Artificial Intelligence and Jobs

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<p>[Artificial</a> intelligence: Difference Engine: Luddite legacy | The Economist](<a href=“Difference Engine: Luddite legacy”>Difference Engine: Luddite legacy)</p>

<p>"AN APOCRYPHAL tale is told about Henry Ford II showing Walter Reuther, the veteran leader of the United Automobile Workers, around a newly automated car plant. “Walter, how are you going to get those robots to pay your union dues,” gibed the boss of Ford Motor Company. Without skipping a beat, Reuther replied, “Henry, how are you going to get them to buy your cars?”</p>

<p>Whether the exchange was true or not is irrelevant. The point was that any increase in productivity required a corresponding increase in the number of consumers capable of buying the product. The original Henry Ford, committed to raising productivity and lowering prices remorselessly, appreciated this profoundly—and insisted on paying his workers twice the going rate, so they could afford to buy his cars.</p>

<p>For the company, there was an added bonus. By offering an unprecedented $5 a day in 1914, he caused the best tool-makers and machinists in America to flock to Ford. The know-how they brought boosted production efficiency still further and made Ford cars ever more affordable. With its ingenious Model T, Ford became the first car company in the world to bring motoring to the masses.</p>

<p>Economists see this as a classic example of how advancing technology, in the form of automation and innovation, increases productivity. This, in turn, causes prices to fall, demand to rise, more workers to be hired, and the economy to grow. Such thinking has been one of the tenets of economics since the early 1800s, when hosiery and lace-makers in Nottingham—inspired by Ned Ludd, a legendary hero of the English proletariat—smashed the mechanical knitting looms being introduced at the time for fear of losing their jobs.</p>

<p>Some did lose their jobs, of course. But if the Luddite Fallacy (as it has become known in development economics) were true, we would all be out of work by now—as a result of the compounding effects of productivity. While technological progress may cause workers with out-dated skills to become redundant, the past two centuries have shown that the idea that increasing productivity leads axiomatically to widespread unemployment is nonsense. </p>

<p>But here is the question: if the pace of technological progress is accelerating faster than ever, as all the evidence indicates it is, why has unemployment remained so stubbornly high—despite the rebound in business profits to record levels? Two-and-a-half years after the Great Recession officially ended, unemployment has remained above 9% in America. That is only one percentage point better than the country’s joblessness three years ago at the depths of the recession."</p>

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<p>"Economists see this as a classic example of how advancing technology, in the form of automation and innovation, increases productivity. This, in turn, causes prices to fall, demand to rise, more workers to be hired, and the economy to grow. "</p>

<p>Productivity has made it possible to hire less workers. There was an article recently about the view during the depression. It was believed that with increased productivity, workers could work less - the prediction was 20 hrs per week in 2000 with more leisure time. When WWII came, hours worked increased and have never gotten back to the lower hrs worked. So now Americans work longer than almost any country in the world, have less free time, are more unhappy with their jobs and with increased productivity and increased hrs, there is less need to hire workers.</p>

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<p>Where does Apple manufacture their products? What if they manufactured them in the US? How many points would that knock off our unemployment rate?</p>

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<p>Not much…</p>

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<p>You don’t think 400K jobs is a big deal?</p>

<p>How about adding the jobs lost to China from all of the stuff sold at WalMart?</p>

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<p>I thought it was only 50,000…</p>

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<p>They have 50,000 employees. Contract manufacturers actually make the products and they have armies of people making iPods, iPhones, Macs and Apple TVs.</p>

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<p>I wasn’t counting those…</p>

<p>400,000 would be nice…</p>

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<p>"why has unemployment remained so stubbornly high—despite the rebound in business profits to record levels? "
there are multiple factors that I see- many of the unemployed do not have the technological/ computer related skills [think laid off auto workers in the Midwest, for instance] to work in the jobs that are available, and they cant get the training needed to learn those skills- it costs $ to take classes unless you can get on the job training- but first you need to get hired, and most companies in an effort to save costs have cut back or eliminated in house training programs], and / or they cant afford to move to where the jobs are located.
There was also a recent report that the longer one is unemployed, the more likely they will stay unemployed- as the more time passes, the more the skill levels deteriorate, and the harder it is to learn new skills as well.
Its a Catch 22 situation for many.
And it reminds me of what happened to Japans “lost generation”.</p>