Lots Of Lost Jobs

Oxford University's futures institute reckons 47 percent of the jobs in the US economy are on their way out over the next 20 years as we replace human effort with machines. Old-style photography leader Kodak, which has essentially collapsed, once employed 140,000 people. Instagram, our digital photography leader, had 13 employees when Facebook purchased it two years ago. Meanwhile, we create value in fresh ways that barely involve labor at all. To take the most stunning example, WhatsApp has been valued at $19 billion. It provides jobs for 55 people, reports Nigel Cameron. (1)

In our present world, the market for attorneys is becoming glutted. In the United States, the ratio of graduates to job openings is currently running about two to one, and this despite the recovering economy. In the United Kingdom, the market is even tighter: in 2011 the number of applicants for 'trainee' openings at London law firms exceeded actual openings sixty-five to one. (2) There is not much reason to expect the picture to improve substantially. Not only are law firms on a massive cost-cutting kick, many American and British firms offshore their 'low-value' work, such as claims processing to Sri Lanka and the Philippines, but even the most tradition bound firms are confronting a trend that, until recently, few attorneys thought much about; automation. With 'semantically sensitive' search algorithms, labor-intensive tasks such as reading the thousands of documents in a complex case no longer means weeks of work by small armies of well-paid attorneys, but can be done in days or even hours by machines, says Paul Roberts. (2) One example: When five television studios became entangled in a Justice Department antitrust lawsuit against CBS, the cost was immense. As part of the obscure task of 'discovery', providing documents relevant to a lawsuit, the studios examined six million documents at a cost of more than $2.2 million, much of it to pay for a platoon of lawyers and paralegals who worked for months at high hourly rates. But that was in 1978. Now, thanks to advances in artificial intelligence, 'e-discovery' software can analyze documents in a fraction of the time for a fraction of the cost. In January, for example, Blackstone Discovery of Palo Alto, California, helped analyze 1.5 million documents for less than $100,000. (3)

Out of work lawyers may not seem like a national tragedy

Out of work lawyers may not seem like a national tragedy. But even avowed lawyer haters shouldn't need a predictive algorithm to see how the innovations upending the legal profession will someday do the same thing to lots of other jobs as companies large and small reach automatically for whatever cost-cutting capabilities roll off the treadmill—and those capabilities become more and more impressive. (2)

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Already, computers can drive cars and pilot jumbo jets from takeoff to landing. They can analyze X-rays, grade college essays, write sports brief, and sift through news stories and tweets for market-moving data, then exploit it with perfectly timed stock trades. The can run 'lights out' factories—that is, factories that don't need lights because no humans work in them. And these are only previews for the automation blockbusters said to be just around the corner, as the exponential rise in computing power, sensor technologies, and Big Data pushes the economy, and the job market, into entirely new territory. (2) Paul Roberts adds, “The new mix of jobs in our economic recovery is nowhere near as inviting as it was even a decade ago. Across the post-industrial world, most of the jobs that have come back are either high-end positions requiring a lot of specialized knowledge or, more often, low-skill, low-wage service jobs. Notably absent are middle-skill, middle-wage jobs that were once the backbone of the middle-class society. That's one reason why, in the United States, median household income is 7 percent less today than it was fifteen years ago, and why the term middle class rarely appears in print these days without modifiers declining or hollowed-out.” (2) In previous recessions there were layoffs but they were always followed by surges in job growth during the recoveries. That isn't the pattern now. Many of the eliminated jobs never came back, especially in the manufacturing sector, traditionally the biggest source of stable, mid-wage middle -class jobs. The United States suffered a net loss of 12 factories and 2,400 manufacturing jobs per day during the first 10 years of the 21st century. This is a net loss of 44,000 factories. (4) David H. Autor, an economics professor at the Massachusetts Institute of Technology, says the United States economy is being 'hollowed out.' New jobs, he says are coming at the bottom end of the economic pyramid, jobs in the middle are being lost to automation and outsourcing, and now job growth at the top is slowing because of automation. (3) So where do we go from here? Nigel Cameron suggests, “What's needed is an enormous effort to raise the skills level of the nation so that having robots relieve us of routine work becomes a blessing for all. We need to transcend the educational and social disadvantages of so many Americans so they can have rewarding jobs in the digital age.” (1) Nicely put, but a major challenge. References

1. Nigel Cameron, “Where will people work when robots take on the jobs?”, San Francisco Chronicle, December 2, 2014
2. Paul Roberts, The Impulse Society, (New York, NY,, Bloomsbury, 2014)
3. John Markoff, “Armies of expensive lawyers replaced by cheaper software,” The New York Times, March 4, 2011
4. Arthur B. Robinson, “44,000 factories,” Access to Energy, 38, 1, March 2011