The U.K. votes to leave the European Union. Heavy fighting continues in parts of Fallujah as Iraqi forces seek to retake all of the city from ISIS. And in Venezuela, food shortages spur looting and rioting. A panel of journalists joins guest host Susan Page for analysis of the week's top international news stories.
Guest Host: Laura Knoy
The jobs robots will be able to do in the not so distant future are endless, according to some experts. From painting to directing traffic to fighting fires, many economist and Silicon Valley insiders agree that society is on the verge of significant job displacement. One recent study reported that 47 percent of jobs in the U.S. are vulnerable to automation. In many ways, this story is nothing new — technology has always threatened work. What is different, observers say, is the pace and extent of change. It’s a future, they argue, we need to prepare for now. Guest host Laura Knoy looks at how we think about robots, jobs and work.
- Dean Baker co-director, Center for Economic and Policy Research and blogger, Beat the Press; author of "The End of Loser Liberalism: Making Markets Progressive"
- Derek Thompson senior editor, The Atlantic
- Jerry Kaplan author, "Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence"; fellow, The Center for Legal Informatics at Stanford University
MS. LAURA KNOYThanks for joining us. I'm Laura Knoy of New Hampshire Public Radio sitting in for Diane Rehm. Diane will be back next week. Tax preparer, telemarketer, taxi driver, these are all jobs that some experts say could be automated by technology in the next few decades. To discuss how artificial intelligence and robots will impact our jobs and how we think about work, I'm joined in studio by Dean Baker, co-director of the Center For Economic and Policy Research, and Dean, good to see you. Thank you for being here.
MR. DEAN BAKERThanks for inviting me in.
KNOYAnd also with us, Jerry Kaplan, author of "Humans Need Not Apply: A Guide To Wealth And Work In The Age Of Artificial Intelligence." And Jerry Kaplan, good to meet you. Thank you for being here.
MR. JERRY KAPLANThank you, Laura.
KNOYAnd joining us from the studios of NPR in New York City, Derek Thompson, senior editor at The Atlantic. His recent cover story is called "The End of Work," and Derek, thank you, too, for your time.
MR. DEREK THOMPSONIt's great to be here. Thank you.
KNOYWell, and Derek, I actually wanted to start with you. In your article, you say, you know, people have worried forever, at least 300 years, probably longer, about being displaced by technology. Just give us a sense of that longstanding worry.
THOMPSONSure. I'll give you the long history in 30 seconds. I mean, since the luddites, you know, smashed their textile machines and probably since earlier, people have worried that new technologies, new technologies for their time, were replacing people and would forever replace people. And it should be said at the very onset of this discussion, that these predictions have consistently proved wrong. So in the piece, I call it "the boys who cried robot." And in the story, "The Boy Who Cried Wolf," the wolf does come at the end and there is a sense, I think, that our story could follow a similar trajectory.
THOMPSONBut, you know, since the industrial revolution, we have had new technology that has pushed us off the farms, turned us from an agrarian economy to a manufacturing economy, then globalization and factory automation became into the U.S. certainly in the 1930s, 1940s. You had, I think, one of my favorite stories from this sort of long history is a letter from a mayor to Herbert Hoover saying, I'm afraid that machines are a Frankenstein monster that are going to essentially destroy the United States.
THOMPSONThis was the mayor of Palo Alto, ironically, in the 1930s predicting that technology would change the future of the U.S. economy for the worst. And it should be said that, you know, today, with unemployment in the low 5 percents, these predictions have not seemed to come true. Technology has more changed the contour of the workforce, changed how people work rather than push people out of the workforce altogether.
KNOYAlthough, we do hear -- so different types of jobs now versus what we might have had a decade or a hundred years ago, but you did write, I think, Derek, that, you know, the jobs that we do see created today aren't as, quote-unquote, "good" as they used to be, especially for men.
THOMPSONWell, certainly, I think, that, you know, in making this prediction now, why should we make the prediction now at a time with, you know, the economy creating 200,000 jobs a year and unemployment relatively low? There are sort to three big bucket reasons why, I think, that now is still a good time to talk about this prediction. First is sort of, there's general weakness in the workforce that is confusing to a lot of economists and one of the reasons brought up for sort of one of its causes has been technology.
THOMPSONSo we have low participation in the workforce, the share of men who are working or looking for work has fallen significantly since 1970s, 1980s and it's puzzling to a lot of people why prime age workers between 25 and 54 are less likely to be working than they used to be. It might be cyclical. It might be sort of purely recession-based answers and demand-based answers. But some of economist have said, no, I think that technology might be playing role.
THOMPSONBut the third part, the part that I think is probably most important for our purposes today, is that you look at the most common jobs in the U.S., retail sales person, cashier, food and beverage worker, driver, these kind of jobs. We already have technology that can do some or all of the work or you have a lot of people predicting, with a high degree of certainty, that people like Google and Uber are going to create self-driving cars within the next two decades and move in on what is now, in terms of driving, the most common job occupation among American men.
THOMPSONAnd so I do think that it is worth sort of using our bifocals here and saying, you know, in the short term, in 2015, 2016, are robots the greatest threat to the U.S. economy? Of course not. There are so many other stories that are more important. But with the long-range focus, 10 years, 20 years, will technology, perhaps, be -- have an even greater effect on the kind of jobs people do and the amount of work people can find, yes, I do think there is a case for that.
