
The economic effects of automation - VHRanger
https://www.singlelunch.com/2019/10/21/the-economic-effects-of-automation-arent-what-you-think-they-are/?customize_changeset_uuid=d86dd569-b17f-49f7-9f42-6f722fbf0dd6&customize_autosaved=on
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philipkglass
_When ATMs were introduced to banks in the 1980s, people thought bank tellers
would quickly stop existing. Over time, each bank branch did end up employing
fewer tellers. However, ATMs made it cheaper to operate bank branches, so more
bank branches opened and there were eventually more bank teller jobs over
all._

This comforting trend ended several years ago.

Here's a blog that plots teller employment numbers up through 2015:

[https://greatdisruption2018.com/the-project/the-parable-
of-t...](https://greatdisruption2018.com/the-project/the-parable-of-the-bank-
tellers/)

Here's the BLS data and outlook for the future:

[https://www.bls.gov/ooh/office-and-administrative-
support/te...](https://www.bls.gov/ooh/office-and-administrative-
support/tellers.htm)

Teller employment peaked in 2007 at over 600,000. It's down to 472,000 as of
2018 and projected to decline another 12% by 2028.

You need to keep following the numbers to distinguish "the prediction of
technological unemployment was premature" from "the idea of technological
unemployment is mistaken."

~~~
VHRanger
Author here.

> Teller employment peaked in 2007 at over 600,000. It's down to 472,000 as of
> 2018 and projected to decline another 12% by 2028.

By that point we're not talking about the effect of ATMs anymore, which were
introduced in the late 1980s/early 1990s.

This effect is more likely due to online banking and banking apps. We don't
know yet how this change reallocated

> "the prediction of technological unemployment was premature" from "the idea
> of technological unemployment is mistaken."

Not really.

If you look at the other example (spreadsheet apps and bookkeepers) you see
that even if a job stops existing, the remaining tasks get allocated elsewhere
over time.

This overall dynamic is supported by the researchers in labor economics (see
papers linked in the post)

This doesn't mean the transition is smooth, or even benefitial, for the job
holder, but it doesn't translate to long run unemployability.

~~~
freewilly1040
Even if the decline in teller employment is not due to ATM's, the parable
still suffers if another convenience innovation came along and did kill jobs.

~~~
VHRanger
It didn't kill jobs in aggregate -- unemployment is at its lowest in decades.

The bank teller jobs might be disappearing over time, but they'll get
reallocated.

The point of the article is that that reallocation process can be painful for
those affected and increases inequality.

~~~
chii
is unemployment really as low as the reported figures?

i dont know what to think after looking at
[http://www.shadowstats.com/alternate_data/unemployment-
chart...](http://www.shadowstats.com/alternate_data/unemployment-charts)

~~~
VHRanger
Shadowstats is garbage.

Their inflation index is literally the official CPI index plus a constant
(~2.8 last time I looked). He's that lazy about his scam.

The maintainer of shadowstats isnt in the business of maintaining an honest
set of metrics, he's in the business of selling misinformation around hard to
measure things.

------
neilwilson
"Similarly, as tasks are automated in the modern economy (such as
manufacturing tasks) workers will shift their time into other tasks like the
growing service economy"

I like to call this the "lump of labour fallacy fallacy". It falls down
because complete fungibility isn't actually a thing. You can't turn a dumpster
diver into a brain surgeon, no matter how many hours of training you apply. As
tasks are automated new jobs and tasks are created _generally at a higher
skill and intelligence level_.

This excludes an increasing fraction of the workforce all of whom still need
something to do of service to others for their own mental wellbeing as well as
to fulfil the social contract requirement of reciprocity.

~~~
VHRanger
> It falls down because complete fungibility isn't actually a thing.

Agreed.

Studies on those who lost their jobs in the manufacturing towns (Autor, Dorn &
Hansen 2016, linked in the article) shows that losing your job to automation
is a harrowing experience.

The jobs reallocate _over time_ but it's a bumpy process that can ruin the
lives of those affected.

> As tasks are automated new jobs and tasks are created generally at a higher
> skill and intelligence level.

Not really. Automation tends to hollow out middle skill jobs, leaving high
skill and low skill jobs available.

This increases inequality.

~~~
ska

      The jobs reallocate over time but it's a bumpy process that can ruin the lives of those affected.
    
    

This is why broadly speaking the historical Luddite's were right, from their
own perspective. It may the best thing to do for an overall economy, but
pretending people won't get screwed over in the process isn't doing anyone
favors.

Not addressing this fundamentally as a matter of policy is a choice. I'm not
saying it is the wrong choice, just that being transparent about what that
means would seem to be the best course.

~~~
chii
> being transparent

being transparent means the admission that public policy has failed the
vulnerable and those in need. I dont believe this problem will ever be
"admitted to" \- and it's more likely that the gov't will let it "blow over"
(read, let those who got automated out of a life to fend for themselves, and
eventually they either die/find new opportunities on their own, or the family
slack picks them up).

------
post_below
There are issues with some of the earlier points, for example:

> We automate tasks, not jobs

We automate both. One popular example is trucking. There are 3.5 million truck
drivers in the US alone. And of course this is an area where complete
automation is on the horizon. The tech exists, it's getting close to ready for
large scale deployment and big players are working on it.

