At Davos, IBM Chief Predicts Artificial Intelligence Won’t Be a Job Killer

Wage stagnation is a real problem. It's a kind of vectorized unemployment where everyone in the middle class on down is partially unemployed through a combination of more part time work rather than full time, and stagnant wages. The broadness of the problem makes it seem like we have good employment numbers, but wage stagnation is a big problem, especially in contrast to the rise in cost of living, in particular housing.

Unemployment is a synthetic measure. A mom working 39 hour shifts at Walmart so she doesn't get benefits isn't the same as a cush office job that's rolling in benefits. When we look at post-industrial societies, we look at late stage job creation being problematic. There's a lot of Mcjobs, temp jobs, and contract jobs. Technically those people are employed, but its not sustainable for them.

Yes, the US has done well but its an exception for the most part due to the massive economy at work here and the relative lack of competition, until recently, from other regions. French youth unemployment hit 26% a few months ago. Spain and Greece are just as bad, if not worse. Jobs in many European economies are lifer jobs because if you leave, your chances of getting a new one is slim.

The real question is, when is the camel's back going to break. Another good career job replaced by a McJob thanks to automation won't change the unemployment stats, but it will make people unhappy. It will drive down the economy with less spending and other issues. In other words, wages matter, not just employment numbers.

I would not assume we are sitting pretty right now. This dam is going to break. Arguably, the surprise win of anti-automation, anti-liberal, anti-globalization, and anti-intellectual candidates in the UK and the USA are the first signs of a major fault.

I like the comparison to horses. Steam engines and trains threatened to replace horses in the mid 1800s. A lot of things that were previously done by horses were replaced with trains and steam engines.

Yet the horse population grew, and cities remained full of horses. There were countless transportation innovations in the 1800s, from canals to streetcars and omnibuses to bicycles. But the horse population kept growing and showed no signs of being threatened by this "automation". Whenever something took a horses job, there will always be other jobs that technology can't do yet, right?

Then the car was invented, and within 2 decades the horse population crashed. Suddenly the price of feeding and maintaining a horse was much higher than the alternative. There is no law of economics that says the supply and demand of a good can't fall below the cost of maintaining it. Or that wages can't fall below minimum, in our case.

Robotics has made incredible advancements over the past 50 years or more. They have taken over entire factories, doing countless routine tasks previously done by humans. But they are still very limited. They have 0 intelligence - they can't see, they can't learn. They can only perform a rote series of movements. So there is still tons of work available for humans.

But with recent advancements in machine learning, this is about to change. A robot will soon be able to be trained to flip burgers, or drive a car, or take a customer's order, etc, etc. I can not imagine any jobs that an average, unskilled human can do, that a machine won't soon be able to do. Maybe skilled professions will be protected - I can't imagine robots being able to program computers for awhile. But the vast majority of humans can not be trained to be computer programmers.