KNOYSo are robots the biggest threat to the U.S. economy or, Derek, are they an opportunity for us?
THOMPSONWell, the sort of the subject of the piece, "A World Without Work," was essentially that one could see both things coming true. On the one hand, lots of jobs are terrible today. Lots of jobs offer nothing in terms of positive psychology, in terms of independence, autonomy, a sense of meaning and purpose in your life, a sense of control and ability to express your passions. A lot of the most common jobs today offer none of those and so it is nice to think about technology emancipating us from jobs that are necessary but terrible and allowing us to do jobs that are currently unnecessary, but would be a lot of fun.
THOMPSONAnd so -- but this would necessitate all sorts of government intervention in order to tax the capital owners to make sure that everybody had a certain amount of money, a kind of universal basic income. This is certainly a hope to hold out for. On the other hand, I think there's a lot of people who think that if people -- if workers are displace by technology, the future is going to be miserable for them. Work is enormously important as a kind of sort of minimum activity, it's enormously important for people's sense of purpose in the world.
THOMPSONAnd the fear is that you look at the government that we have and you project is this the sort of governing body that we can expect in 10, 15 years to pass something like universal basic income when it can't even take away corn and sugar subsidies. That seems like a fairly high task. And so I can see, you know, both sides of this. I can see this future being not a utopia, but utopian and I can see it a polar opposite.
KNOYWell, and I want to remind everybody, we'll be taking your questions, comments throughout the hour. Call us on 800-433-8850, 800-433-8850. Send us your email, email@example.com. Join us on Facebook or Twitter. And I want to turn to you, too, I think, Dean Baker. This idea that robots are a threat to the U.S. economy or they offer us this utopia where we have leisure and we can create art and music and reconnect with our families. What do you think about that big picture and that big sort of push-pull there?
BAKERWell, you know, Derek was going on about the history, how we've been here before and I guess I would agree very much with that part, that we've been here before. I remember when I was in college, "Player Piano," the Kurt Vonnegut book, we're all going to lose our jobs because we'll be replaced. You know, this has been over and over and over again. Robots are part of a story of increasing productivity, which is, in general, a good thing.
BAKERThere are always some losers there, but we're talking about productivity growth and, in fact, the reality is productivity growth's actually been quite weak recently. If we go back to the golden age of '47 to '73, we had very rapid productivity growth, about 3 percent a year. It was broadly shared. In other words, it was passed on in wages, up and down the income ladder. We had very low unemployment. The unemployment rate through the '60s was around 4 percent as an average.
BAKERSo we could tell that story where you have rising productivity and you have broadly shared gains. So I'm really not very worried about people losing jobs and, you know, none of us will have anything to do. You know, another part of this story, we used to shorten work weeks and work years and, in fact, in Europe, they have done that. So if you compare the United States to Germany, we work about 25 percent more hours in an average year so we're worried that we have too many people, not enough jobs.
BAKERWell, if we had German work years, 33 percent more jobs. Just snap your fingers and there we are. So I see this, you know, if we have broadly shared gains and that's really a political issue -- and just to point out, you know, a little issue with Derek here, it's perhaps things we want the government to do, but sometimes there's things we don't want the government to do. So, for example, the Federal Reserve Board's going to meet next month.-
BAKERThey might decide to raise interest rates. The purpose of raising interest rates is to keep people from getting jobs. They're worried too many people have jobs. If we want people to have jobs, we want them to be in a position to bargain for higher wages and/or shorter hours, then we want full employment. And the Federal Reserve Board, this is a very big issue. What's the Federal Reserve Board policy?
KNOYWell, and a slightly different question for you, Jerry Kaplan, you know. We're going to talk a lot this hour about robots replacing us, changing the nature of work. And when we talk about robots, people think of, you know, somebody scooting around a silver metal man, so to speak. But what do we mean by robots replacing us now at work?
KNOYWhat sorts of robots?
KAPLANWell, there's a whole new wave of automation that's about to wash over our economy and it's basically the combination of a couple of different technologies. My field is artificial intelligence and that's going to be driving a lot of these kinds of changes. It's not magic. It's not as mysterious as you see it on TV or in the movies and all that. This is pretty straightforward. The kinds of industrial robots that you have in factories are now going to come off the factory floor and be able to operate in environments around -- in social spaces around other people.
KAPLANBasically, we're giving you the ability to see and to interact with their environments. So jobs that involve manual labor that people are engaged in today, a vast majority of those are going to subject to automation. So I think this is all, in the long run, a good thing. The future is very bright. The question is, it's for whom and the answer is for those who can afford it. So the real issue here is that automation is going to be driving income inequality.
KNOYSo robots sounds like fun, but you're talking about all kinds of automation, Jerry. You're talking about when I did the self-scan at CVS yesterday instead of having a cashier help me out, all kinds of stuff like that. Self scans, ATMS, what are some other examples of just artificial intelligence that we don't even think about nowadays?
KAPLANAh, that we don't think about. Well, that's a -- you're kind of putting me on the spot there a little bit. The things that I think about, but there are lots and lots of manual tasks, brick-laying. Driving is one of the obvious ones. Cashier, retail workers of every kind, people who use their hands for a living, those are the kinds of people who are engaged in tasks that will make a difference.
