mortality rates of workers frustrated and without hope.

My name is Rebane, and I also expand on this and related themes on Rebane’s Ruminations where the transcript of this commentary is posted with relevant links, and where such issues are debated extensively.  However, my views are not necessarily shared by KVMR.  Thank you for listening.

[Addendum]  Some more points to ponder during these pre-Singularity years.  One of the more reprehensible and destructive aspects of progressivism cum socialism has always been their generation of bad public policies that wind up killing jobs in the service of ‘social justice’.  As the progress of technology enables machines to replace more and more humans in the workplace, the Left continues to double that pain by eliminating even more lower level jobs (and thereby abet automation) through their horribly miscreant laws and regulations that mandate and constrain productive economic behavior.  In ‘Forget Robots: Bad Public Policies Could Be Bigger Job Killers’ Lauren Weber provides perspective for this phenomenon by citing some really eye-opening and relevant statistics.

And to show the cynical nationwide impact of such policies, consider that today there are 6,100,000 unfilled jobs in the US according to the Department of Labor.  (more here) These are jobs that Americans either refuse to do or, sadly, not enough of us are qualified to do.

Comments

[Account Deleted]

Another good commentary on a growing problem. I'm wondering how a guaranteed national income is going to help formerly productive people feel OK about the fact that they are now useless as producers of value. The proposed GNI is merely formalizing the current hodgepodge of unemployment, food stamps and the myriad of other like minded welfare schemes. They will still feel useless and with that comes a host of social problems. I can tell you now that a majority of humans put on a program of 'stay home and collect a check' will not become the poets, painters and potters that the visionaries dream of in 'releasing' their artistic souls. They will (for the most part) devolve into sullen, unhappy drug (of some sort) addicts. It will for a while, anyway, keep the masses from rioting and upsetting the social order of the ruling class, but in the long run it will prove to be the undoing of whatever country that makes it a part of life and still tries to maintain order as a republic or a democracy.
Good luck with the 'tests' of such schemes. Until they are permanent, nation-wide and fully instituted you will not have the real results of that kind of social engineering.
On a different note but of the same subject - AI certainly has the capabilities of high speed learning, global attention span and encyclopedic memory of a vast store house of knowledge. Coupled with a rational reasoning system (whiteness built in!) and hopefully freed of human histrionics and prejudices, it will give humans quite a run for their money in many fields. However - the machines will only learn what they have the input capabilities for. Informal human interaction, life experiences not made a part of the WWW and other random activity and encounters will be mostly unavailable to the machines tethered to strictly digital input. I see this as the biggest chasm between machines and humans. The machines can learn about human emotions and feelings from currently available documents, papers, essays and works of literature. But they will not - in any current form - be able to fully absorb and understand the constantly changing human condition. Will that input capability change for the better? Who knows?
No matter what the future holds, I will still fear certain humans more than any machine.

[Russ]

As many as 800 million workers worldwide may lose their jobs to robots and automation by 2030, equivalent to more than a fifth of today’s global labor force.

That’s according to a new report covering 46 nations and more than 800 occupations by the research arm of McKinsey & Co.

https://www.bloomberg.com/news/articles/2017-11-29/robots-are-coming-for-jobs-of-as-many-as-800-million-worldwide

[L]

Scott, good comment, but I didn't hear DrG say a billion flowers would bloom, did you? L

[George Rebane]

L 844pm - Good point. And the reason it's hard to talk about the billion flowers is that no one knows what will then bloom; that's why they call it the Singularity.

[Russ]

Scott, You wrote: "Informal human interaction, life experiences not made a part of the WWW and other random activity and encounters will be mostly unavailable to the machines tethered to strictly digital input."

