Friday, August 15, 2014

The Conundrum of Automation

Large Corporations, like General Electric, used to be able to afford "corporate retreats" like this one on Association Island, which is now an RV park.  Today, corporate budgets are much tighter, and employee's labor so valuable, that it can't be wasted on such perceived silliness.   Whatever happened to the promise of Automation?  That we would work less and live like kings?

A reader recently suggested a posting about how automation is "taking away our jobs!" based on a YouTube video he had watched.  At first, I dismissed this out of hand, as it did not seem relevant, and I had addressed the topic before.  But then I realized I was vacationing on Association Island, a former General Electric retreat for its managers and engineers.   The activities on the island were parodied in Kurt Vonnegut's novel, Player Piano, which I downloaded into my Kindle and am re-reading for the first time since 10th Grade.

Speaking of Kindles, how many people has the Kindle put out of work?  Lumbermen who cut trees, paper mill workers, slowly getting cancer, booksellers, retail clerks, truck drivers - the list goes on.   Paperless book put the paper business, out of business.

But on the other hand, it also means an obscure convince-store clerk can rise to literary super-stardom, in this brave, new digital world.

Vonnegut seemed pretty cool when I was a sophomore in High School, but in retrospect, seems sophomoric.  Now, I don't want to take a piss on Vonnegut, lest he go off the deep end and do a Robin Williams on us.  Celebrities are so sensitive, and we need to boost up their egos, lest we lose another one.  (We're safe here, Vonnegut died in 2007).

Was that too soon?  Perhaps.

Anyway, after 40 years, Vonnegut seems more like a second-rate Socialist agitator than anyone with real insight.   His views on automation and technology, while raising some interesting questions, don't really provide any answers.  Moreover, the problems he describes in his book have yet to come to fruition.  In fact, with increased automation, it seems that more and more of us are working harder and longer than ever before.

And that is the conundrum of Automation.

Back in the 1960's, most women stayed at home and raised children.  Half the work force was out of the work force.  And most of us worked 40-hour workweeks, and if you were an executive, you took an hour-long two-martini lunch.   We worked hard, but hey, we played hard, too.

Companies like General Electric could afford to buy an island, and then ship off its top talent for a week every year to goof off, attend "seminars" and just generally act like a bunch of drunken frat boys.  Today, such "corporate retreats" are becoming rarer and rarer, as increased scrutiny of costs and labor have meant that every dollar and every minute has to be watched like a hawk.

Back in the 1960's, every company had an army of accountants, clerks, mailroom boys, secretaries, and whatnot, filing away papers on every aspect of the company's operation.  Mainframe computers had less computing power than your cell phone (far, far less, in fact) and were limited to a few accounting and inventory applications, using punch cards).

All that is gone, and all those jobs no longer exist.

And in the factory, it took twice as many men (and they were all men) to assemble a car, as each machine was operated by hand and every weld was done by hand.  Robotic welders and painters and assembly machines have more than halved the labor force in most factories today.

On the farm, larger and larger equipment - which is also more automated - means less labor needed to farm a given acre.  No longer do we bale hay into little cubes and then stack them by hand with a half-dozen helpers.  A single man can create enormous hay "rolls" which then can be stacked with a fork-lift.  The population of farmers has been on a steady decline since 1900, and yet our production has continued to skyrocket.

Yet today, we work longer hours than ever, have shorter vacations, and what's more, most women are in the labor force as well.   And there are far more of us today than 50 years ago.   All this robotics, automation, computers and whatnot, and we are still on the treadmill.

Despite all the hue and cry about "unemployment" these days, it still remains relatively low (under 10%, approaching 5%) and really is at background levels.   Most of us - the vast majority - are still working and still working hard.

What happened to the forecasts of the 20-hour workweek?  In the future, we were told, consumer goods would be cheap, and everything would be done by robots.  We would laze around and play golf and have a good time and whatnot, while our machine servants did all the work.

What happened?

What I think happened is that automation did not "take away jobs" but merely made some jobs obsolete - while creating new jobs.  It also meant that we can produce more products and more technologically complex products than in the past - at a lower cost.

I keep saying this, but no one listens (because we all like to feel put-upon): We are an enormously wealthy country, and far wealthier than we were 50 years ago.   Today, a person living below the poverty line has a house, a car, air conditioning, a microwave, a refrigerator, and a flat-screen television.   Some of these products simply did not exist 50 years ago.  Others, such as microwaves, were owned only by the very rich.

We own more "stuff" than in the past - or have the opportunity to do so.  Most choose to do so.  In 1960, a "fancy" motorhome might be a 30-foot Winnebago, built on a bread-truck chassis.  Today, people cruise into the campground in a rock-star bus built on a commercial bus chassis, and costing more than their house.  Whether this is a smart financial move is debatable.  The point is, we have far nicer shit than in 1960.

And that is where the automation went - in making products better and more complex, but at a price far lower than before.   

My Dad's first Color television, and RCA "Colortrak" 25" set, cost over $500 in 1975, and got three channels.   Today, you can buy a flat-screen television with six inputs that will get a dozen "high definition" stations off-the air, for less than half that price.  In 1975 dollars, it would be 1/10th the price.

