The Coming Wave of Automation/AI Taking Over Jobs Will Be Unlike Anything We’ve Seen

The current political spotlight when it comes to jobs and employment, is focused on the threat of corporations outsourcing or illegal immigration reducing jobs for citizens. The anxiety about the struggle to find gainful employment was a big part of anti-establishment politics that led to Britain’s “Brexit”, and America’s election of Trump. Governments have been slow to come to the aid of those who have had their jobs displaced and have had to settle of jobs that paid much less than what they were previously making. Economic policy wonks will have the argument that outsourcing has been great in terms of reducing the cost of goods. Those who have been displaced, however, know the reality that it doesn’t matter if goods are cheaper if one doesn’t have a job to earn enough money to pay for these goods.

What isn’t getting much attention in the main media or political theater is the much bigger threat on the horizon of advances in automation and AI in replacing jobs on a scale never seen before at all skill levels.

Folks will argue that people have complained about the threat of job loss from automation since forever and there have always been new jobs created to replace the old ones lost.

 

So is this new alert about automation/AI just another false alarm like the Boy Who Cried Wolf? Some say so, but many are starting to see this time could be the real deal when it comes to the loss of jobs done by human labor.

 

Here’s a chart of predicted job loss due to automation in various fields:

The problem with the above chart is it’s just a “guess” based on current technology and assumptions, but there’s a good change these assumptions aren’t taking into effect the speed and advancement of technology and AI development. As it is now, automation is appearing in specialty fields like law, music, journalism, and medical surgery. This is one of the reasons why this new wave of technology is different- it won’t be about just simple labor, but complex skilled labor as well, that few thought would be under threat.

Will the governments be proactive in staying ahead of the problem , or will they be reactive, and wait until job losses are are crisis levels before taking any meaningful action? Based on past performance, something tells me they won’t be ready as we move into this new frontier.

Here are some interesting, but sobering videos of this topic as additional food for thought:

 

 

 

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Good Read on the Rise of Automated Systemized Trading/Investing Vs Humans

We can see the effects of automation all around us and how it is impacting the job market. The advent of self driving cars will soon be upending the taxi industry. What many people may not be aware of is automation is moving into many job categories previously thought to be “robot proof”. There are inroads being made in law with automated systems replacing the tasks done by paralegals. Robots can now perform complex surgeries that most thought could only be done by a human doctor. Some news articles are now being generated by computer, and the list goes on…

The trading and investment industry has certainly not escaped this phenomenon. Discretionary traders and portfolio managers are under pressure from automated index funds and system trading programs that are proving to be superior, at least under current market conditions over the last few years.

Here’s an interesting read on the rise of automated systems squeezing out human traders:

https://www.linkedin.com/pulse/revenge-humans-how-discretionary-managers-can-crush-leigh-drogen

 

 

The Grim News: U.S. jobless rate hits 25-year high at 8.1%

Another 651K jobs lost in February brings us up to these current record levels. In addition, the January jobs loss numbers were revised upwards to include an additional 161K jobs going bye bye.

Now here’s the nasty little secret that’s not being proclaimed loudly in the news- the 8.1% figure only reflects those who are receiving unemployment compensation. It doesn’t include those who are under-employed, as in working a part time or lower wage job out due to the shrinking market as well as those who have given up looking for work and are no longer getting unemployment compensation. Include these folks and the “true” unemployment rate jumps to around 15%. Not good. It’s at the point where just about everyone knows someone who has been impacted by layoffs, if not themselves.

The New Dollar Menu Grows

Company 3/6/2009 Closing Price Closing Price 1 Year Ago (3/6/2008)
American International Group: $0.35 $42.88
CitiGroup: $1.03 $21.17
General Motors: $1.45 $22.35
Bank of America: $3.14 $36.52
Alcoa: $5.22 $38.37
General Electric: $7.06 $32.86
Dell: $8.37 $19.43
American Express Company: $10.26 $41.29

Meanwhile the number failed banks going under FDIC continues to grow:

Bank Name Closing Date
Freedom Bank of Georgia, Commerce, GA 6-Mar-09
Security Savings Bank, Henderson, NV 27-Feb-09
Heritage Community Bank, Glenwood, IL 27-Feb-09
Silver Falls Bank, Silverton, OR 20-Feb-09
Pinnacle Bank of Oregon, Beaverton, OR 13-Feb-09
Corn Belt Bank and Trust Company, Pittsfield, IL 13-Feb-09
Riverside Bank of the Gulf Coast, Cape Coral, FL 13-Feb-09
Sherman County Bank, Loup City, NE 13-Feb-09
County Bank, Merced, CA 6-Feb-09
Alliance Bank, Culver City, CA 6-Feb-09
FirstBank Financial Services, McDonough, GA 6-Feb-09
Ocala National Bank, Ocala, FL 30-Jan-09
Suburban Federal Savings Bank, Crofton, MD 30-Jan-09
MagnetBank, Salt Lake City, UT 30-Jan-09
1st Centennial Bank, Redlands, CA 23-Jan-09
Bank of Clark County, Vancouver, WA 16-Jan-09
National Bank of Commerce, Berkeley, IL 16-Jan-09

That brings the failed bank count up to 17, in a little over 2 months into the new year. For comparisons, in 2008 there were a total of 25 banks that failed, and just 3 for the entire year of 2007.

I find it humorous that there are folks trying to blame Obama for this wreck even though he’s only been in office for about all of 6 weeks and the market was already well into free fall under Bush. You really have to wonder about people who think things can magically change overnight with a new presidency- as in if McCain were elected instead, the current situation would be drastically different and life would be rosy. These folks need to get a dose of common sense – we didn’t get here overnight, and no one should expect any quick fixes. The problem is too many people tend to ignore finances and have little understanding even now about what the problems are. Of course when the Fed Chief Bernanke continues to pump misinformation out like saying the economy may turn around next year when he really has no clue, it just makes it harder for people to get to the truth.