Jobs, the AI revolution and climate change | Brussels Blog

Jobs, the AI revolution and climate change

Three threats to jobs and wages

1.AI revolution, 2. the gig economy & 3.climate change

1. The AI Revolution and machine learning

The most significant aspect of the AI revolution is machine learning as Jeremy Howard explained in his Ted Talk, The wonderful and terrifying implications of computers that can learn. If you are in a hurry, at least watch the bit at the end but here are some excerpts.

The Machine Learning Revolution is going to be very different from the Industrial Revolution, because the Machine Learning Revolution, it never settles down. The better computers get at intellectual activities, the more they can build better computers to be better at intellectual capabilities, so this is going to be a kind of change that the world has actually never experienced before…

In the last 25 years, as capital productivity has increased, labor productivity has been flat, in fact even a little bit down.

Computers right now can do the things that humans spend most of their time being paid to do, so now’s the time to start thinking about how we’re going to adjust our social structures and economic structures to be aware of this new reality.

2. Competition from workers on the other side of the world

In emerging economies, new technologies enable prospective employees to log into places of work on the other side of the world, carry out jobs ranging from coding to legal services, and so it is opening up western jobs markets as never before.

It means a greater talent pool and highly competitive pricing, but does it also mean a race to the bottom for terms of employment and wages?

BBC World Service: The Gig Economy and You

The “gig economy” is where incomes are earned or supplemented by trading individual goods and services online. This gets its name as a generalisation of the way bands get work in a series of ‘gig’s – temporary fixed, short periods of employment.  The World Wide Web makes it international, ignoring national boundaries.

3. Climate change and limits to growth

Greenhouse gas emissions are the main cause of climate change but economic production and consumption create emissions. If production and consumption are increased, emissions increase. Economic growth increases emissions.

It is possible to improve production so that it emits less greenhouse gasses for each unit of production. e.g. it is possible to change manufacturing techniques and energy generation so that making a car or building a house emits less greenhouse gasses than it did last year. This measure is called the carbon intensity of production. (“Carbon intensity” because greenhouse gasses are measured in relation to the main GHG, carbon dioxide.)

The rate of change of greenhouse gas emissions increases with the rate of economic growth. It decreases if carbon intensity is decreased.  The problem is that when the world has emitted a certain amount a limit is reached and climate disaster happens. To keep within this limit in the coming decades means decreasing emissions extremely fast – at a rate that cannot be achieved without decreasing output as well as its carbon intensity. We need to decrease carbon intensity, production and consumption. i.e. de-growth.

(See Is Green Growth a Fantasy? and Stop growth, redistribute wealth and try to save the planet)

Tackling climate needs redistribution

De-growth means less production and less output per worker. That means fewer jobs or decreased productivity. This further reduces the labour share of the value of production, adding to the effect of AI revolution. For workers in western economies, this will be compounded by the up-coming transnational ‘gig economy’. All three are forces that reduce the value of labour.

At the same time the rewards to owners of capital assets (e.g. robot, factories and land) will increase.

To avoid dangerous climate change in a civilised world we need everybody to share in the increasing rewards going to capital. i.e. redistribution.

(See The job apocalypse and climate change, Will low paid workers pay the price for saving the planet? and World Wide Carbon Fee and Dividend)

 

P.S. There are may claims the “green growth” is possible. A switch from polluting jobs (e.g. mining) to green jobs (e.g. installing and maintaining solar power) cuts carbon emissions, but on the scale of world and national economies this cannot be done fast enough. (See The carbon cost of achieving low carbon lifestyles.)