KNOYComing up, more on robots and future of work and leisure on "The Diane Rehm Show." Stay with us.
KNOYWelcome back. I'm Laura Knoy sitting in for Diane Rehm. We're talking about automation, robots and the future of work and leisure. You can join us with your questions and comments. Call us at 800-433-8850. Send us your email at firstname.lastname@example.org. Join us on Facebook or Twitter. Again, the number, 800-433-8850. Our guests for the hour, Derek Thompson, senior editor at The Atlantic. His cover story for the July-August edition is called "A World Without Work." He joins us from New York. Jerry Kaplan is in studio, author of "Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence."
KNOYAlong with Dean Baker, co-director at the Center for Economic and Policy Research. Dean is a blogger for Beat the Press and author of "The End of Loser Liberalism: Making Markets Progressive." And all of you, before we go to our listeners, I did want to pick up on something that I think Jerry said just before the break. And, Dean, it's about income inequality. How might increased automation, artificial intelligence affect this income inequality discussion that we're having in this country? It's a big issue, no matter what political stripes people wear.
BAKERYeah, well, I think there's a lot of -- there's a tendency to blame income inequality on automation, on technology. And I think that's basically wrong. I think the whole thing is how we manage it. So, before, I was talking about the Federal Reserve Board. Well, there'd be a lot more demand for ordinary workers -- retail clerks, manufacturing workers -- if the Federal Reserve Board doesn't raise interest rates and deliberately slow the economy and keep it from creating jobs. The other side, when you look at higher-paid workers, -- doctors, lawyers, dentists -- a lot of that work should be affected by automation, because you can make a lot of this very routinized.
BAKERYou could have scanning techniques. You could have diagnostic techniques that someone -- maybe a trained person, but someone much less trained than, say, a very skilled physician -- could do that work, displace a lot of the most highly-paid workers in the country. Also the fact that someone gets lots of money from the technology -- that's not the technology, that's from our patent law. So, you know, I remember back in the '70s, Texas Instruments came out with a hand calculator. When those first calculators came out, they were hundreds of dollars, you know, in today's terms, thousands of dollars, you know? And then in, you know, a year, two years, three years, they were giving them away with breakfast cereal. So the fact that there's huge inequality created by the technology is because of our laws around them, not because of the technology itself.
KNOYSo don't blame the gadget itself, blame the policies and the political environment around that gadget. Is that what you're saying?
BAKERExactly. That's what I'm saying. Yeah.
KNOYYeah? Jerry, go ahead. Jump in.
KAPLANWell, I totally agree with that. Income inequality, wealth inequality in the U.S. is a national disgrace and we have to do something about this. The new technologies that are coming down the pike are going to make this problem way worse, unless, as Dean says, we begin to modify our policies in order to be able to spread the assets more broadly.
KNOYWay worse? So give us a little more there. How come?
KAPLANWell, the reason is pretty simple. We talk about this as, the robots are coming to take our jobs. But that is a mischaracterization of the problem. The real problem is, it's a struggle of assets substituting for labor. So people who have assets, gain the benefits. Let's suppose I -- I've employed many people. I've run a number of companies. I'm a Silicon Valley guy. Suppose I have a bunch of workers in my shop and I decided to invest in some automation and that makes them more productive. Well, we say the workers are more productive, they ought to be paid more. But that's not really the case. It's a market. That's why they call it a labor market.
KAPLANSo whatever the -- you have to pay to get those workers, that's what you pay them. And if I'm the guy who invests my money in automating those jobs, I'm expecting to get that return. So as we increase the rate of automation, what happens is the rich -- the people with the money -- are the ones who gain the benefits. And I think the types of policy issues that Dean is talking about are exactly right. We have an economic system that is stacked in favor of the rich. And believe me, I know what I'm talking about. So what we need to do is to find ways to distribute the assets much more broadly across society, as we're moving from a labor-based society to an asset-based society.
KNOYSo how do you do that? Because I don't think, from having looked at your book, you're a fan of government redistribution.
KAPLANI am -- I'm not. See, you're thinking statically when you talk about -- well, you have to take away from the rich and give to the poor. That's missing the dynamic character of this whole problem. The U.S. economy doubles every 40 years and has done so reliably for at least the last two centuries. So think about that. Forty years from now, there's going to be 100 percent more wealth than there is today. So we're looking at the problem wrong when we think about it statically. What we should be talking about is how do we set the rules so that the new wealth is much more broadly distributed across society?
KAPLANNow, in my book, "Humans Need Not Apply," I talk about some creative policies, economic policies of the kind that Dean tends to favor, that are not redistributionist. They're about changing the rules so that the rules no longer favor the rich, but allow more people to participate. So, for example, I talk about a progressive corporate tax, where we have -- the idea is that the more people that benefit from a corporation -- that is to say, how widely distributed the equity in that corporation is -- would pay a lower rate of tax. And what that's going to do is to cause companies that benefit a lot of people to have advantages in the marketplace over companies that benefit a few people.
KAPLANNow, if we put policies like that in place -- and I'm just picking one thing out of the hat. There are a lot of other possible examples and this isn't necessarily the golden solution. But if we put policies like that in place, we're going to enable an economy that allows people to participate.
KNOYSo it's tax based, not the government cutting checks for everybody.
