Robots Ate My Job!!!

For hundreds, if not, thousands of years human beings have been terrified of technology taking their jobs and livelihoods. Mark Cuban recently tweeted, “Automation is going to cause unemployment and we need to prepare for it,” with a link to an article about taxing robots. What Cuban appears to be suggesting is that technology will cause long-term unemployment and reduce the need for people in the workforce. Is this a Y2K type of preparation or preparation for a walk in the park, Mr. Cuban? Or is it simply fearmongering…?

Mark Cuban recently tweeted, “Automation is going to cause unemployment and we need to prepare for it”

This fear originates because people believe that jobs are completely lost as a result of technological advancements over time. Which with a cursory glance over history could be believable. A more intimate fear is your job will be replaced by Artificial Intelligence or technology in the not so distant future. This phenomena is known as technological unemployment.

Here are some facts that will help you cope with the inevitable changes that arise with the development of new technology:

What happened to the Milkman?. Until about the 1950s and 60s, milk had to be delivered fairly regularly to homes all across the United States because refrigerators were not common place in many homes and because it was very difficult to transport large amounts over long distances without spoiling. But with the advent of large interstate highways, refrigerated trucks and air cargo and better refrigerators in kitchens, this service simply began to erode and died in about the late 60s, early 1970s. However, when we compare the unemployment averages in the 1940s through the 1970s, we don’t see a major spike in unemployment . In 1949, the unemployment rate was 5.9% and in 1970 that number was down by a full percent at 4.9%. The highest unemployment within that 20+ year span was 1961 at 6.7%. Technology certainly destroyed the milkman, but it doesn’t truly show a significant, long-term increase in unemployment.

However, when we compare the unemployment averages in the 1940s through the 1970s, we don’t see a major spike in unemployment .

Unchanging Unemployment. Over the past 25 years, many things have changed from a technological standpoint. In 1992, cell phones were not massively popular. The internet was not in every home or even used on a regular basis by the masses. VHS tapes were widely used until about 1997 when DVDs made their first appearance. And, in 1992, the U.S. population was an estimated 256 million with an unemployment rate of 7.6%. Today the U.S. population has grown to approximately 325 million and the unemployment rate has decreased to between 4.7% and 5%. In fact, think of all the technological advancements since the Roaring 20s, TVs, Copy Machines, Frozen Food, Helicopters, Microwaves, ATMs, etc., and the unemployment rate in 1920 was 5.2% with a population of about 106 million. Each of the technologies listed above brought about major concerns for the labor market. People thought they were definitely going to lose their jobs. And some of them did, but not for long. They found new and exciting ways to earn income, provide for their families and be productive in society. This idea that technology will cause mass unemployment is a fallacy. And it has a name.

People thought they were definitely going to lose their jobs. And some of them did, but not for long.

The Luddite Fallacy. The Luddites worked in the textile industry in 19th century England. They were concerned because automated weaving machinery was replacing their comfortable, high paying jobs. So they went on a rampage throughout England destroying these machines. What they didn’t consider was the fact that the new automated looms would produce more clothing and materials faster and cheaper which allowed consumers to purchase more. In turn, this provided jobs for the “Luddites” in wholesale and retail settings as well as jobs repairing the machinery. This new technology and automated process also drove the cost of living down significantly.  Financially speaking, it became incredibly affordable to make and purchase clothing and textiles which afforded the middle and lower class the opportunity to buy inexpensive but well-made clothing for the first time.  We can learn something from the Luddites: technology doesn’t reduce opportunities for people to work; it merely changes the economic ecosystem.

Technology doesn’t reduce opportunities for people to work; it merely changes the economic ecosystem.

As technology progresses, we see new job categories created, expand and shrink only to expand in other areas. If long-term technological unemployment were true, we would have experienced it dramatically in the 20th century, but we didn’t. Quite the opposite actually. In the 20th century, we saw some of the greatest economic growth and expansion in world history, in part, due to the great technological advancements during that time.

So please don’t panic about losing your job to a robot. It may happen, but remember that when one door closes another opens.