Vonnegut does address this issue in Player Piano, and in fact, mocks it.  Corporate shills, in his book, advertise to the masses that no matter wealthy the King of France was, he never could have had a snowmobile.  In effect, people today are wealthier than Kings in the past.  While Vonnegut says this sarcastically, there is a nugget of truth to it - we are wealthier than in past eras.  We no longer worry about hunger, but how to lose weight.  We no longer worry about dying of dysentery or getting polio.

Of course, automation has really yet to get into high gear.  The big drop in product costs in the last 20 years has been cheap labor, not necessarily in automation.   We have things made in Asia, because labor costs are cheap.   However, once the Chinese and their brethren taste a bit of middle-class living, their labor costs will go up - and there are signs this is already happening.  American companies, just to be competitive, have to use robotics and minimize labor costs.

And there are signs this is happening.  With increased automation and cheaper labor costs, many overseas companies are investing in America, building products here, and exporting them all over the world.

Of course, this comes at a price.  The post-war boom era that Vonnegaut wrote in, is long gone.  Back then, a man could get a brainless job in a factory, being a human machine, and get a fairly nice middle-class paycheck.   Today, such jobs are rare, and most now require some computer training.   A lathe operator doesn't operate one lathe anymore, he rides herd over a half-dozen NC (Numerically Controlled) machines and needs to know how to program them.

But that earlier era was an anomaly, not normality.   We tend to view the postwar era as the "good old days" and wonder what went wrong.  The reality is, we milked the system for all it was worth, in terms of strikes, labor unrest, higher and higher wages, and deferred pension obligations.  It all started coming home to roost in the 1970's when energy costs skyrocketed and the system became unsustainable.  It took another two decades for "the walking dead" to finally collapse, and the industrial base of the "rust belt" to collapse.

Is this a bad thing?  You can view it as such.  It is just reality, playing its ugly hand, and you can't deny reality for very long.

And in that regard, the point is moot.  Automation, Computers, the Internet, and so forth, are here to stay.  We are not going back to vinyl records, paper books, or hand-welding cars.   No one yearns for the days of the paper punch card (and IBM's monopoly on the business).  Moreover, if you start to scratch the surface, the "good old days" were not always that good, particularly for women and minorities.

Automation has provided us with a better lifestyle.   We can choose to have a lot more shit today - or choose to live on less and have more wealth.  Most choose the former and then look for external sources to blame for their predicament.  Political parties, wall-street fat cats, outsourcing CEOs, or, I suppose, automation, are the boogeymen for these weak thinkers.

The reality is jobs remain, and many of these new "high tech" jobs remain unfilled - for lack of qualified applicants.  Few want to do the hard thing and study subjects like mathematics, engineering, or computer programming.  Kids today like to play video games, few think about a career in designing them.  Kids like to hop up their Mom's old jalopy, but few would think about becoming an automotive Engineer or even a Certified mechanic.   It is far easier to complain that there "are no jobs" and ask for a handout.

And the pace of automation will continue to increase, over time. Whether this will result in the dreamed-of 20-hour workweek and robot butlers, well, we'll see.   Frankly, I think that people need work not for just an income, but for other reasons - a sense of self-worth and value to society.   And that was one point of Vonnegut's book that did make sense - not that automation was bad, per se, but that people need work to feel they have value.

We have been traveling across the country in our RV, and it is interesting to see how many State Parks are cutting back, shutting down, or limiting services and access. The reason given is the lack of money in the budget.  But at the same time, we have bloated our budgets with government give-aways in the form of food stamps, welfare, and the like.  And a core group of people complain that they can't find work.  It would seem an obvious answer, that instead of paying people not to work and then shutting down government services, to instead put those people to work at those cut-back jobs.

But of course, that runs you headlong into the government employees unions, who will demand not only a middle-class salary and benefits for those workers, but upper-class salary and benefits.

We are right back where we started, in the postwar era - where autoworkers could demand the wages of doctors, just to slap bolts on cars.

Of course, Vonnegut anticipated this as well - positing that in the future, the Government would absorb all excess labor in the Army or in the "Reeks and Wrecks" - a Reconstruction and Reclamation Corps similar to the CCC.  This never materialized, mostly because unemployment due to automation never really reached levels where government intervention of this sort would be required.

Vonnegut's dystopian future was set in the late 1950's.  Since then, automation has expanded considerably, and with each wave of new technology (industrial robotics, personal computers, the Internet) thousands if not millions of jobs were obsoleted.  Yet, for some reason, the unemployment rate has remained fairly steady over the years, varying from 7-10%, sometimes less.

One would have thought that, given this huge cultural and technological shift, that unemployment rates would approach 50% or more.   But not only has unemployment remained steady, the economy has absorbed an increasing population of workers, and the entry of women into the workforce.

In short, the concept of "automation taking away our jobs" just isn't going to happen.   If it had, it would have happened by now.

This is not to say that people whose job skills are obsolete will have to retrain for other work.  It is not impossible to do - I have changed my career several times already.   And it does not mean that some folks, approaching retirement age, will be obsoleted before they are ready to retire.  I have written about that before - expecting a steady job until age 70 is foolish thinking.  You could be out on the street for a number of reasons - besides automation.