From what I can understand, these informal everyday events are described in detail on Facebook, Twitter, Instagram and other social media sites. These databases of human activities are the leaning tool the AI needs to learn these informal interactions and mimic them in there interaction with humans. The current voice of AI has become more human by listening to humans and learning the verbal nuance. Do you have an Echo device? If you have had it for a year, you would note the improvident in voice quality. How about Siri? The latest update is reported to have improved voice response, but my experience is limited here, I do not use Siri, although I have an iPhone 6. Every person on the internet interacting with others on social media is providing more data and situations for the AI to learn about humans and how they act. We are the trainer for tomorrows super AI. It is only a matter of time, the computers (all devices, smartphones, tablets, laptops, and desktops) keep increasing in speed and memory. These devices are now capable of writing their own code, and we will continue training the latest version of that system with our interactions on the network. Every one of your interactions on the net is training the supercomputer of tomorrow. Maybe we should all go back to snail mail and shopping at the mall.

[Account Deleted]

That's a good point Russ. I had thought about that after I posted, but there is a whole world out there that doesn't use all of those digital devices. I know I sure don't. The idea of inviting a digital 24/7 spy into my home goes against my grain.
Yes - a large and rapidly growing number of folks are, in some way, wired into the digital network full or almost full time. But there is still a huge number of humans that have a whole different lifestyle and attitude towards things digital. I suppose what I should have said is that the machines will then pick up on the experiences of one large segment of humans but completely miss the others. Just as the coastal elites completely missed what is going on in the heartland and small towns across America resulting in their being so shattered by Trump's win, the machines will learn a very skewed version of what the human experience is. Even with folks like me that use the net some times. I have a large part of my life that flies under the radar simply because it isn't being detected by anything that will transmit or record the info to the net. How long that sort of lifestyle will go on is an open question. Certainly people living in urban areas are already having their physical movements and activities constantly recorded by camera and credit card trails. If the country goes to an all digital currency, your privacy will diminish to almost nothing.
And L : No - George didn't predict the blossoming of a thousand little creative buds. I should have credited that to a very common miss-perception of GNI that I hear by many of that scheme's ardent supporters.
I think our dear leaders are far more aware of this growing problem of permanent unemployment than they let on. As it is with our national debt and unfunded social liabilities, there is very little or no political capital in pointing out the looming iceberg. Happy talk about the brightest future ever usually wins the votes.

[Russ]

Scott, we are on the cusp of a cashless economy as it is more efficient and it is easier to detect fraud and collect information about the users.

Bitcoin bytes: "The Federal Reserve is considering adopting its own digital currency similar to bitcoin, according to the president and CEO of the Fed's New York branch

Stay tuned.

[Account Deleted]

Once we go to an all digital currency, the barter economy or other underground type of value exchange medium will go large. If fed law for example stays as it is re cannabis, and the feds mandate the use of only 'their' digital currency - legal sales of rec cannabis instantly goes to zero as that type of sale would automatically be rejected.
Interesting times indeed.

[Account Deleted]

Russ - I'm trying to find more about that info on the Fed "adopting its own digital currency similar to bitcoin". Would that be their own closed system just for their own internal use or are we talking about a mandated national currency?
If we all end up on the GNI, we can stay home and be be bit-miners!

[Russ]

Scott, A banker friend said he can see why the Fed would like to have a bitcoin account.  Just as they have a franc or peso account.  A bitcoin account would give them access to that market.

One dollar is worth 9798.00 in bitcoins. Think about what a five dollar initial investment would be today. I missed the boat.

[fish]

One dollar is worth 9798.00 in bitcoins. Think about what a five dollar initial investment would be today.

Think you want to invert that fraction Russ!

[Account Deleted]

Only if some one is willing to cash you out at that amount. It's all theoretical.
Like stocks or gold or tulips - a willing buyer and a willing seller.
Timing is everything.

[Account Deleted]

A dollar invested in the proper way can produce amazing results depending upon circumstances. Get the timing wrong and you might think you have done well but you have lost. The investment might have gone up a thousand fold but if it pays off in something that is soon to be held worthless what do you have? It always amuses me to hear folks talk about investing in gold as a long term held investment. "It's not like paper money - its real!"
Well - I have a truck load of food. That's real too. Are you hungry?

[Bonnie McGuire]

Funny thing happened at Safeway yesterday. When I walked in the door some guy said he'd just put a silver coin in a vending machine to get something and it gave him way too much change. Wonder if it really happened, or he was looking for a dumb, greedy ol somebody to partake in getting something for nothing?