The title of this posting reflects my interest in getting language “right.”
Living Wage and Livable Income are not synonymous. The latter includes the former and ensures we are considering those who do not earn wages and rely on pensions and/or government income security programs. A livable economy is one that benefits society as a whole, not just those at the top of the income scale.
One of the biggest threats to a livable economy and the chance for people to have a livable income is technology and in particular Artificial Intelligence.
Artificial Intelligence (AI) is reducing the need for human intelligence and interaction. Systems and processes are fast becoming less reliant on human presence and more dependent on technologies that eliminate human error and/or just make things cheaper to do.
There are those who suggest that the disruptions caused by technologies are dramatically improving:
- health for people; witness how much longer people are living (in the Western world in particular);
- learning and education;
- how we network and communicate;
- convenience as in “Siri, how do you spell, perpendicular?” while offering us more choice (e.g. Skip the Dishes or Uber instead of just taxis);
- the quality of products and services by eliminating human error; and
- the bottom line by reducing labour costs and increasing profits.
We could debate the points above, but let’s assume all of the above is markedly accurate. Perhaps these are primarily positive impact of AI and other technologies, but the question for me has to do with the yin and yang of technological advances and their disruptive nature.
Technology proponents will point to the job creation that techno-firms provide and suggest that those jobs will replace the jobs lost because of technology. Some will admit there will be a structural skills gap in the workforce for a generation or so, but that everything will even out in the long run.
Maybe this evening out will happen over time, but it is hard to imagine that technology firms will be leading the way to structural reform that benefits workers who are being replaced.
Overall, it appears that technology is about the overall reduction of human workers in the market place. Currently much of this displacement is focused on low-skilled jobs, but don’t fool yourself. How long will it take robots to take these jobs:
- Insurance underwriters and claims adjusters
- Bank tellers and representatives
- Financial and marketing analysts
- Inventory managers
- Taxi drivers and truck drivers
- Manufacturing workers
- and more
If you believe technology will benefit you economically, you might be right, but overall the evidence to date indicates things don’t look so rosy down the road. Consider the following US data, based on a report about the impact of digital technologies on productivity and job growth — in the MIT Technology Review.
The chart is a bit difficult to read but basically until 2000, the gap between productivity and employment in the United States has been fairly consistent and representative of a connection between jobs and productivity. Since 2000, productivity has increased while jobs have pretty much remained at 2000 levels. That might be great news for big business, but far less so for workers.
Not only has the job trend not kept up with productivity, we can see a longer trend of significant GDP growth in the United States while household income has remained relatively flat since 1990. This chart indicates more economic achievement for the economy that is not benefitting workers at a corresponding rate, which frankly is one key factor in the significant income inequality that exists in the United States. Continue reading Livable Income IN a Livable Economy (Part Two: the Impacts of AI)