The Case for a Federal Jobs Guarantee

From the New York Times “Opinion” Section by Eric Loomis:

Employment numbers may look solid now, but economists, physicists and industrial engineers all say that automation will, in the not-so-distant future, drive higher unemployment. The Columbus Dispatch recently calculated that in Ohio, out of total state employment of about 5.5 million workers, 2.5 million jobs are at risk of automation.

How do we prepare for such disruption and the future of work? We might revisit an idea from the 1970s: a federal guarantee of employment. In recent weeks, three Democratic senators (and likely presidential contenders) — Kirsten Gillibrand of New York, Cory Booker of New Jersey and Bernie Sanders of Vermont — have either expressed their approval of the idea or unveiled initial ideas about how an updated version could work.

They are building on the legacy of the Humphrey-Hawkins Act, introduced in the 1970s by Senator Hubert Humphrey, Democrat of Minnesota, and Representative Augustus Hawkins, Democrat of California. In addition to the guarantee of employment, their initial bill allowed citizens to sue the government if they could not find a job.

Resurrecting Humphrey-Hawkins can help pre-empt a technology crisis and even future labor dislocation from globalization. In the original Humphrey-Hawkins bill — not the watered-down version that ultimately passed in 1978 — the president would submit an annual plan to Congress to achieve full employment, and local committees would coordinate job needs in their communities. The bill would have spurred private-sector job creation and a New Deal-style federal job creation program. Private employment would limit government investment, while federally mandated wage and price controls would fight inflation.

The final bill fell far short of this. Unions stripped out the wage and price controls in exchange for their support and put a priority on negotiating better contracts for their members over the fate of the nation’s poor. The Carter administration fretted about the potential impact on inflation from a bill without those controls. President Jimmy Carter never truly supported it, and the bill that passed committed the nation to ending inflation more than to full employment. Since then, the idea of full employment has largely disappeared from the American political system.

The arguments against Humphrey-Hawkins in 1978 are largely irrelevant today. After decades of low inflation, wage and price controls are unlikely to be problems. Mr. Booker’s pilot plan to test these ideas in 15 areas of the country builds on the Great Society belief in community control over federal resources.

Read the complete article here.

Robots Are Coming, and Sweden Is Fine

From New York Times:

From inside the control room carved into the rock more than half a mile underground, Mika Persson can see the robots on the march, supposedly coming for his job here at the New Boliden mine.

He’s fine with it.

Sweden’s famously generous social welfare system makes this a place not prone to fretting about automation — or much else, for that matter.

Mr. Persson, 35, sits in front of four computer screens, one displaying the loader he steers as it lifts freshly blasted rock containing silver, zinc and lead. If he were down in the mine shaft operating the loader manually, he would be inhaling dust and exhaust fumes. Instead, he reclines in an office chair while using a joystick to control the machine.

He is cognizant that robots are evolving by the day. Boliden is testing self-driving vehicles to replace truck drivers. But Mr. Persson assumes people will always be needed to keep the machines running. He has faith in the Swedish economic model and its protections against the torment of joblessness.

“I’m not really worried,” he says. “There are so many jobs in this mine that even if this job disappears, they will have another one. The company will take care of us.”

In much of the world, people whose livelihoods depend on paychecks are increasingly anxious about a potential wave of unemployment threatened by automation. As the frightening tale goes, globalization forced people in wealthier lands like North America and Europe to compete directly with cheaper laborers in Asia and Latin America, sowing joblessness. Now, the robots are coming to finish off the humans.

Read the complete article here.

Automation Could Displace 800 Million Workers Worldwide By 2030, Study Says

From today’s National Public Radio:

A coming wave of job automation could force between 400 million and 800 million people worldwide out of a job in the next 13 years, according to a new study.

A report released this week from the research arm of the consulting firm McKinsey & Company forecasts scenarios in which 3 percent to 14 percent of workers around the world — in 75 million to 375 million jobs — will have to acquire new skills and switch occupations by 2030.

“There are few precedents” to the challenge of retraining hundreds of millions of workers in the middle of their careers, the report’s authors say.

The impact will vary between countries, depending on their wealth and types of jobs that currently exist in each. In 60 percent of jobs worldwide, “at least one-third of the constituent activities could be automated,” McKinsey says, which would mean a big change in what people do day-to-day.

McKinsey looked at 46 countries and more than 800 different jobs in its research.

In the year 2030 in countries with “advanced economies,” a greater proportion of workers will need to learn new skills than in developing economies, researchers say. As many as a third of workers in the U.S. and Germany could need to learn new skills. For Japan, the number is almost 50 percent of the workforce, while in China it’s 12 percent.

Jobs that involve predictable, repetitive tasks are more easily automated, “such as operating machinery and preparing fast food,” and data processing, like paralegal work and accounting. However, McKinsey estimates less than 5 percent of jobs can be fully automated.

Jobs that pay “relatively lower wages” and aren’t as predictable are less likely to face full automation, because businesses don’t have as much incentive to spend on the technology. This applies to jobs like gardening, plumbing and child care, according to the authors.

Occupations that pay more but involve managing people and social interactions face less risk of automation due to the inherent difficulty in programming machines to do those types of tasks.

Read the complete article here.