Should the Trump Administration be Worried About Automation?

Should the Trump Administration be Worried About Automation?

In an interview with Axios’s Mike Allen on Friday, US Treasury Secretary Steven Mnuchin said he was unconcerned about the possibility of machines replacing significant numbers of human workers in the near future, saying it was “not even on [the Trump administration’s] radar screen” and insisting that displacement would not be an issue for another 50-100 years. “In fact I’m optimistic,” he told Allen.

While there’s a healthy ongoing debate over just what impact automation will have on the workforce, Mnuchin’s assertion that it is not a matter of any particular urgency raised some eyebrows. “Just about anyone who works on or studies machine learning would beg to differ,” the Atlantic’s Gillian B. White responds:

To be sure, most experts agree that the impact of advancing artificial intelligence won’t be felt equally. It’s less likely that machines will suddenly be able to replace the entirety of a human’s workload, but instead, that machines will become able to perform more and more individual tasks—and eventually to solve more complex problems. But without planning and intervention, such as retraining efforts, this could create an even more stratified workforce, where only the most educated, highly skilled, senior workers have stable work. And that would have disastrous implications for an already troublesome economic inequality gap.

Writing at Slate, Daniel Gross also takes issue with Mnuchin’s analysis, considering that we are already seeing automation in fields as diverse as manufacturing, fast food, finance, insurance, and even law. Manufacturing is one sector for which Gross finds Mnuchin’s lack of concern particularly troubling:

Whether you’re visiting a GE turbine plant in South Carolina, or a cable-modem factory in Shanghai, the thing you’ll notice is just how few people there actually are. It’s why, in the U.S., manufacturing output rises every year while manufacturing employment is essentially stagnant. It’s why it is becoming conventional wisdom that automation is destroying more manufacturing jobs than trade. And now we are seeing the prospect of dark factories, which can run without lights because there are no people in them, are starting to become a reality. The integration of A.I. into factories is one of the reasons Trump’s promise to bring back manufacturing employment is absurd. You’d think his treasury secretary would know something about that.

Indeed, PwC’s newly released UK Economic Outlook, which focuses on the impact of automation on the labor market, compares the UK other advanced economies and finds that the US is particularly at risk of losing jobs to automation, with nearly 40 percent of American jobs potentially vulnerable to displacement in the next 15 years, against 35 percent in Germany, 30 percent in the UK, and just 21 percent in Japan. Recode’s April Glaser highlights the relevant section of the report:

The U.S. has a higher percentage of jobs under threat by automation because more workers in the U.S. are employed in positions that require routinized tasks, like filling out paperwork. Jobs most at risk of being done by new technologies are in industries related to transportation, manufacturing and retail. …

One example of how jobs in the U.S. may be more susceptible to automation than jobs in the U.K., according to the study, is in the financial services sector. Although both countries have similarly service-dominated economies, financial services jobs in the U.S. are more retail oriented and routinized. Jobs in financial services in the U.K., however, are mostly occupied by professionals working in international banking, whose jobs are harder to automate and require more education.