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Automation by Capitalists Vs. Automation by Workers

September 30, 2014 / Klint Finley

From Kurukshetra:

The difference between “bad outsourcing” (“bad” from the labor/leftist perspective) and this case of outsourcing should be obvious. “Bad outsourcing” is done on the company’s terms–that is, in a situation where the worker has no say in the matter, and where the company boss outsources a job and pockets the difference between cheap foreign labor and American labor. Outsourcing by the workers, on the other hand, is just that: outsourcing done on terms dictated by the worker, where the worker outsources her own job and pockets the difference.

Now, extend this observation to automation. As it stands, there is a whole lot of concern (particularly, it seems, from economists) that the increasing rate of automation, roboticization, and cybernation is creating a secular decline in employment, leaving an increasing number of millions structurally unemployed, and severely limited in their ability to access the theoretical benefits of mass automation. But just as with outsourcing, the underlying reason why workers are losing out is because they hold little to no power in the process of implementing automation. Labor does not control the means of (automated) production; capital does.

Full Story: Kurukshetra: Automation by Capitalists Vs. Automation by Workers

Kurukshetra tables the discussion about whether someone making six figures a year is still part of the working class, which is understanable under the circumstance. But they also bypass the question of whether outsouring your job to someone else makes you into a capitalist, but in the case of automation, this no longer matters.

The problem isn’t technology, it’s exploitative business models

June 17, 2014 / Klint Finley

Former Twitter engineer and Simple co-founder Alex Payne writes in response to yet another rant by venture capitalist Marc Andreesen:

We could go back and forth all day on what exactly defines technological change – I certainly have before. But what labor wants is self-determination, not a slowing of technological change. Taxi drivers protesting Uber aren’t saying that they want apps out of their cabs. They want leverage to negotiate wages and working conditions so they aren’t barely scraping by. The pushback is on exploitative business models, not technology.

“Let markets work”, you say, “so that capital and labor can rapidly reallocate to create new fields and jobs.” Well, we’re three decades into an era of systemic deregulation and financialization. The result? Global recession, lingering structural unemployment, and an accumulation of capital at the top of the economic pyramid. In this climate, capital has indeed “rapidly reallocated” … into hard-to-tax, hard-to-regulate asset classes like fine art. Small business loans are still crunched and austerity reigns while tens of billions in corporate profits sit in off-shore tax shelters.

The “severe macroeconomic down cycle, the credit crisis, deleveraging, and the liquidity trap” that you mention in passing? We “let markets work”, and that’s what we got in return. It’s been a failed experiment for everyone but the 1%. Dismissing “the crisis of inequality” as just a “pessimistic economic theory” has not been, historically, a move that’s gone well for aristocracy.

Full Story: Alex Payne: Dear Marc Andreessen

The Alt-Labor Movement: Low-wage workers fight to make bad jobs better

October 8, 2013 / Klint Finley

Nicole Aschoff on the “Alt-Labor” movement, such as the Walmart and fast food strikes:

University of Colorado-Denver management professor Wayne Cascio has shown, through a comparison of Walmart/Sam’s Club and Costco, that low wages are not necessary for high profits and productivity. Costco employees average roughly $35, 000 per year ($17 per hour), while Sam’s Club workers average roughly $21, 000 per year ($10 per hour) and Walmart workers earn an average of less than $9 an hour. Costco also provides it workers predictable, full-time work and health benefits. However, contrary to popular assumptions, Costco actually scores higher in relative financial and operating performance than Walmart. Its stores are more profitable and more productive, and its customers and employees are happier.

Costco is not exceptional. Zeynep Ton, of MIT’s Sloan School of Management, has studied retail operations for a decade and argues that “the presumed trade-off between investment in employees and low prices can be broken.” “High-road” employers like Trader Joe’s, Wegmans, and the Container Store have all found ways to make high profits and provide decent jobs. Catherine Ruetschlin’s research shows that a modest wage increase—bumping up the average annual salary of Walmart or Target workers to $25,000—would barely make a dent in big retailers’ bottom line, costing them the equivalent of about 1% of total sales. Even if a company like Walmart passed on half the cost of the increase to customers, the average customer would pay roughly $17 more per year, or about 15 cents per shopping visit. And, considering most low-wage workers spend nearly their entire paycheck on necessities, the industry would see a boost in sales ($4 billion to $5 billion more per year) to its own workers. Fast-food companies are highly profitable. McDonald’s alone saw profits more than double between 2007 and 2011. They could easily send some of these profits downstream to franchise owners and workers.

So why do most big retailers and fast-food chains insist on a bad-jobs or “low road” model? There are a few reasons. MIT’s Ton argues that labor costs are a large, controllable expense, and retailers generally view them as a “cost-driver” rather than a “sales-driver.” Store-level managers are pressured by higher-ups to control labor costs as a percentage of weekly or monthly sales. And because store managers have no control over sales (or merchandise mix, store layout, prices, etc.) they respond to pressure from above by cutting employment or forcing workers to work off-the-clock when sales dip. Another factor is financialization—the increasing dominance of finance in the economy. Firms feel a lot of pressure from Wall Street to be a Walmart and not a Costco. As Gerald Davis has argued, the rise of finance and the dominance of “shareholder value” rhetoric have resulted in an emphasis on short-term profits that register in increased share prices and big CEO bonuses.

Full Story: Dollars and Sense: Low-wage workers fight to make bad jobs better.