The industrial revolution comparison is apt but only to a point. The rate of
innovation in tech is speeding up and our ability to automate jobs away faster
than we can adapt along with it.

That said the article goes on to focus on what I think is one of the key
points in the automation conversation: wealth inequality.

If we don't come up with a way to share the wealth produced by increasing
automation, the current system will funnel almost all of it to the top.

~~~
VHRanger
> And of course this is an area where complete automation is on the horizon.
> The tech exists, it's getting close to ready for large scale deployment and
> big players are working on it.

That's incorrect. We're really far off still from level 5 self driving cars if
you follow developments in that area.

However, the major task in the truck driving job (highway driving) is
automatable already. Other ones (urban maneuvering, loading/unloading, etc.)
are much harder to automate.

> That said the article goes on to focus on what I think is one of the key
> points in the automation conversation: wealth inequality.

I'm the author, thanks for echoing my reading on the dynamics.

People focus on an imaginary problem when a very real one is happening
underneath our noses.

~~~
post_below
The rate at which we're approaching full self driving capability (especially
with trucking where, for many routes, it's almost all freeway driving) is fast
enough that it's safe to say those 3.5 million truckers will not be ready for
the change. Even if it takes 10 years they won't be ready for it.

And that's just the easiest example. Past revolutions which have decreased the
cost to provide basic needs happened considerably slower than the digital
revolution is happening.

I don't think it's an imaginary problem at all. Overblown yes, I completely
agree... but if that's what it takes to keep the conversation moving, I'm ok
with that.

The urgency, I think, is not "all the jobs will go away tomorrow", but that
it's a big enough problem that the time to start solving it is now. And
unfortunately the world is really loud these days, it takes volume to be heard
over the noise.

------
amelius
> Any argument whose logic assumes there’s a finite amount of work in the
> economy is fallacious and wrong.

Finite resources says it is the case though.

------
ggffryuuj
This is like reading a global warming denier. The earth has heated up and
cooled down before. Global heating has never been catastrophic before so why
would it be now?

This guy literally uses graphs and charts from the industrial revolution and
and generalizes the results over to automation as a _concept_. And then he
confidently states that this proves that the _concept of automation_ benefits
the highly educated. Yeah, well when high level signal processing is automated
that won’t be true will it?

Just like global warming, this isn’t a problem that can be understood by
looking at localized effects in the recent past. It’s a problem that can only
be understood through first principles reasoning. Greenhouse gasses heat the
planet. Therefore global warming is a thing. Humans are high level signal
processing machines. Therefore the automation of high level signal processing
will displace humans in the global market. It’s just inescapable. And yet
people mental-gymnastic their way out of it.

And whenever I see “alarmist” in someone’s argument, it’s never a strong
argument. The alarmists are right.

~~~
VHRanger
> This is like reading a global warming denier.

It's the opposite. The reading from the consensus experts is that the labor
effects of automation aren't unemployability, it's worsening job prospects and
increasing inequality.

Those are different things which require different solutions.

> And then he confidently states that this proves that the concept of
> automation benefits the highly educated.

I'm the author. I linked to 30 or so sources in the article, most of them
academic publications from the most respected researchers in the field (David
Autor, Daron Acemoglu, etc.)

The article is basically a literature review and vulgarisation for laypeople
audiences. It's not some theory I just came up with.

> It’s a problem that can only be understood through first principles
> reasoning.

3 papers by Daron Acemoglu linked to in the article do that and test their
theory against recent trends to see if it holds.

~~~
ggffryuuj
Wow, hello. I’m about to clock In the for the day so I’m afraid I can’t
address your sources until later tonight. But in the meantime, saying that
other people think this is true doesn’t advance your argument in my mind. I
don’t care what “experts” say, although I have no problem picking it apart,
because there are no experts in AI that doesn’t exist yet. Nobody has first
hand experience studying a real world example of what we are talking about.
High level signal processing is the only thing that humans monopolize. The
more of that that gets automated, culminating with AGI, the closer we are to
the obsolescence of humans. It’s just blindingly simple. And please don’t call
me an alarmist. I’m genuinely concerned here. I don’t ruminate in this because
it’s fun.

------
elfexec
> Job automation underpins the explosion of economic growth we’ve seen since
> the 1830’s industrial revolution.

What underpinned the explosion of economic growth in the 1830s to 1850s was
opium money we stole from china and whale blubber. What underpinned economic
growth since the 1850s was oil and population explosion along with dumping
large populations in small areas in order to boost consumption.

We know for a fact that automation doesn't underpin economic growth because if
it did, Japan and most of europe would be the centers of economic growth. Why
has automating Japan lagged so far behind china or the US since the 90s? Their
population has stagnated. While China added 300 million more people and the US
added 100 million people in that time, Japan added hardly any.

Here are the list of the fastest growing economies. Automation isn't the first
word to come to mind when I think of many of these countries.

[https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_...](https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_growth_rate)

Economic growth is essentially population growth + moving that population to
cities so that they can consume more efficiently. If automation truly
underpins economic growth, that list of GDP growth rates would be led by
primarily america, european nations and a few east asian nations.