KAPLANI -- that's -- we're just setting the playing field to begin to level it up a little bit from where it is today. Because our economic policies are not aligned with the social goals of society. And we need to fix that problem and we need to do it pretty soon.
KNOYSo I do want to go to our listeners. But to you, Derek Thompson, I also want your thoughts on this whole issue of income inequality, a bit problem, and how technology either helps or hurts.
THOMPSONWell, I think -- I both want to -- I wish I could have a debate. But I basically agree with everything that's been said. You know, I guess the only thing that I would say to Dean is that to the extent that income inequality is a political problem but not a technological problem, even though technological changes, we all know, often redistribute -- or often, you know, create winners and losers. You know, it's a little bit like saying, you know, is -- are waves a gravity-moon problem or a water problem? Well, it's very much both. If you just, you know, you can always say, well I think it's just one, I think it's just the other.
THOMPSONI think that, you know, if you didn't have technological change, you wouldn't have the political problems in terms of making sure that we correct for winners and losers that we have today. So I do think that both things are very much in play. To the second point, I think we're talking about, you know, two things that are really important. One is sort of expanding the supply of work. And the other is the question of redistributing income. I think that we can do both. We can expand the supply of work by removing licensing laws, by -- as Dean said -- urging the Federal Reserve to not lift interest rates too prematurely.
THOMPSONBut at the same time, I do think that the answer to this problem is almost certainly going to involve a bit of redistributing income -- raising taxes and redistributing it in the form of either services, like Obamacare, especially since, you know, if people are going to be less attached to a formal labor force, we want to make sure that they have health care no matter what -- and then also redistributing through other means as well, like the earned income tax credit and other refundable tax credits.
KNOYLet's go to our listeners, gentlemen. And first up is Andrew in Sterling, Va. Hi, Andrew. You're on "The Diane Rehm Show." Welcome.
ANDREWHello. My question is for the near future, before we're looking at things like universal basic income and other potentially far-off things -- I hope not too far off for our society. But we currently have some, you know, larger corporations. You have Wal-Mart, you have your pizza chains and stuff even -- lots of things that can be automated in these big companies. And as automation solutions fall in place, I feel like we're going to start seeing these companies make the tough decision of, do I keep human workers or do I go to automation.
ANDREWAnd so my specific question is, how will these companies probably make this decision in the context of the politics: of like if you replace too many human jobs, you look bad because you've cost Americans jobs -- but as a capitalist company, you are saving yourselves money?
KNOYWell, Andrew, it's a great question. And it's perfect for you, Jerry Kaplan. Go ahead.
KAPLANWell, where I come from in the Silicon Valley, putting people out of work is considered the name of the game. It's disrupting industries. Let me just take Uber as an interesting example. Right now, they're hiring like crazy. I think they're planning on having half a million drivers. But they're making a much bigger investment in automated driving. So five or ten years from now, we're going to begin to see them get rid of those people as well. Automation is about the replacement of labor with capital. So, overall, it's a good thing. The question is, there's a transitional period during which the current workers lose their jobs and either need to be retrained or have a very hard time.
KAPLANThe future is very bright but there's going to be a very rough ride to get there, based upon the acceleration in automation that I'm seeing take place out there in the field.
KNOYWell, and that rough ride is what we do see in some of the more depressed areas of the country...
KNOY...the Rust Belt where, you know, factories used to reign supreme. And those folks had a hard time getting retrained. They can't become software engineers.
KAPLANYou're absolutely right. Dean is an economist. He works by studying numbers and statistics. And he's bound by a professional code that I am free of. So let me just say that in my book, "Humans Need Not Apply," I try to really bring this to life. Instead of spouting the same kinds of statistics that you typically see, I talk about the actual lifestyles of rich people. Because I know a lot of very wealthy people. How do they really live? And they don't want people to know about the privileges that they enjoy. And then I contrast them, in my book. I even talk about my own lifestyle, somewhat impolitically, about the way my wife and I and our children live. And I contrast that with the story of my administrative assistant, a young man who had -- who's the son of Filipino immigrants and the struggles that he's had and the broken promise of American that this young man has experienced.
KAPLANBecause he worked for eight years to go get himself an undergraduate degree at San Francisco State University, which turned out to be worthless.
KAPLANAnd saddled him with enormous debts that he's stuck on the hook to pay. So we have this terrible disconnect between the types of training that we're providing to people and the results that it has in terms of their employability.
KNOYSo how does artificial intelligence, robots, whatever you want to call them -- real quickly, because Dean wants to jump in -- how does that help him, Jerry?
KAPLANWell, it doesn't help him at all. It helps the people who own the robots. If you own a robot, the future is very bright. If you plan to go out there and make a living by your own labor, not so much.
BAKERA couple things. You know, again, I agree completely on the problem of inequality. And of course, it has been horrible over the last three and a half decades. But the point I would make about that, is that's not for the most part been automation. We've had very low productivity growth for most of that period. We had a good period in '95 to 2005. But since 2005, it's been very slow and prior to '95 it's been very slow. So we do have a very serious issue of inequality. Exactly right. You know, I and many of my colleagues have written on that. But that's not automation. That's not the main cause there.