(via Metafilter)

This is encouraging, but the possibility of fast food companies switching to “less-costly, automated alternatives like touch-screen ordering and payment devices” is not an idle threat. I’ve seen something like this setup in the food court at the JFK airport. But as I wrote earlier, cultural issues could stop this from becoming widespread — it’s not clear that customers will settle for robots and touch screens over human beings. But I sure wouldn’t rule it out.

Report: 47% of U.S. Jobs At Risk of Being Automated Out of Existence

October 8, 2013 / Klint Finley

You’ve probably already seen news stories floating around a couple weeks ago about how 47% of jobs are in danger of being automated. The stories are based on a report that looked at 702 different occupations and ranked them based on how likely they are to be automatable based on advances in machine learning, machine vision and robotics. I took a look through the report and thought I’d share some thoughts.

Caveats Methodology aside, the report only predicts that probability that a job could, eventually, be automated, not that it will be automated. More on that later, but for one thing it means they can’t predict how long it will take for a particular job to be displaced (they suggest it will take a decade or two, and the most automatable jobs will go first), or what percentage of people in a field will be replaced. Also, they don’t talk much about economics of replacement — whether it might be cheaper to pay humans than to buy and maintain robots for some positions. One thing I’m not sure about is whether the 47% is meant to apply to the total number of job types (if so, I’m not sure what the cut-off point is) or if it means 47% of all currently employed people are at risk of being replaced (which I think is what they actually mean).

Automation Winners and Losers According to the report the safest jobs, predictably, are in engineering, health care and creative work. Managers and supervisors are also pretty safe. Journalists are relatively safe, but my old profession — computer support — is in danger. The hardest hit will be the working class. Even skilled workers like plumbers, welders, machinists and truck drivers — the sorts of skilled workers there are reportedly shortages of — are in danger (electricians, however, are relatively safe).

Other Potential Losers It doesn’t address other supply and demand issues. For example, there are more law school graduates now than ever, so although most legal work can’t be automated, it doesn’t make law a “safe” profession. It also doesn’t address the effects of some portion of work becoming automated, thus reducing the number of people needed. To use law as an example again, software tools make the discovery process easier, reducing the number of lawyers and paralegals required to do that task. In journalism, some types of reporting have already been successfully automated. I’ve argued before that most types of writing and reporting will still need to be done by humans, but more sophisticated tools could reduce the total number of journalists required to run a profitable publication. Many types of professionals, including engineers and doctors — could be vulnerable to such disruption as well.

Social and Cultural Factors It also doesn’t address social or political trends that might protect some workers. It’s my understanding — though I could be wrong — that freight trains could operate with far fewer human workers than they do, but the union keeps humans in many roles. Likewise, unions or professional organizations could protect some careers, like taxi drivers and truckers, by pushing for legislation that requires a human operator ride along with self-driving vehicles “just in case.” Some workers, like food servers, bartenders and black jack dealers, may be preserved by cultural norms.

Doom But even if only half the jobs they believe are likely to be automatable are actually automated, that’s still about 23.5% of all types of jobs. That means things will get worse for everyone as A) more people will be competing for the jobs that are left and B) unemployed people will spend less money, reducing the demand for the products and services provided by the non-automated professions. And while the industrial revolution created many new types of jobs to help replace those displaced by machinery, there’s no guarantee that will happen again. Even if it does, it could take years for enough new jobs to emerge to replace the old ones.

Mindful Cyborgs: Robotic Emoting Baristas from Enterprise Precariat

July 30, 2013 / Klint Finley

Mindful Cyborg

This week on Mindful Cyborgs Chris Dancy and I discuss the rise of the “precariat” and what it means for the future of work:

One thing that’s really been on my mind with regards the Marketplace story about the BART transit strike and the tech industries’ response to that. There was a quote from the CEO of UserVoice, Richard White, and he said, “One of the guys in our team said he’d be putting in his two weeks’ notice once he found out what he could make working for BART.” White said jokingly. His solution to address those disgruntled BART workers, get them back to work, pay them whatever they want and then figure out how to automate their jobs so that this doesn’t happen again.

People have been talking about the automation of work and how technology is potentially displacing workers and there’s a good book on this called Race Against the Machine by some MIT academics. But you don’t really see a lot of tech CEOs who are openly calling for blue-collar workers, or any workers, to be replaced by technology. Forrester even did a report a couple years ago suggesting that tech company’s downplay the potential of technologies to replace workers. So, it’s really unusual to see the CEO of a tech company just openly saying, “I want these meddling workers to be replaced by machines. So the inconvenience that it causes me has diminished.”

It was a pretty surprising thing to see somebody really just come right out and say and there’s this subtext to it that really bothers me as well, the bit about, “Oh, you know, one of my workers was going to quit and go work for BART,” just suggesting that they already get paid too much even though as noted in the article they’re not actually making what their family needs to get by in the area. The BART workers aren’t. There is this sort of subtext like anybody who’s not part of the tech industry doesn’t deserve to get paid a living wage. That was really disturbing to me.

You can download the episode on Soundcloud, from iTunes or download the MP3 directly.

More notes, plus the full transcript inside.

Robots, Automation and the Future of Work

March 30, 2011 / Klint Finley

This is a presentation by Marshall Brain, founder of How Stuff Works. He’s written more extensively on the subject in an essay called Robotic Nation, which I haven’t read yet.

I think Brain might be overestimating the ability of machine-vision and natural language processing to supplant human intelligence, but the general trend towards fewer and fewer jobs is real one that I’ve written about a lot lately.

(via Justin Pickard)

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