What to do when robots make everything we need?

Robert Reich writes that robots are taking over manufacturing:

I recently toured a U.S. factory containing two employees and 400 computerized robots. The two live people sat in front of computer screens and instructed the robots. In a few years this factory won’t have a single employee on site, except for an occasional visiting technician who repairs and upgrades the robots.

Factory jobs are vanishing all over the world. Even China is losing them. The Chinese are doing more manufacturing than ever, but they’re also becoming far more efficient at it. They’ve shuttered most of the old state-run factories. Their new factories are chock full of automated and computerized machines. As a result, they don’t need as many manufacturing workers as before.

Economists at Alliance Capital Management took a look at employment trends in twenty large economies and found that between 1995 and 2002—before the asset bubble and subsequent bust—twenty-two million manufacturing jobs disappeared. The United States wasn’t even the biggest loser. We lost about 11% of our manufacturing jobs in that period, but the Japanese lost 16% of theirs. Even developing nations lost factory jobs: Brazil suffered a 20% decline, and China had a 15% drop.

What happened to manufacturing? In two words, higher productivity. As productivity rises, employment falls because fewer people are needed.

It’s not just manufacturing. Roombas are cleaning floors. And every time I shop at our local Stop & Shop, another check-out lane has been converted to complete automation.

Reich isn’t panicking. He says we’ll have plenty of jobs if we restructure education to ensure that all Americans can do creative, non-routine work:

Any job that’s even slightly routine is disappearing from the U.S. But this doesn’t mean we are left with fewer jobs. It means only that we have fewer routine jobs, including traditional manufacturing.

But is it realistic to think that after robots can make everything we need and run our check-out aisles, fast food restaurants, etc. that there will still be enough jobs to employ 300 million Americans — many of whom received second-rate educations — not to mention a billion people in China, etc.?

Many years ago, after being amazed by robotic progress, I realized that the mass of humans is being rendered superfluous from an economic viewpoint. As robots do more and more, people’s labor is being dramatically de-valued.

What should society do with all these “surplus” (economically) human beings? My thought back then was to structure the tax system to reward those who are able and willing to work in creative jobs while guaranteeing those unable (or even unwilling) to work in creative, high-tech jobs — the only jobs in the future — to live decent lives.

My solution: a guaranteed minimum income tax system. Everyone, including people who earn nothing, would receive a basic income from the government. People with jobs would keep their basic income plus a fraction of whatever they earned. The tax rate could be flat or progressive. The key is that no one would have to work to live a basic life. No one would starve or go without a roof over their head because their skills are incompatible with the high-creativity jobs of the future. And some of society’s rapidly increasing wealth (thanks to robots) would be shared with the tens (or hundreds) of millions of Americans unable to get jobs in the increasingly intellectually demanding workplace.

Why would anyone choose to work if they could live without working? Well, living an expensive lifestyle would require being a creative worker. And creative work is intrinsically enjoyable and rewarding. Many millionaires continue working at Microsoft and throughout Silicon Valley because they love their jobs.

Posted by James on Sunday, May 31, 2009