BAKERThe other point I'd make -- and just, again, to hit on this -- people owning the robots get lots of money because they have patents. So if they didn't -- if we had shorter, weaker patent protection -- you know, again, I gave my example of Texas Instruments and the hand calculator, price plummeted -- so if you don't have strong patent protection, those robots are very cheap, very quickly and no one's making huge amounts of money -- Uber or anyone else -- on it.
KNOYAnd is that a good thing?
BAKERTo my view, yes. I mean, the point, you know, why do we want to have the government give someone a monopoly so they can get very rich and make the rest of us poor?
KAPLANThe patent -- I agree with you on this point. People don't really understand how the patents work but they're protections policies.
BAKERThat's what that is.
KAPLANIt's preserving the privileges of the rich. And we need to break down some of those barriers. Otherwise, we're going to have the hoards at the door, breaking down the door instead of breaking down…
KNOYBecause the income inequality will get so great. Although the person who -- not to belabor this point -- but the person who gets the patent is the person who came up with the great idea.
BAKERWell, not always.
BAKERYou know, again, this is a very complicated issue. Because, two points here: One is that any innovative process has many steps in it. So whoever gets the patent gets, you know, runs the office, makes a lot of money. The second one is, you know, the world is full of cases where, you know, someone sold their patent, got nickels and dimes -- in fact Bill Gates got very rich from a patent he bought from someone -- what'd the guy get for it? He, you know, not very much.
THOMPSONNot very much, no.
KAPLANI'm -- I have 11 patents and I agree completely with Dean. It's a shame and it shouldn't work that way.
KNOYI'm Laura Knoy and you're listening to "The Diane Rehm Show." Again, you can join us at 800-433-8850. Send your email to email@example.com. And, gentlemen, let's go to Boston, Mass. Wade is on the air. Hi, Wade. Go ahead.
WADEHi. How are you guys doing? It's such an interesting discussion. I want to make a comment about another aspect of technology kind of taking over. I'm a musician and I'm a conductor, you know, in the theater. And if you notice that -- and it's been quite an issue in the theater with orchestras -- a lot of, you look at the old orchestras in Broadway pits, which hire sometimes 24, 25 acoustic musicians -- nowadays, we've got synthesizers that can simulate the sounds of acoustic instruments that have taken away many, many jobs of acoustic instrumentalists throughout the country.
WADEAnd I mean, they -- we even have the technology where an entire orchestration can be programmed into a synthesizer and all you got to do is have a conductor -- someone sitting at a keyboard in front of a live performance just tapping one key and it would sound like an entire orchestra accompanying the show. And, in fact, a number of touring companies have gotten in trouble with the musicians unions in cities across the country because of this issue and taking jobs from local musicians.
KNOYWow, Wade, that's really interesting. Yeah. So that's, I think, the example of a job that has changed due to automation. And it sounds like, from Wade's call, not for the better, Derek. What do you think?
THOMPSONWell, it's funny. The irony of talking about orchestras is there's a famous example in economic history from an economist named Baumol who said that one of the issue of the U.S. economy is that even as some industries get more and more productive, you can't increase the productivity of a string quartet. It's always going to be four people. And this caller's actually suggested an ironic way in which the string quartet has, itself, been at least partially automated with synthesizer technology. The one thing that I would say is that -- on the one hand, you know, art is expensive and people are going to find ways to try to make it cheaper I suppose.
THOMPSONBut I think there will always be things -- even in the most audacious predictions for automation -- there will always be things for people to do. And art, I think, will be at the heart of that. There have been studies actually that look at robots playing music -- robots playing drums, playing guitars and things like this. And in these studies, they compare it to people playing guitars and drums. And it turns out that human listeners can tell the difference and they prefer the human music -- they prefer the sort of perfect imperfections of people playing music in a way that's just off the beat, that it sounds authentic and warm blooded.
THOMPSONSo, of course, people are going to try various ways to, you know, make certain industries, even those in the fine arts, more productive. But I do think that, overall, this is actually an industry that is as insulated as any sector can possibly be from technological change.
KNOYIs it though, Derek. I mean we -- there are other industries where we thought we would be insulated. I've heard about, for example, reporters -- you and me -- being replaced by automated systems that can sort of churn out, you know, basic reports.
THOMPSONRight. Well, predicting the future is always going to be very difficult. And it's going to be more difficult, the more specific that you get. So, you know, will -- is the reporter-radio host job under immediate threat? I don't think so entirely. But with that said, there are technologies now that are writing up box scores in baseball games, that are writing up financial earnings reports for financial websites. These are essentially areas that are a little bit pattern matching. You figure out which part of the financial -- of the quarterly earnings report has, you know, lists the earnings and the income and the total number of employees and you just plug that into a system and you write up the quarterly report.
THOMPSONBut I do think that, you know, there's lots of other areas where it's going to be difficult to predict the future accurately. We didn't think cars could be automated at all in 2004. And it was the very next year that self-driving cars became -- won a DARPA competition. So this is a difficult thing to predict with any specifics.
KNOYAll right. Well, coming up, more on automation and the future of work. Your questions and comments are welcome. We'll be right back.
KNOYWelcome back. I'm Laura Knoy, sitting in for Diane Rehm. We're talking about automation and the future of work this hour and taking your questions and comments, 800-433-8850 is the number. Send your email to firstname.lastname@example.org. Our guests for the hour, Derek Thompson, senior editor at The Atlantic. His cover story for the July/August edition is called "A World Without Work." He joins us from NPR. Joining us in-studio, Jerry Kaplan, author of "Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence." And Dean Baker, co-director at the Center for Economic and Policy Research.
