Are you talking to me?
Across the country, it’s quitting time. Hiring continues to sputter, with payrolls rising by only 199,000 across the United States. While the December Jobs Report shows that unemployment fell to just 3.9%, a more troubling statistic lurks beneath these results. A record number of people quit their jobs in 2021 – over 40 million, when you factor in the 4.5 million that clocked out in December. For the workers that remain, the nature of work – and the resolution to that restless nature – is transforming the job market.
For many employees – over 50 million, in fact – low hourly wages and scant benefits are the only option. (For perspective, consider that the US labor force is about 162 million in total). The US Private Sector Job Quality Index (JQI) shows that the quality of jobs has significantly declined in quality, as reported by Jack Kelly in Forbes. An increase in lower-level jobs, and a decrease in those willing to apply for them, is creating a powerful (and potentially troubling) decision matrix – tipping the scales in favor of automation, robotics and AI (artificial intelligence). A disinterested labor force, a proliferation of lousy jobs, and improvements in automation: these factors are creating a perfect storm for making smart machines. Is the economy tilted towards building the workforce it needs, because it can’t hire the workforce it wants?
In The Work of the Future: Building Better Jobs in an Age of Intelligent Machines, (Coming soon from MIT Press) there are two faces of technological change: task automation and new work creation. What happens when people don’t want to do the work that’s being created? Authors David Autor, David Mindell and Elizabeth Reynolds offer a sobering assessment: “The US has allowed traditional channels of worker voice to atrophy without fostering new institutions or buttressing existing ones. It has permitted the federal minimum wage to recede to near irrelevance.” With the disappearance of meaningful work, will our sense of identity and fulfillment also suffer? “Work is a way that we can learn, exercise our powers of perception, imagination and judgment, collaborate socially and make constructive social contributions,” writes MIT Advisory Board Member Josh Cohen. “Not simply a source of income.”
Global X, a $40 billion dollar investment firm with an appetite for automation, says that 2022 is a key turning point for robotics. The disruption in the supply chain – including the supply of labor – is setting up “a huge surge in spending on robotics and artificial intelligence,” says Jay Jacobs, Senior VP for the fund. “We think we’re going to be in the golden era of robotics adoption for the United States,” he tells CNBC. Global X’s Robotics and Artificial Intelligence ETF (an exhange-traded fund that focuses on bots in business) is up 140% since its 2016 launch. The 10-year growth forecast for industrial robots has more than doubled, from $16 billion to $37 billion, according to Jacobs.
Even with the prevalence of low-paying jobs, labor costs are rising. The laws of supply and demand are at work: reducing the labor supply increases the price of labor. The pains of the pandemic continue to stress the job market, from front-line healthcare workers to hospitality and beyond. Many workers are out sick, dealing with the onslaught of the Omicron variant – while everyone wonders how long it will be until this new wave subsides.
While unemployment may be low, the nature of the work hasn’t changed. Quantity is not the same as quality, and workers are seeking a greater quality of life. “Workers aren’t just quitting; they’re rethinking what they want out of work – and shifting their expectations about professional life,” writes Forbes editor, Jena McGregor.
Seems workers are hungry for other options. And so are employers.
Without a willing and compliant labor market, the trend towards automation is a business necessity. Consider an unmasked robot, with no childcare concerns and no need for rest: that robot has a skillset that’s attractive to many employers. Dataquest predicts the following trends for robotics in 2022, in an article outlining the “robot revolution”:
It was Jeff Goldblum (Dr. Malcolm) in Jurassic Park who said, “Nature finds a way.” From dinosaurs to the data-driven economy, the rules are the same. If people won’t do certain jobs, those jobs still need to get done. Nature, in this case, is the nature of capitalism. Capitalism finds a way, when certain resources are blocked, indisposed, or unwilling. While the search for personal freedom has led many to rethink what work really means, businesses around the globe are still working to get things done.
With or without human resources, the needs of society (and the demands of the marketplace) will continue to drive investment in automation, robotics and AI. In this golden age of worker defections, are we opening the door to the greater influence of machines? Maybe it’s only nature finding a way, given the state of the labor market – and the ongoing appetite for automated solutions.