Commentary: The false fight over job loss
Let’s talk about pizza, shall we? A truly historic and transformative moment occurred in Cincinnati, Ohio early this month that changes the way college students can satisfy their late night munchies. Xavier University installed the nation’s first Pizza ATM. It’s open 24 hours a day, seven days a week and serves up fresh, restaurant-quality pizza cooked in minutes. The school’s dining service announced the occasion with a Tweet that reads, “One small step for pepperoni, one giant leap for pizzakind.”
[quote-from-article]The news got me thinking about pizza all day and about what this “leap” would have meant to my old part-time job in College Park, Md., as a starving student and for current jobs around the country. The Pizza ATM is not just some ordinary vending machine. It is the epitome of automation disrupting the customer service business model.
Only one employee is needed to stock the machine with about 70 pizzas. The robot takes care of the rest — spreading the toppings, cooking it, boxing it and delivering the pie on-demand in the lobby of a residence hall. My old job at Dominos delivering pies would have been obsolete if the Pizza ATM existed back then. You can bet there is some kid at Xavier crossing “pizza delivery” off his list of part-time job prospects for some extra cash.
The last thing I want to do is spoil the excitement over innovation that increases productivity and transforms pizza access, but let’s think about it more in the context of automation’s rapidly growing impact on jobs in this country. We have been severely distracted over the last year by political rhetoric from presidential candidates ranting about how trade and globalization are killing jobs. They never mention the bigger cause — automation.
Just look at the most recent example of automation’s pending impact. Uber amassed a million drivers over the last few years. But now the company is launching a fleet of fully automated, driverless cars. They plan to “wean” customers off of cars with drivers. Just as Innovation abruptly started phasing out traditional taxi service, before policy makers could even wrap their heads around it, automation simultaneously began phasing out those very same jobs.
You think this stops with Uber? The job category with the highest number of workers, according to the Bureau of Labor Statistics, is “Driver.” Think about that — there is a movement toward driverless cars that threatens to wipe out the biggest sector of the service economy. Tell me where trade or China have anything to do with that.
With their economic speeches in Detroit, both Hillary Clinton and Donald Trump tried to appeal to the heart of the working class. They needed a villain to politicize the loss of good paying jobs in America so they picked trade and globalization as an easy scapegoat. Those are prime targets for candidates trying to make it sound like they will have a solution to bring jobs back. But of course they don’t because it’s a false choice. As David Ignatius writes in The Washington Post, “the country is having the wrong economic debate this year.”
“Make trade work for us, not against us,” Clinton said. Trump raised the stakes saying, “Our politicians took away from the people their means of making a living and supporting their families.”
There is nothing wrong with working to improve trade agreements but don’t believe candidates when they say tearing them up or withdrawing from the global economy will somehow bring jobs back to this country. It won’t, certainly not the manufacturing jobs they’re talking about anyway. Just because both sides are saying it, doesn’t make it true.
The best data points I have seen used to demonstrate this is from the Federal Reserve and Bureau of Labor Statistics. They show how, since the end of the recession in 2009, manufacturing output is up by more than 20%. And yet — this is key — the number of manufacturing employees is up by just 5%. We are producing a heck of a lot more with fewer people. The difference is manufacturing companies are using robots, a main form of automation. Other industries are not far behind.
Right now, Clinton and Trump have the biggest platform available to address automation’s impact on jobs (and how Americans train for jobs) but they are ignoring it. President Obama didn’t. In fact, his administration sent a warning to Congress a couple years ago in its Annual Report of the Council of Economic Advisors.
The report explained how the leveraging of automation had accelerated the displacement of workers from jobs. According to White House economists, there is an 83% chance workers earning less than $20 per hour will lose their jobs to automation and a 31% chance for wage earners who receive up to $40. The probability plummets to about four percent for people who make more than $40.
The biggest impact of automation in manufacturing, retail, food service and other industries is on the most disadvantaged members of society — poor, unskilled, youth or previously incarcerated workers in search of opportunities to join the middle class. People who do not have the right skills to get a job in an age of rapidly increasing automation will not be able to pay for our products let alone work for our stores.
It would be foolish and unrealistic to make automation the villain in the jobs debate. The impact to our service models cannot be ignored. Retail and restaurants have been places of opportunity for meaningful work and fair wages. As economic forces and automation force jobs to disappear for tens of millions of Americans, we must lead a conversation that produces solutions for preparing a new generation of workers for the global economy they will inherit.
Both major candidates are doing the country a grave disservice by conning Americans into thinking trade deals and offshoring are the primary culprits for an increasingly disrupted workforce. They are contributing factors, no doubt. But most of those jobs are never coming back because innovation and technology are eliminating them — like free pizzas at a frat house.
Our elected leaders are chasing “solutions” they know don’t exist and as a result, they are pandering to ignorance and fear. Real solutions to these challenges will only emerge when we the people have the political courage to have a real conversation about them. An entire segment of our workforce depends on it.
Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making. Align specializes in service sector industries.