KNOYAnd Dean, before we go back to our listeners, I did want to have you pick up on what Derek talked about, jobs that we long thought were just untouchable by automation, it turns out maybe not.
BAKERYeah, Derek referred to William Baumol's, this is famous, dates back at least from the '80s, maybe in the '70s, it was called Baumol's Disease, the idea that, you know, we're seeing rapid gains in productivity in industry, in manufacturing, but Baumol said, well, we really can't do that with services. So he had this idea that, you know, we're going to see services become ever more expensive. And he had mentioned, you know, the case of the orchestra that your caller had talked about.
BAKERAnother area, teaching, well, guess what? We have online teaching. So when you look at this, there probably are not many areas where you can't talk about automation having a major impact. And what Derek was saying, what it ends up, we'll see restructuring because people will want to still hear live musicians. Maybe some people will want to hear the, you know, mechanized orchestra, but some people, many people, will still pay to hear live musicians. So I expect we'll see a transformation. We will see just about everywhere attacked by technology, where we'll see technology brought on, reduced numbers of jobs, but in many cases it will also create jobs.
BAKEROne of the things I just should mention, you know, if we go back 15, 20 years ago, probably no one thought there would be an industry in anti-virus software, you know, and digital protection. So as we get these new technologies, there will be new jobs created, new jobs associated with them.
KNOYWell, it is interesting, you know, talking about music, and I'm so glad that he called because I've got two kids, teenage boys, and they like the older music because it sounds authentic. It doesn't sound auto-tuned and so forth. So there's a hungering for some of that. I know you want to jump in, Jerry, and then I have a bunch more questions for all of you.
KAPLANWell, I wanted to say something about this area of automating music. This is not a new thing at all. As I told the story in my book, "Humans Need Not Apply," of John Philip Sousa, who wrote a diatribe just around 1900, right after the introduction of the first recording devices, called "The Menace of Mechanical Music." It's a wonderful read. It's short. I recommend it to you highly. I'm talking about his essay, not my book, which is longer and not that interesting.
THOMPSONBut you also recommend highly.
KAPLANI don't recommend that you read it. It's too filled with blinding insights, and it's going to keep you up at night, and I don't want to be responsible for that. So don't read my book, but you can buy my book. But Sousa made this argument back then, and, I mean, I'm right in the middle of this. I was one of the designers of the first digital synthesizer, the Synergy. I am, myself, a jazz player, a musician. I play weekly in a restaurant in Half Moon Bay, California. And so I really understand this. And this is a great example. What happens, really, is these professions get hollowed out. The easy stuff gets automated out, and that's true in journalism, it's going to be true in medicine, it's going to be true in other areas. Well, you say, we can't replace the doctor. Well, yeah, but most of what they do is routine, and most of what they do you can replace. And what that does is reduce the overall employment.
KNOYHere's an email from Barbara, and I think this is for you, Dean. She says, please explain why raising interest rates would mean fewer jobs. Keeping interest rates low doesn't seem to have created enough new jobs. This was your reference earlier in the program to the Federal Reserve. If you could just clear that up.
BAKERYeah, thank you, and thanks for the question. The Federal Reserve Board, you know, we had an extraordinary downturn with the collapse of the housing bubble. And the Federal Reserve Board has controlled monetary policy. That's not the best way to boost an economy. If we wanted to really create lots of jobs, fiscal stimulus, we had some of that in 2009, 2010, that ended fairly quickly, and then we were left with monetary policy. So there's a limit to how effective monetary policy can be.
BAKERI mean, there were some extraordinary things the Fed might have been able to try, but, you know, basically we had a zero interest rate. You can't really go below that. So the Federal Reserve Board did we'll say at least most of what they could in terms of boosting the economy. On the other hand, if you want to slow the economy, they know how to do that. You raise interest rates. That makes mortgage interest rates higher, it makes car loans higher, it makes it more expensive for people to buy on their credit card for firms to borrow to invest. That will slow the economy.
KNOYAll right, well, I did want to clear that up. So thank you, Barbara, for the email. And here's an email from Gaylon in Fort Wayne. I think I'll throw this to you, Derek Thompson. To the gentleman saying automation will not cost us jobs, Gaylon says, I worked for over 30 years for one of the largest manufacturing companies in the world. I saw many jobs lost over the years by automation. This was prior to moving the jobs offshore. Gaylon, thank you for the email.
KNOYDerek, the reason I wanted to throw that to you is, in your article, you wrote about Youngstown, Ohio, and boy, that was a town that, you know, used to be thriving and then saw the loss of manufacturing and kind of was in the dumps for a while.
THOMPSONAnd it's still struggling. You know, Youngstown is an amazing city in that in the middle of the 20th century, it had perhaps the first, certainly top five, median incomes for young people. They had the highest rate of home ownership of any city in America. And essentially, as the steel industry sort of went overseas at the beginning of the second half of the 20th century, it began to struggle, and in the late 1970s, a lot of their steel industry, a lot of their steel mills essentially shut down.
