Yes, Jobs Are Being Automated -- But A Robot Tax Won't Help

  • by , Featured Contributor, September 13, 2019
New York City mayor Bill de Blasio isn’t going to let a little thing like not qualifying for the third Democratic debate stop him from telling you what he’s going to do when he’s President.

In an op-ed in Wired last week, he outlined his plan to cope with increasing levels of automation:

-- First, a new federal agency to oversee automation and safeguard jobs and communities.

-- Second, not allowing corporations to deduct investments in job-destroying automation from their taxes.

-- And third, a “robot tax” on large companies that eliminate jobs through increased automation.

Having spent the past five years helping companies and organizations come to grips with the nature of exponentially accelerating technologies, I can tell you that de Blasio is not wrong to be concerned about technological unemployment.

Last week, IBM released the results of its latest survey, suggesting that 120 million people globally will need to be retrained due to machines and artificial intelligence within the next three years.

But de Blasio also falls victim to one of the most common mistakes people make when they think about the future: He imagines that it will look exactly like the present, only automated.

We’ll still have the same big companies, he envisions. Except they will have fired all the people and bought a whole heap of robots.

Except it doesn’t happen that way.

Sears didn’t disrupt its own supply chain, catapulting itself into the future at the expense of its employees. Amazon disrupted Sears -- and the rest of retail.

How does a robot tax help hotel employees displaced by Airbnb?

As Azeem Azhar, who writes the excellent Exponential View, points out, “to focus only on those workers who lose their jobs through automation is too narrow… Job losses in the retail sector, for example, are not coming as a direct result of automation by retailers… This shift is more than automation. Fundamentally, the economy is changing.”

Back in 2016, David Wong wrote an article examining some of the reasons for Trump’s rise. Instead of a red state versus blue state election, Wong argued, it was an urban versus rural election. We might have bounced back from the GFC at a national level, but all of the recovery went to the cities -- leaving rural America disconnected and disaffected.

“See,” says Wong, “rural jobs used to be based around one big local business -- a factory, a coal mine, etc. When it dies, the town dies. Where I grew up, it was an oil refinery closing that did us in. I was raised in the hollowed-out shell of what the town had once been… If you don't live in one of these small towns, you can't understand the hopelessness. The vast majority of possible careers involve moving to the city, and around every city is now a hundred-foot wall called ‘Cost of Living.’”

The oil refinery didn’t replace the jobs with robots. Maybe if they had they could have stayed open. And this is another thing de Blasio gets wrong: by focusing only on forcing companies that currently employ lots of people, he makes it more expensive for them to automate, making it more likely, not less, that they will be put out of business by an automation-first startup.

Forget about the robot tax. Close tax loopholes on corporations generally. Make it easier for gig economy workers to get employee protections (California has just done this with a law forcing Uber and Lyft to treat drivers as employees). Institute a minimum basic income or at least a guaranteed minimum income (a reverse tax if your income drops below a certain amount).

The robots are coming for our jobs. Let’s make sure our defense is a good one.

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