President Trump’s Election in 2016 redefined the political landscape of the United States and has had ripple effects affecting other developed nations around the globe. A lot of people on the left wonder how a person so unqualified and unfit for office could have been elected in the country which had just witnessed two terms of a relatively uncontroversial and liberal president. What changed over just four years?
It is often overlooked that the reason Donald Trump is the US president is that he turned rust belt states of Wisconsin, Michigan and Pennsylvania red in 2016. These states traditionally were Democratic strongholds. Their economy relies heavily on manufacturing and blue-collared workers tend to support unions and other labour rights that the Democrats champion. However, in 2016, Trump won these states by the narrowest of margins. Creation of manufacturing jobs was at an all-time low. Every other quarter, another automobile company would decide to relocate their plants to a third world country. People who had spent all their life perfecting one trade now suddenly found their services to be no longer required.
Candidate Trump recognised the discontentment amongst the people. He, being the brilliant marketer he is, summarised this complex issue into an easily consumable soundbite. “The Mexicans are coming in illegally and taking your jobs!” was a standard Trump rally utterance. “China is being so unfair to us on trade.” was another. It is very easy for people to blame immigrants and unfair trade practices for a loss in jobs. Trump promised to bring back these jobs and was elected. However, most of the American jobs lost in Manufacturing after 2010 were at the hands of Automation. Automation is intuitively appealing to a company. A robot will be able to do the work of various humans. It can work indefinitely, won’t need wages and other employee benefits and will commit lesser errors. The efficiency of the manufacturing chain increases manyfold.
Automation has succeeded in wiping away manufacturing jobs. Trump may use tariffs and subsidies to incentivise companies to not shift their plants from the US to 3rd world countries. However, it is merely a stop-gap measure. Manufacturing isn’t where automation is going to stop. With a 15 dollar minimum wage being a top Democratic initiative going into the 2020 elections, companies are eager to automate away low skilled jobs. Self-driving technology is going to be road-ready by 2025, according to most experts. Trucking is the most popular job in the majority of US states. One can only imagine the crisis when 3.5 million jobs vanish overnight. The retail sector is already in decline with Amazon and other e-commerce companies offering the same products more conveniently to the consumer. Companies are working on automating the hospitality industry too. With a heavy focus on renewable energy and decreasing dependency on non-renewables, coal miners are being laid off.
A solution proposed to prevent such mass unemployment is retraining camps. These programs generally focus on more future compatible skills, like coding. However, they have traditionally had a low success rate, with the best programs providing reemployment to thirty per cent of enrolled workers. Middle-aged blue-collared workers are not able to shift from an industry they spent most of their life perfecting to one which does not have any relation to their former trade. Some economists believe that fears regarding automation are exaggerated. “This fear that robots have eliminated jobs — this fear is not supported by the evidence so far,” the World Bank’s Chief Economist Pinelopi Koujianou Goldberg said in an interview. “This is the fourth industrial revolution, there have been three before, and in each case, we managed to survive so it’s not the case that machines eliminated humans,” Koujianou Goldberg said. “Eventually, we will adjust.”
Automation will allow for more creative and productive jobs. Jobs which require complex problem-solving, teamwork, reasoning and communication talents are those which won’t be easily automated away. However, there will be a transition period from our current economy to a more gig-based one with a person having to learn multiple skills throughout their life. For that transition period, the concept of a Universal Basic Income has been proposed. Universal Basic Income or UBI guarantees every adult citizen of a country a fixed stipend, as a fundamental right. UBI is proposed to be funded by a goods and services tax so that the benefits of automation reach every citizen of a country. UBI aims to ensure that during the transition from our current economy to the postmodern one, every citizen has the bare minimum funds needed to survive. It tries to recognise non-monetary work done by caregivers whose work is integral to the society but valued at zero on an income sheet. The framers of UBI believe that if the burden of earning is lightened, people will end up involving themselves in more creative activities.
Opponents of UBI argue that giving away money for free will disincentivise people from being productive members of society. UBI is too costly, and the inflation that will occur due to every person having more money in hand, as well as goods being taxed, will wipe out the value of UBI received, effectively rendering it useless. Moreover, UBI does not address a fundamental problem that comes with mass unemployment. Most people find meaning in their job. Everyone cannot be involved in creative work. One of the major challenges that will dominate the next few decades will be the impact of automation. Will the collective mindset around work and it providing meaning evolve to something which concedes a significant portion of the population being jobless? Will human ingenuity find a way to come up with more jobs like before, or are we in the final lap of a civilisation where everyone has to work?
By Harsh Mahajan