As the US presidential election results rolled in on November 9, it became apparent that America — and the world — would never be the same again. The American people overlooked all faults of Republican nominee Donald Trump and elected him to the Oval Office in the belief that he will fix the nation’s deep-rooted problems of inequity and injustice. And in doing so, they rebelled against the business interests and corruption they believed Hillary Clinton represented.
Trump’s victory was enabled by technology — everything from his use of social media to Clinton’s email scandals to Russian hacking. But advancements in technology and how they reshape our economy may also prevent him from delivering some of the major promises that made him so popular during the campaign months.
The truth is that over recent decades the rich have been getting richer. Power has shifted to Wall Street and business. Globalisation has admittedly cost millions of jobs in the United States. Some white Americans are also terrified at the changing complexion — and values — of the country. Trump cleverly stoked these fears and promised his supporters what he knew they wanted: greater material prosperity by bringing back jobs shipped overseas.
But those jobs, many in the manufacturing sector, are increasingly being done by technology. Machines are taking over the jobs of manufacturing workers; artificial intelligence-based tools are mastering the jobs of call centre and knowledge workers; and cars are beginning to drive themselves. Over the next decade, cheap technology — not cheap workers overseas — will decimate jobs in many professions. Inequality will rise and more people will become disadvantaged.
Some robots already operate at lower cost than the humans they replace, and they are getting cheaper and better. The Boston Consulting Group predicts that by 2025 the operating cost of a robotic welder will be less than $2 per hour. That’s far more affordable than the $25 per hour that a human welder earns in the US today, and even cheaper than the pay of skilled workers in lowest-income countries. Trump may succeed in keeping immigrants out, but how will he stop the march of robots?
Simultaneously, it’s well known that Uber and several other companies are working on developing cars and trucks that won’t need human beings in the driver’s seat. According to the American Trucking Association, approximately 3 million truck drivers were employed in the United States in 2010, and 6.8 million were working in other jobs relating to trucking activity, including trucks manufacture, servicing and other types of jobs. So, roughly one of every 15 workers in the country is employed in the trucking business. According to the US Bureau of Labour Statistics, another 300,000 people work as taxi drivers and chauffeurs. Therefore, we are talking about millions of jobs that could disappear in the early 2020s.
And then there’s the ‘Gig Economy’ towards which some businesses are shifting. It requires part-time, on-demand employment. Uber has already done this for taxi drivers, and other technology companies are transforming a wide range of jobs into part-time exployment. A study of the software company Intuit predicts that by 2020, 40 percent of American workers will be independent contractors, temps or self-employed, and that full-time jobs will become increasingly harder to find. This adds up to about 60 million people in part-time work. The problem is that not only will these part-time workers not have reliable full-time jobs and sick days’ pay, they also won’t be entitled to health insurance and long-term benefits. Even if Obamacare continues, they won’t be able to afford the premia.
The remedy being proposed by president-elect Trump and his supporters is imposition of trade barriers. But closing the doors to foreign trade won’t bring back these jobs. They will merely slow the global economy and hurt American exports, thereby shrinking the US economy and accelerating job losses.
The silver lining to this dark cloud is that technology advances will also provide solutions to major problems of humanity such as energy, food, education and healthcare deficits. The production costs of clean energies, such as solar and wind, will keep falling until they become almost free. With artificial intelligence-based applications, we will have digital doctors advising us, and advances in medicine will enable us to live longer, healthier lives. Robots will do our chores while digital tutors will teach us new skills. Advanced technologies will provide for everyone’s needs. But all this requires better understanding of the cause and effects of inequity, and careful application of technologies that are going to change the equation.
Right now, we need to initiate a nationwide conversation on how we can distribute the prosperity that leapfrogging technology advances is about to create. We must infuse equity and fairness in our legal, justice and economic systems. And, on the premise that technology will disrupt entire industries and wipe out millions of jobs, we must begin to devise solutions to ease the transition and pain for people most affected and least prepared.
(Vivek Wadhwa is a fellow at the Rock Center for Corporate Governance at Stanford University, USA)