Straight Talk from Al Jacobs
A CRISIS IN THE OFFING
At the risk of sounding overly dramatic, I must report
America appears to be on the road to a cataclysm, and nowhere is this more
evident than in California. The cause of this is the rapid pace by which
technology is automating many of the functions we humans traditionally performed,
but which are no longer required of us. As automation becomes prevalent in a
multitude of occupations, many of us will find ourselves without gainful employment
… along with the income accompanying it.
The sorts of jobs most people engage in for a livelihood are
routine, whether it requires the operation of a fork lift, the filing of
documents in an office or the assembly of parts on an auto. We’re now at point
where more and more of these occupations are relegated to machines. The benefit
to the employer is no wage to be paid; the detriment to the employee is no wage
to be received. Example: In the counties of Riverside and San Bernardino, known
as the Inland Empire, many multinational firms operate massive warehouse
facilities, some in excess of one million square feet. In an earlier time such
structures required hundreds of employees. Today the functions can be performed
with a small staff at an electronic console, remotely controlling all the operational
equipment.
Another example: If the driverless automobile becomes a reality,
when do driverless trucks fill the roads across the country? Take these facts
into consideration: There are 3.5 million truck drivers in the U.S., with
average annual salaries of $40,000. Add another 5.2 million employed in support
of the industry who don’t drive trucks. When you consider the many businesses
built around the trucking industry, such as motels and restaurants, you realize
how dependent our economy is on the persons who operate these vehicles.
Self-driving trucks will put millions of persons out of work. This is
particularly crucial, for truck driving is one of the few remaining trades to
provide middle class incomes to persons with no more than a high school
education.
A final comment: There will naturally be jobs which a
machine cannot perform, so the human hand and brain is still a necessity.
However, it’s quite likely those tasks not automated by the computer or the
robot will be shipped overseas to countries whose employees subsist on salaries
of three or fewer dollars per day, for once again technology will facilitate job
coordination at great distances. It seems clear an unemployment never before
experienced may await us in the not too distant future.
Al
Jacobs, a professional investor for nearly a half-
century, issues weekly
financial articles in which he
shares his financial
knowledge and experience.
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