THOMPSONPart of this was technological change. A lot of it was globalization, the globalization of the steel industry. And since then, this, you know, formerly one-company town has really struggled to reinvent itself, has struggled to not only replace the total number of fulltime jobs, a struggle which has seen a lot of people leave the city. It still is a city in which more people are leaving than coming. But also it's a place where, you know, people have sort of redefined, all right, what does it mean to be a working adult.
THOMPSONAnd one of the interesting things that I saw is that even though you do have really terrible poverty there, extremely low wages, it's still very difficult to find a steady job, people have begun to sort of redefine their sense of purpose by saying all right, if I can't find one job to last me 30 years, I can piece together a handful of gigs in the service sector, whether it's being a waiter or a cashier, being sort of a spot-service person, a spot mechanic, combining that with playing in a band and being an artist and making T-shirts and doing a bit of urban agriculture.
THOMPSONAnd so it sort of winks at this distributed, gig-defined future that people are, you know, sort of talking about a lot today. It's difficult to see right now in the official numbers that this is yet an enormous part of today's economy, but people are still thinking that it could be a larger part of the future economy. And so in so many ways, I thought Youngstown served as an interesting metaphor for a future that might be coming.
KNOYYeah, and you wrote that people there are living more like the 19th century, where people, you know, farmed or canned or pieced together work or, you know, found tasks in the community, rather than this more modern notion of black or white, I'm employed, or I'm not.
THOMPSONRight, exactly, and I do think that, you know, if you look at sort of the, you know, Generation Y right now, people between 18 and 35, there is a sense that more of them put more of a weight on work-life balance. They don't want to work as long hours. They value their vacation. They value their free time. They're a little bit more European, honestly, to Dean's point. It's -- even as productivity has grown throughout the Western world in the last, you know, 50, 60 years since World War II, European countries have essentially used productivity to essentially buy more leisure time than Americans seem comfortable doing.
THOMPSONWe are the working bees of the industrialized world in many ways. And this is, again to repeat points made earlier, not a piece of inevitability. This is a cultural choice. It is a choice that probably stems from some political decisions. And so technology has -- does not exist in a vacuum. It is acted on, and it's confluence with lots of other factors in culture, how much we think people should be working - in politics, how much we tax and whether we say that welfare is tied to work or not. And so all of these questions sort of mix together.
KNOYYeah, a choice some will embrace this more piecemeal approach to work, and a choice others would find extremely uncomfortable. Dean, go ahead.
BAKERI want to say something, you know, again, agreeing along with Derek just said, one important piece of the story, and one way in which we have differed or had differed from Europe, was that all those countries had national health care insurance. And that was a really big thing here, that your insurance was tied to your job. So if you weren't 65, you weren't getting Medicare, you got insurance through your job, which generally meant a fulltime job. Also from the employer's standpoint, often an employer would rather pay people overtime, even double time, rather than hire a second worker.
BAKERHuge change here, the Affordable Care Act, I'm going to be a, you know, a cheerleader for it. I mean, plenty of problems, but this is a really big deal, in my view. And we actually see this in the data. There's a very big increase in voluntary, let me emphasize that word, voluntary part-time employment, people choosing to work part time. They tell, you know, they tell us that. That's how -- people ask me how do I know it's voluntary. Because they say that. I'm willing to believe them. They want to work part time, and as a result of that, we see that particularly among young parents, and also people who are just pre-Medicare age, so people 60 to 64.
BAKERTo my view, that's a great thing, and if you can't get a fulltime job, you know, again, that might not be that big a deal if you can still get healthcare insurance.
KNOYLet's take a call from Lee in Panama City, Florida. Hi, Lee, you're on the Diane Rehm Show. Go ahead.
LEEYes, thank you. I try to think optimistic, and I was thinking if everyone, especially the poor and middle class, had the opportunity to purchase a robot and the opportunity to put that robot to work, then while the robot's working, we can enjoy the better things in live. All we've got to worry about is paying taxes when it's due.
KNOYWell, and that's the question, Lee, right? I mean, it's great to have the robot do your work, but you need some source of income. So where should that come from?
LEEThe robot will do it.
KNOYOh, I see, okay, send the robot out to the office. Well, Lee, thank you for calling, and I want to follow up on Lee's call with an email from Logan in Greenville, North Carolina, a similar thought. Logan says, I would love to have a personally owned robot that does my job as well or better than me. I would send it to my workplace. It would earn my paycheck for me, then come home and report. I would spend my days pursuing non-commercial pursuits and leave the day-to-day grind to my personal bot. Paradise realized. So there's our caller and our emailer, Jerry, saying, you know, bring it on.
KAPLANWell, the thing to realize, that this notion of a robot doing your work is a metaphor. It's a metaphor for you having assets that you can invest. And I think it's very important to understand that we need to move to a society where more people are involved in distributing and making assets be productive.
KAPLANBut if I could comment on what you were talking about with Derek very, very briefly...
KAPLANLet me coin a new term. We're talking here about the gig economy. It used to be called moonlighting, meaning that you had a daytime job. This is moonlighting without a daytime job. Maybe we should call it daylighting because in daylighting, you just piece together a life out of a series of different activities that you enjoy or you're involved in that -- each of which gives you either some personal pleasure or some kind of economic result. I think that very well could be the future, and Dean's got a very good point. Basic health care is an important pillar in being able to build a society around that concept.
