'Connecting the Bots': Forecast is murky for future of work
Laurence Kotlikoff was on the hunt for a new suit at a Boston-area Men's Wearhouse when the clerk presented him with an interesting choice – particularly to a Boston University professor of economics who studies trends in the American workforce.
Why not have a suit made custom, rather than pay almost the same price for one off the rack?
To keep costs competitive, the normally labor-intensive process of creating patterns for specially tailored suits is largely automated at the company's New Bedford, Mass., factory. The strategy helped the company's custom suiting business earn $100 million in 2017, double the amount since the option was introduced in Men's Wearhouse stores in 2016.
"This is an illustration of what's happening around the country and the world," Kotlikoff said.
Automation and artificial intelligence have already impacted the American economy. But as the pace of technological change picks up, economists and futurists say the jury's still out on whether the future of employment holds promise or peril for American workers.
But on at least one thing there seems to be some consensus: The rapid workforce evolution has already begun.
"I don't think any economist can say for sure where things are going," Kotlikoff said. "But we're seeing things in front of our eyes that are very scary."
'Chaos and conflict'
Predicting the future is a discipline rife with uncertainty. But doing it accurately is a coveted skill for companies and organizations trying to plan for change – particularly major disruptions that could impact the way they do business.
As an instructor with the University of Houston's professional certificate in foresight, Terry Grim teaches students to think about the future in three "time horizons."
Horizon One is the sort of incremental change we see happening now – limited testing of autonomous cars or fast food restaurants trying out robot servers. Horizon Three is farther away, where planners can envision cities of the future.
The trouble, Grim said, comes in the middle.
"What we're bad at is when Horizon One hits big time, but Horizon Three hasn't kicked in yet," she said. "We have this chaos and conflict."
Horizon Two is the period when, for example, only half the cars on the road are connected and controlled by artificial intelligence, with the other half occupied by traditional human drivers. Or when automation has displaced workers without new sectors of the economy to employ them.
"That Horizon Two is really a painful time," said Grim, who also works with the Foresight Alliance, a Washington-based consulting firm. "In my mind, I think even though it may be short-lived when you look at the stretch of humankind, there are a lot of years in the middle that are not going to be kind to people."
This changing relationship to work – in an era with the potential for many fewer and more highly skilled jobs – is what causes futurists like Martin Ford, author of "Rise of the Robots: Technology and the Threat of a Jobless Future," to worry. At least in the short term.
"You may have a hard time taking a fast food worker that loses a job and putting them into this new kind of work," Ford said. "Whether that's optimistic or pessimistic is how we deal with it as a society."
In Ford's books and talks, he generally details his belief that there won't be enough jobs in the future to go around. He said that's true for both blue- and white-collar workers. The latter is already starting to see some displacement in sectors like finance, relative to the size of company revenues, as firms embrace technology to increase efficiency.
"A lot of areas of the economy are getting a lot less labor intensive," Ford said.
Breaking the logjam
But economists like Jim Bessen, executive director of Boston University's Technology & Policy Research Initiative, said the job prospects won't all trend in the negative direction.
In some industries, costs or supply have kept consumer demand in check. More automation, he said, can break the logjam and boost employment, rather than depress it.
That was the case for textiles around the turn of the 20th century, he said. Advances in technology caused the prices of cloth to plummet, allowing more consumers access to upholstered furniture, drapery and closets full of clothing.
"The question we have to ask as we start looking at these new technologies – robots, artificial intelligence – (is) are these in industries where there's a lot of pent-up demand, or are these mature industries?" Bessen, author of "Learning by Doing: The Real Connection Between Innovation, Wages, and Wealth," said.
While he describes himself as neither an optimist nor a pessimist, he's more skeptical than others of a future with far less work.
Part of that skepticism comes from looking at the past. One of his studies examined occupations from the 1950 Census to see how many jobs had been eliminated not by drops in demand, but by automation.
Bessen could find only one: Elevator operators.
"There's a tremendous amount of automation going on, but that automation is partial automation," he said. These technological changes mean jobs evolve, rather than evaporate outright.
Despite a booming economy and low unemployment now, Kotlikoff said he's concerned by other indicators that don't bode well for the future – high deficits, stagnant wage growth, declining savings and growing inequality.
"Setting aside robots, we've got terrible economic problems facing us that haven't been addressed by either party. Trump is making it worse," Kotlikoff said, pointing to the potential for a looming trade war over tariffs with long-term implications. "Add in automation, and it can make even an economist depressed."
What the future holds
But economists and futurists say they aren't necessarily resigned to the doomsday scenario.
Although Ford thinks the coming disruption in the economy will be permanent, it may lay the foundation for a workforce that doesn't need boring, repetitive jobs that people hate. What remains are creative jobs, skilled trades and work that requires sophisticated interactions or emotional intelligence.
It's a vision that's more "Star Trek" than "Blade Runner."
"In the long run I'm very optimistic, because it could lead to a better world for humanity," Ford said. "A world where people have to work less is not a pessimistic future."
To get there, we have to plan for the future appropriately. That might mean some sort of universal basic income, he said, or additional incentives to place value on other productive uses of time.
"If we don't do that, we're going to run into a distribution problem or an inequality problem where people get left behind," Ford said.
Grim said such measures aren't about being nice – they're about being smart. Without a broad-based economy, demand can collapse, and a world with fewer jobs has to be equipped to handle that.
"I think the biggest issues are really political," Grim said. "What is our vision as a country or as a state like North Carolina for how to employ people where we can leverage their skills and talents and pay for that?"
Those are questions she said need to be answered now, before time runs out.
"I worry that some museum in the future is going to show what countries like Denmark were doing while the U.S. lost 10, 20 years fiddling around with stupid stuff," Grim said.
Exactly how long we have until the robot revolution, though, is hard to say. And such predictions have stumped economists for centuries.
John Maynard Keynes, after all, predicted in 1930 that workers almost 100 years later would only need to toil for a 15-hour work week.
"Keynes was no dummy. But he underestimated demand," Bessen said. "It's very hard to know what people are going to want."
Kotlikoff is generally grim about our prospects. What little optimism he has is in the inaccuracy of our measurements.
His best-case scenario, in a sense, is that we're wrong about everything.
"Our models are pretty abstract," Kotlikoff said. "We may not be catching major things that are important."
At the New Bedford suit maker, factory chief Joe Bahena said the 800-worker facility still needs plenty of people to produce Joseph Abboud garments for Men's Wearhouse – even as they consider tech upgrades for other parts of the shop. He said their investments so far have led to a spike in demand for their bespoke suits, which now make up 50 percent of the factory's production.
That worked out for Kotlikoff – he bought the custom suit after all.
