Experts have predicted the looming automation of everything, with machines replacing labor and putting half the population out of work. This forecast seems to follow from basic economic logic:
Economic growth is about getting more output from less input.
Labor is an input.
We are now devising powerful forms of automation, which will dilute our labor to homeopathic levels—especially in middle skill, blue-collar trades.
Therefore, much of the population will soon be jobless.
That inference is too simple. There’s disruption ahead, but other trends may fend off the job famine. Here’s one: As ever more goods become cheap commodities, the economic value of the human touch—of literal labor—goes up.
Starbucks provided early evidence that an automation apocalypse isn’t inevitable. Fifty years ago, no one predicted that denizens of the developed world would decide to spend far more on coffee as the costs to grow and ship coffee continued to drop. You can make a decent cup of coffee at home for 20 cents. Or wait an hour and get good coffee from the office Keurig for 50 cents. Or drink a bottomless cup with free half-and-half at your local diner for $1.50. Down the street, though, Starbucks baristas serve labor-intensive coffee experiences to a stream of customers for a lot more money.
Will these baristas be replaced by robots? I doubt it. There are already excellent machine-made lattes at airline clubs. Yet members buy $5 grande cappuccinos before they enter the club. Clearly, they are buying something more than mere coffee when they do this.
Another example: Forty years ago, who would have predicted that customers at burger joints would want to know the name of the rancher and farmer who supplied their burger and fries? For the previous half-century, small-operation farms were losing out to large industrial farms. The productivity of these farms came at a cost: Hundreds of thousands of smaller family farms failed. But we got more food at much lower prices and more time and resources for other pursuits.
Yet as the price of food dropped, the demand for costly, organic, locally grown products exploded, first as niche luxuries and then as more widely enjoyed indulgences. Necessity no longer compels most people to engage in farm labor. But such work has started to re-emerge on the edges of a diversifying market. Midsize farms are disappearing in favor of giant ones—but also of tiny, off-grid artisanal farms, which for now mostly function as side gigs. That may change. There is growing demand for microbrewed beers, grass-finished beef, pampered pork, free-range chickens, specialty cheeses, small-batch whiskey, urban gardens and farmers markets.
These trends aren’t limited to food and drinks. Nor are they at odds with technology. On the contrary, much of the market for quirky and handmade goods depends on high-tech networks and the platforms that host them.
Etsy, an online platform headquartered in gentrified Brooklyn, N.Y., has vastly expanded rather than destroyed the market for handcrafted and artisanal goods. It links small artisans to a global market—in 2016 there were 1.7 million sellers and some 28 million buyers. Etsy practically erases their startup costs as well. The platform gets 20 cents for every item listed as well as a 3.5% cut on transactions. In exchange, it connects the Spanish maker of a silver-plated “Moon Phase nose ring” to the 35 customers in Portland, Ore., who want it.
My bet is that such networked markets will grow, not shrink. Yes, 20 years from now, machines may handle most of the farming, trucking, driving, routine factory work and mining. Automation will give everyone much cheaper goods and more disposable income. And more of that income will be spent on labor-intensive goods and services.
The economy will be filled with artisanal goods and artisanal services. Butlers, chefs, builders, gardeners, midwives, nannies, personal assistants, tutors, tailors, athletic trainers and other bespoke laborers may become employees and consultants for the wealthier among us. Many others will be like today’s baristas—not rich, but not unemployed either.
Will bespoke labor replace every job lost to the maw of automation? Probably not. But labor won’t disappear. It will take on new forms in a vastly expanded and diversified market.
Dr. Richards is an assistant research professor in the Busch School of Business at The Catholic University of America and a senior fellow at the Discovery Institute. This article is adapted from his book, “The Human Advantage: The Future of American Work in an Age of Smart Machines.”
This article originally appeared in the Wall Street Journal, and appeared in the July 21, 2018, print edition as ‘The ‘Everything Handmade’ Trend Will Curb Job Losses.’
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