KNOYIs it enough to live on, though?
KAPLANWell, here's what I would say.
KNOYAnd sometimes one of those jobs falls through, and you're stuck.
KAPLANWe need to stop teaching people to be laborers and start teaching them to be investors and entrepreneurs, and I would argue that this gig economy is turning us all into mini-entrepreneurs, and that's a very good way to think about what labor's going to be in the future.
KNOYAgain, the number 800-433-8850. Email email@example.com. Derek, did I hear you want to jump in there?
THOMPSONOh, I'm happy to jump in. You know, to this -- to the point that -- well first of all, let me just say that Dean's point is essential, that during the debate of Obamacare, it was really interesting because one of the unexpected supporters of this, of the law, were libertarian entrepreneur researchers who said, you know, if you - if you decouple health care from employers, you will essentially give wannabe entrepreneurs the freedom to sort of strike out on their own. You will de-risk entrepreneurship. This gets the second point, though, which is that entrepreneurship is inherently unbelievably risky.
THOMPSONAnd so even though I think it's absolutely wonderful that, you know, when I am, you know, being picked up by an Uber driver or a Lift driver or something like this, I feel like they're constantly telling me about their sort of -- their side gig, the company that they want to start. And to the extent that Uber is sort of inspiring people who otherwise were going to be livery drivers to be sort of daylighting/moonlighting entrepreneurs, I think that's a fabulous thing.
THOMPSONBut I don't think that we should sugarcoat the difficulty of successful entrepreneurship. It's extremely difficult.
KNOYSure, and some people don't want to do it. They're just not comfortable living that way.
THOMPSONYeah, and then right, then there's a final category, which is that, you know, you -- in this world, in which you have successful sort of daylighting entrepreneurs and less successful daylighting entrepreneurs, you're also going to have people who don't want to be entrepreneurs at all, who want to be fulltime workers, who enjoy the structure provided by an employer and a company.
THOMPSONAnd so, you know, there are a lot of different people looking for different things in the labor force, and they all, you know, in a future that allows more for gig working, it's going to help some of them while making others a lot more anxious.
KNOYI'm Laura Knoy, and you're listening to the Diane Rehm Show. Again, you can join us at 800-433-8850. Email firstname.lastname@example.org. Find us on Facebook or Twitter. Let's go to Paul in Columbia, Maryland. Hi, Paul, you're on "The Diane Rehm Show." Go ahead.
PAULOh hi, thank you for taking my call.
PAULI appreciate the wide-ranging conversation we have going here between technology and public policy and the societal distribution of assets. But I'd like to add one other dimension to it. As we move towards a more mechanized, automated economy, what are the security implications here. You know, cybersecurity is all throughout the news. What are the security implications of this world that we're talking about here?
KNOYSecurity implications meaning what if everything crashes, what if somebody, you know, hacks our -- the bot that's helping us do or work, or yeah, go ahead, Paul.
PAULWhat if, you know, a nation-state wants to invade another nation and decides to turn off 10 percent of the cars in America through a cyberattack?
KNOYYou know, this is a really good point, and we have heard, Jerry Kaplan, so many, so many breaches of security recently. It is a little unnerving to think that we're going to have more and more and more automation, but as our caller is saying, it could be making us more and more and more vulnerable. What do you think?
KAPLANWell, I think as we begin to leverage ourselves through these technologies, we have single points of failure, we have systemic risk. There's a lot of these things. Personally, I think all these are manageable. There are going to be a couple of I call it AI Chernobyls, where things aren't going to work correctly, but I don't really see it as a long-term problem because it is solvable, and there are a lot of people working in these areas.
KNOYIn these areas to keep the...
KAPLANWell, to keep things safe and make sure that they're unhackable. It's not an unsolvable problem. That's all I'm trying to say.
KNOYWell, thank you for the call, Paul. And here's an email from Mike, who says, jobs are more than a means of producing a living. They also provide meaning. When a person's job is displaced, they may be forced to take a job that is less satisfying. That's something, also, Derek Thompson, that you write about. You know, when people are unemployed, they sometimes don't feel very good about themselves.
THOMPSONNo, they feel miserable. Long-term unemployment is one of the most intractable miseries there is, partly because, you know, one way that people deal with a lot of traumas in their life is with routine and with structure, and when you're unemployed for many, many months, not only are you not earning income and feeling shame because of that, you also are losing the very routine and structure that tends to heal other traumas or helps heal other traumas. So unemployment is a great human tragedy, and, you know, both of the guests have, I think, already talked eloquently about the importance of maximizing employment when we can.
THOMPSONYou know, one of the main focuses of the piece, really, is looking at our -- you know, what sort of work seems to make people happiest. And again, it seems to be work that provides a measure of independence, number one. Number two, it seems to be work that wherein someone can develop mastery and feel themselves develop mastery, feel themselves developing getting better at the job. And then finally it's this third thing, purpose. You want to sort of align yourself with a cause or ideal that feels important to you, working for a Democratic political campaign if you're Democrat, Republican if you're a Republican. And so it's the jobs that combine all three that seem to make people the happiest.
KNOYAll right, well, and Derek, I'll end it there. I want to thank everybody for being with us. I'm Laura Knoy, sitting in for Diane Rehm. Thanks for listening.
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