Robotic Nation Evidence

You may recall back in February headlines like these:

White House sees about 2.6M new U.S. jobs in 2004

From the article:

The economy should shed its jobless label this year with the creation of about 2.6 million new positions, the White House forecast Monday... In the annual Economic Report of the President, the White House said the number of workers on U.S. non-farm payrolls was likely to rise to an average to 132.7 million this year from a 2003 average it thought would come in at 130.1 million... Last year, the Bush administration was looking for the creation of about 1.7 million jobs. But the economy actually lost 53,000 jobs, bringing the total number of jobs lost since Bush took office to 2.2 million... In part, the administration's expectation of a pick-up in jobs growth reflects a belief that growth in productivity, or worker output per hour, will slow from its recent elevated level. The fast pace of productivity gains has enabled businesses to boost output sharply with little new hiring. "After such an extraordinary surge, a period of slower productivity growth is likely as firms shed their hesitancy to hire," said the report, which was prepared by the president's Council of Economic Advisers.

Then the number of new jobs was upgraded, and you saw headlines like these a short time later:

White House: 3.8 million new jobs

From the article:

When the Bush administration issued the Economic Report of the President Monday, several news organizations reported there would be 2.6 million new jobs this year. But that number was based on the difference between projected average payrolls for this year and last year.

In order to achieve that number, a White House source explained Tuesday, the President's Council of Economic Advisers (CEA) is forecasting about 320,000 new jobs will be created every month this year. That would be about 3.8 million in total, or about 2.9 percent higher than the December 2003 total estimated by the Labor Department.

Now, just a month later, we see the reality of the situation: Payrolls disappoint again, up just 21,000 in Feb. From the article:

That weakness has also led to the slowest pace of wage growth for workers in 18 years, the longest average unemployment duration in 20 years and could step up the pressure on President Bush as he runs for re-election.

Payrolls outside the farm sector grew by just 21,000 jobs in February, the Labor Department reported, compared with a downwardly revised gain of 97,000 in January. The unemployment rate held steady at 5.6 percent.

Economists, on average, had expected 125,000 new jobs and unemployment at 5.6 percent, according to Briefing.com.

"This is a terrible number," said Sung Won Sohn, chief economist at Wells Fargo. "The economic recovery is almost three years old, and the economy should be producing 200,000 to 300,000 jobs per month."

Instead of 320,000 new jobs in February, as predicted by the White House, we got 21,000.

Peripheral articles like these are also starting to show up:

• Nearly Half of Black Men Found Jobless - From the article: " 'It definitely reflects that black men disproportionately have had to carry the burden of the unemployment situation in New York City,'' Lizzette Hill Barcelona, executive director of Strive New York, a work force development agency, said of Mr. Levitan's findings. 'Black men are usually the least skilled. In a tough economy, those are the jobs that you can do away with.' '' As it turns out, the least-skilled jobs are also the first ones that robots and automation will eliminate.
  
  
• Teens often the losers in competition for jobs - Teens are finding it incredibly difficult to find jobs because desperate adults are taking them. "The percentage of 16- to 19-year-olds holding jobs nationally is the lowest it has been since the government began tracking statistics in 1948."

The problem we are facing is simple: if a corporation can create a factory that is completely automatic, it does not need to hire anyone. The economy grows, but jobs do not. If a corporation can build a computer system that answers most of the simple calls in a call center, it can lay off thousands of call center employees. If a corporation can buy trucks that drive themselves, it can fire all of its truck drivers. And so on. There is no correlation between "growth" and "jobs" if there are robots to do a lot of the work.

If, at the same time, the economy is not creating many new jobs for unemployed factory workers, phone operators and truck drivers, then you can get lots of unemployment. Note also that we are seeing just the tip of the iceberg right now -- these trends will accelerate rapidly over the next 5 to 10 years. See Robotic Nation and the other entries in this blog for details.

What are we going to do about this looming and very large unemployment problem?

One possible solution is to recognize that once advanced robots can do nearly all the work, then human beings do not need jobs anymore. We should redesign the economy so that people do not have to work if they do not want to (or cannot find a job). In other words, we design the economy so that people have money to spend whether they work or not. The article Robotic Freedom talks about this solution in detail.

The key idea in Robotic Freedom is the creation of a central account. Money flows into this account from a variety of sources, and everyone in America gets a monthly check representing an equal share of the money in the account (in the same way that the Alaska Permanent Fund has been paying every Alaskan resident hundreds of dollars per year for over the last 20 years).

It is interesting that Bill Gates and Microsoft floated an idea this week that could provide money for the central account. This article describes the Microsoft proposal: Charge Consumers Pennys for Spam E-mail. The basic idea is simple: when people send email, they will pay a fee to do so. Such an approach, it is hoped, will cut down significantly on spammers. The email postage fee could be one stream of money flowing into the central account.

We need to do something. Robots will eliminate at least half of the jobs in America over the next three decades or so. It is unclear that the economy will create replacement jobs for many of the jobs that are lost. The Concentration of Wealth is growing rapidly. The time to be thinking about and implementing solutions is now.