I was reading Bob Lord’s post What Paula Pennypacker knew and it reminded me of my own experiences as a midwesterner.
I stood arm-in-arm with family and neighbors to block the bankers from taking possession of their family farms because they could not meet their loan payments during the savings and loan crisis of the 1980’s — a crisis created by banking deregulation. It was a temporary victory.
The bankers eventually came with the sheriff, who apologized for having to enforce a court order. Those family farms no longer exist today. They have been bought up by big agri-business for corporate farming.
Even before then, I recall the abandoned grain silos, outbuildings, feed stores and hardware stores, that dotted the midwest farm belt landscape. These were once small centers of commerce and community when America was still largely agrarian. But people left the land for the cities and towns for better paying factory jobs.
But even in the small city where my family members worked for the breweries, and meat packing plants, and auto plants, those factories were already beginning to disappear in the 1960’s.
America’s industrial era was evolving into the post-industrial era with corporate consolidation, modernization, and globalization. The bigger and more powerful corporations became, the more they moved their factories in pursuit of cheaper labor in emerging foreign markets.
By the 1990’s, the small city that had provided my family members a living was an economically depressed area with crumbling abandoned factory buildings, a population that had left, and unemployment for those who stayed.
This was repeated in small cities and towns all across the midwest and “rust belt.” When the town’s corporate employer(s) closed to pursue cheaper labor in emerging foreign markets, the next impact was on Main Street. The family owned small business shops and grocery stores found themselves in competition with a new economic threat: the big box store, i.e, Wal-Mart.
Wal-Mart promised economically depressed communities new retail jobs, but always at low wages, always. People were desperate for any job, and towns were desperate for the tax revenue. The family owned small business shops and grocery stores could not compete with Wal-Mart’s predatory pricing. These family owned small business shops and grocery stores eventually went out of business as well. If the town could not adapt and find new employers, the Wal-Mart eventually closed as well. These are the hollowed-out towns of the midwest and “rust belt.”
This economic evolution is what The Pretenders sang about in “My City Was Gone” (1984):
I went back to Ohio
But my pretty countryside
Had been paved down the middle
By a government that had no pride
The farms of Ohio
Had been replaced by shopping malls
And Muzak filled the air
From Seneca to Cuyahoga falls
Said, a, o, oh way to go Ohio
This process of economic evolution from agrarian, to industrial, to post-industrial, has now been sped up by computerization, mechanization and robotics in the high-tech era. The next advancement is artificial intelligence (AI).
The problem with the high-tech era and AI is that it is designed to eliminate the human factor in labor. It is not limited to blue collar jobs, e.g., truck drivers replaced by self-driving vehicles, but extends to white collar jobs as well, e.g., bank tellers replaced by online banking, and travel agents replaced by online reservation systems, for example.
Online legal research and writing has even reduced employment for lawyers, and now AI threatens to replace them. AI Lawyer “Ross” Has Been Hired By Its First Official Law Firm.
Those who have a job in computer programming, mechanization, robotics and AI will do well, but they are an elite few, and they are eliminating the human factor from labor for hundreds of thousands of other people not as educated and skilled as they are.
Derek Thompson wrote about this at The Atlantic in 2015. A World Without Work:
The end of work is still just a futuristic concept for most of the United States, but it is something like a moment in history for Youngstown, Ohio, one its residents can cite with precision: September 19, 1977.
[A]s manufacturing shifted abroad after World War II, Youngstown steel suffered, and on that gray September afternoon in 1977, Youngstown Sheet and Tube announced the shuttering of its Campbell Works mill. Within five years, the city lost 50,000 jobs and $1.3 billion in manufacturing wages. The effect was so severe that a term was coined to describe the fallout: regional depression.
I traveled to Ohio to consider what would happen if technology permanently replaced a great deal of human work. I wasn’t seeking a tour of our automated future. I went because Youngstown has become a national metaphor for the decline of labor, a place where the middle class of the 20th century has become a museum exhibit.
“Youngstown’s story is America’s story, because it shows that when jobs go away, the cultural cohesion of a place is destroyed,” says John Russo, a professor of labor studies at Youngstown State University. “The cultural breakdown matters even more than the economic breakdown.”
In the past few years, even as the United States has pulled itself partway out of the jobs hole created by the Great Recession, some economists and technologists have warned that the economy is near a tipping point. When they peer deeply into labor-market data, they see troubling signs, masked for now by a cyclical recovery. And when they look up from their spreadsheets, they see automation high and low—robots in the operating room and behind the fast-food counter. They imagine self-driving cars snaking through the streets and Amazon drones dotting the sky, replacing millions of drivers, warehouse stockers, and retail workers. They observe that the capabilities of machines—already formidable—continue to expand exponentially, while our own remain the same. And they wonder: Is any job truly safe?
* * *
[T]he widespread disappearance of work would usher in a social transformation unlike any we’ve seen. If John Russo is right, then saving work is more important than saving any particular job. Industriousness has served as America’s unofficial religion since its founding. The sanctity and preeminence of work lie at the heart of the country’s politics, economics, and social interactions. What might happen if work goes away?
There are economists who are researching and writing about this troubling future. I occasionally post about it.
But do you know who is not talking about it? The media and politicians.
There was a time that the media employed an economics correspondent to report on economics in the news. Irving R. Levine of NBC News is a good example. These reporters were eliminated in favor of the 10 second spot on “what the stock markets did today.” Now even that is no longer a staple of the evening news coverage.
What the stock market did is not economics news. It does nothing to inform the public about the transformative economic evolution shaping their lives and making them uneasy.
We just had an 18 month campaign for president. There was a lot of talk about trade agreements and bringing jobs back to America, which is bullshit. None of this addresses the economic evolution of work that is occurring and the impact of high-tech computerization, mechanization and robotics, and advancements in AI, all of which are designed to eliminate the human factor in labor. I know of few politicians who can even address this issue in any coherent manner.
The media and politicians are content to talk about the “creative destruction” of capitalism that leads to new and cheaper products, and greater profits for the corporation that makes it. They hype Google’s driverless cars, and Amazon’s delivery drones, and the latest phone app that has the consequence of eliminating gainful employment for thousands of people.
They don’t talk about the destruction of the human spirit when one does not have gainful employment and no opportunity to find it, and lives in a city or town that has been decimated by the “creative destruction” of capitalism moving on to the future.
This is what is occurring in Appalachia where 20th Century “king coal” first replaced jobs with mechanization and robotics, and now is eliminating remaining jobs as coal becomes a relic of the past, replaced by emerging clean energy technologies. Coal is like the whip & buggy companies of the 19th Century that were replaced by the emerging technology of the automobile. Those coal mining jobs are never coming back.
The world’s population is increasing at the same time economic evolution driven by high-tech innovation is decreasing the need for human labor. This is a volatile combination with potentially dire consequences, and no one has an answer what to do.