Tag Archives: Artificial Intelligence

The economic disruption of the technology tsunami has political repercussions

In an occasional series I do on the economic disruption caused by the technology tsunami, see The technology tsunami is replacing ‘good paying jobs’ that are not coming back, and (Update) Public policy is failing to address the economic disruption from rapidly advancing technology for example, I look at the effects of automation, computerization, robotics and artificial intelligence on jobs and the economy.

But technology also has repercussions on our politics, as technological innovations have had in the past throughout history. Axios.com, which does a good job of reporting on the technology tsunami, reports on new research today. Robots may have given Trump an edge in 2016:

For two years, historians, economists and others have pondered whether western leaders, facing a growing populist challenge, must prepare for an even greater temblor resembling the French Revolution or 1930s fascism.

The big picture: In a new paper in the Oxford Review of Economist Policy, U.K. economist Carl Frey and two co-authors argue that the 2016 U.S. presidential election — and the effects of industrial automation during the decades before — may be a signal of worse to come.

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‘Automation anxiety’ in the information age

Over the weekend, Mike Allen at Axios.com had a Special report: How the robot revolution is changing our lives:

We’re entering a new, robot-fueled tech boom that is already disrupting the world’s balance of power, and is changing how we fight wars, stay alive, drive, work, shop and do chores.

The future is now: We keep talking about what’s coming, but we’re already on the leading edge of a profound global change that will create tremendous opportunity for new power and wealth.

In this new age of automation, businesses are frantically installing machines and algorithms that eventually will make them far more efficient — and wipe out jobs and sectors at blinding speed.

  • This has touched off a tech race between the U.S. and China. And the other major economies — the U.K., France and South Korea in particular — are also spending big to own a piece of this future.

The upsides:

  • Manual, back-breaking jobs will go away (this is good only if replaced by better gigs). Far less time will be spent doing menial tasks like driving or cleaning. And your ability to get more of what you want, when you want it, will be greatly enhanced.
  • Health care will be more precise and sophisticated: Medical robots could make surgery more precise, and micro-bots will target the delivery of drugs within the body. Empathetic ones could help care for us as we age. Soft, flexible ones could aid in search and rescue operations.
  • Robots and other autonomous devices will power apps on your phone that advocate for you with doctors; and could cut through government bureaucracy.
  • The next big wow to your house will be smart appliances, especially in your kitchen: Your refrigerator will know its contents and order refills, and will communicate with your oven and dishwasher — to make us even lazier and less essential than we already are.
  • Manuela Veloso of Carnegie Mellon University told Axios that ultimately humans will be in control of how robots operate and the role they play: “These robots did not come from Mars and fall on Earth. They were invented by us and they will continue to be invented by us.”

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Economic disruption and a federal ‘jobs guarantee’

Axios.com regularly publishes reports on how artificial intelligence, robotics, automation and computerization in the information age is eliminating jobs in the way that the industrial age caused economic disruption of the world’s economic order from its agrarian past.

Steve LeVine recently reported this fascinating piece, The coming jobs apocalypse:

Congress and the Trump administration have yet to create a coherent policy response to a widely forecast social and economic tsunami resulting from automation, including the potential for decades of flat wages and joblessness. But cities and regions are starting to act on their own.

What’s happening: In Indianapolis, about 338,000 people are at high risk of automation taking their jobs, according to a new report. In Phoenix, the number is 650,000. In both cases, that’s 35% of the workforce. In northeastern Ohio, about 40,000 workers are at high risk.

In all three places, local officials are attempting to take charge by identifying jobs most at risk, skills most likely to be in great future demand, and how to organize education and industry around a new economy.

  • Their gingerly first steps are a snapshot of how economies throughout the advanced countries will have to respond to an already-underway economic disruption that will be of unknown duration and magnitude.
  • “This is a national trend that is going to play out locally. This is something the country and really the world is facing right now,” said Rachel Korberg of the Rockefeller Foundation, which funded the reports covering Phoenix and Indianapolis.

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August jobs report shows weakness

Steve Benen has the monthly jobs report for August. Job numbers fall short of expectations in August:

The Bureau of Labor Statistics reported this morning that the U.S. economy added 156,000 jobs in August, which is down from June and July totals, and fell short of expectations. The unemployment rate, while still low, inched up a little to 4.4%.

AugustJobs

In fact, overall, this is not a heartening set of data. The revisions for June and July were both lower, and combined they show a net loss of about 41,000 jobs. (In case you’re curious, the BLS report explained at the outset, “Hurricane Harvey had no discernible effect on the employment and unemployment data for August.”)

All told, if current averages keep up, we’re on track to see the U.S. economy add about 2.1 million jobs this calendar year, which isn’t bad, but which would fall short of last year’s totals. In the first eight months of last year, 1.55 million jobs were created, while in the first eight months of this year, the total is 1.4 million.

Here’s another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.

AugustPrivate

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April jobs report: employment rebounds from weak March

Last week the Bureau of Economic Analysis released data that real gross domestic product (GDP) increased at an annual rate of only 0.7 percent in the first quarter of 2017.  CNBC reported, US first-quarter growth weakest in three years, as consumer spending falters:

The U.S. economy grew at its weakest pace in three years in the first quarter as consumer spending barely increased and businesses invested less on inventories, in a potential setback to President Donald Trump’s promise to boost growth.

Gross domestic product increased at a 0.7 percent annual rate also as the government cut back on defense spending, the Commerce Department said on Friday. That was the weakest performance since the first quarter of 2014.

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The pedestrian first-quarter growth pace is, however, not a true picture of the economy’s health. The labor market is near full employment and consumer confidence is near multi-year highs, suggesting that the mostly weather-induced sharp slowdown in consumer spending is probably temporary.

“First quarter GDP tends to underperform because of difficulties with the calculation of data that the government has acknowledged and is working to rectify.”

Steve Benen has the April jobs report today. Job market improved as winter turned to spring:

After a sluggish month for the U.S. job market in March, many were eager to see whether the slide would continue, or whether we’d seen an improvement as winter turned to spring.

As is turns out, it now looks like the latter is true. The Bureau of Labor Statistics reported this morning that the U.S. economy added 211,000 jobs in April, more than double March’s total. The unemployment rate inched lower to 4.4%, the lowest since the summer of 2007, before the start of the Great Recession.

AprilJobs

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(Update) Public policy is failing to address the economic disruption from rapidly advancing technology

Another in a series of posts about the technology tsunami rapidly transforming the labor force.

The Washington Post this week has a couple of interesting reports on jobs affected by the Technology Revolution, and the economic disruption it is having on society.

First, Jef Guo writes at the Wonkblog, We’re so unprepared for the robot apocalypse:

Economists have long argued that automation, not trade, is responsible for the bulk of the six million jobs shed by the manufacturing sector over the last 25 years. Now, they have a put a precise figure on some of the losses.

Industrial robots alone have eliminated up to 670,000 American jobs between 1990 and 2007, according to new research from MIT’s Daron Acemoglu and Boston University’s Pascual Restrepo.

The number is stunning on the face of it, and many have interpreted the study as an indictment of technological change — a sign that “robots are winning the race for American jobs” (Clair Cain Miller, The Upshot at The New York Times). But the bigger takeaway is that the nation has been ill-equipped to deal with the upheaval caused by automation.

The researchers estimate that half of the job losses resulted from robots directly replacing workers. The rest of the jobs disappeared from elsewhere in the local community. It seems that after a factory sheds workers, that economic pain reverberates, triggering further unemployment at, say, the grocery store or the neighborhood car dealership.

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