What will happen to American jobs, incomes, and wealth a decade from now?
Predictions are hazardous but survivable. In 1991, in my book The Work of Nations, I separated almost all work into three categories, and then predicted what would happen to each of them.
The first category I called “routine production services,” which entailed the kind of repetitive tasks performed by the old foot soldiers of American capitalism through most of the twentieth century — done over and over, on an assembly line or in an office.
I estimated that such work then constituted about one-quarter of all jobs in the United States, but would decline steadily as such jobs were replaced by new labor-saving technologies and by workers in developing nations eager to do them for far lower wages. I also assumed the pay of remaining routine production workers in America would drop, for similar reasons.
I was not far wrong.
The second category I called “in-person services.” This work had to be provided personally because the “human touch” was essential to it. It included retail sales workers, hotel and restaurant workers, nursing-home aides, realtors, childcare workers, home health-care aides, flight attendants, physical therapists, and security guards, among many others.
In 1990, by my estimate, such workers accounted for about 30 percent of all jobs in America, and I predicted their numbers would grow because — given that their services were delivered in person — neither advancing technologies nor foreign-based workers would be able to replace them.
I also predicted their pay would drop. They would be competing with a large number of former routine production workers, who could only find jobs in the “in-person” sector. They would also be competing with labor-saving machinery such as automated tellers, computerized cashiers, automatic car washes, robotized vending machines, and self-service gas pumps — as well as “personal computers linked to television screens” through which “tomorrow’s consumers will be able to buy furniture, appliances, and all sorts of electronic toys from their living rooms — examining the merchandise from all angles, selecting whatever color, size, special features, and price seem most appealing, and then transmitting the order instantly to warehouses from which the selections will be shipped directly to their homes. So, too, with financial transactions, airline and hotel reservations, rental car agreements, and similar contracts, which will be executed between consumers in their homes and computer banks somewhere else on the globe.”
Here again, my predictions were not far off. But I didn’t foresee how quickly advanced technologies would begin to make inroads even on in-person services. Ten years from now I expect Amazon will have wiped out many of today’s retail jobs, and Google’s self-driving car will eliminate many bus drivers, truck drivers, sanitation workers, and even Uber drivers.
The third job category I named “symbolic-analytic services.” Here I included all the problem-solving, problem-identifying, and strategic thinking that go into the manipulation of symbols – data, words, oral and visual representations.
I estimated in 1990 that symbolic analysts accounted for 20 percent of all American jobs, and expected their share to continue to grow, as would their incomes, because the demand for people to do these jobs would continue to outrun the supply of people capable of doing them. This widening disconnect between symbolic-analytic jobs and the other two major categories of work would, I predicted, be the major force driving widening inequality.
Again, I wasn’t far off. But I didn’t anticipate how quickly or how wide the divide would become, or how great a toll inequality and economic insecurity would take. I would never have expected, for example, that the life expectancy of an American white woman without a high school degree would decrease by five years between 1990 and 2008.
We are now faced not just with labor-replacing technologies but with knowledge-replacing technologies. The combination of advanced sensors, voice recognition, artificial intelligence, big data, text-mining, and pattern-recognition algorithms, is generating smart robots capable of quickly learning human actions, and even learning from one another. A revolution in life sciences is also underway, allowing drugs to be tailored to a patient’s particular condition and genome.
If the current trend continues, many more symbolic analysts will be replaced in coming years. The two largest professionally intensive sectors of the United States — health care and education — will be particularly affected because of increasing pressures to hold down costs and, at the same time, the increasing accessibility of expert machines.
We are on the verge of a wave of mobile health applications, for example, measuring everything from calories to blood pressure, along with software programs capable of performing the same functions as costly medical devices and diagnostic software that can tell you what it all means and what to do about it.
Schools and universities will likewise be reorganized around smart machines (although faculties will scream all the way). Many teachers and university professors are already on the way to being replaced by software — so-called “MOOCs” (Massive Open Online Courses) and interactive online textbooks — along with adjuncts that guide student learning.
As a result, income and wealth will become even more concentrated than they are today. Those who create or invest in blockbuster ideas will earn unprecedented sums and returns. The corollary is they will have enormous political power. But most people will not share in the monetary gains, and their political power will disappear. The middle class’s share of the total economic pie will continue to shrink, while the share going to the very top will continue to grow.
But the current trend is not preordained to last, and only the most rigid technological determinist would assume this to be our inevitable fate. We can — indeed, I believe we must — ignite a political movement to reorganize the economy for the benefit of the many, rather than for the lavish lifestyles of a precious few and their heirs. (I have more to say on this in my upcoming book, Saving Capitalism: For the Many, Not the Few, out at the end of September.)
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama’s transition advisory board. His latest book is “Aftershock: The Next Economy and America’s Future.” His homepage is www.robertreich.org.