Robots will save the retired!

THOUGH, THEY WILL TAKE YOUR JOBS FIRST

Ageing societies are the most severe issues of our days. What will happen to the pension? What will happen to the retired? I could brush away this question since I am still young. Or could I? Drawing up some calculations: I am among those young people who have to take care twice as many retired people, than that retiree, who during their active working days could not save up enough money, even though they had to take care of even less retired people. Furthermore, I should also stop the ageing process by having twice as many children than the generations before me. And raising a child is not an easy endeavour. So far, it seems quite hopeless. Based on these facts, I will need the ‘pension’ even more because I will have even more struggle saving up for my retired years. Is there a way out of this downward spiral?

However, I do not worry. Elon Musk and his peers will produce the self-driving car in a fully automatized factory, and soon Baxter, the conveyor belt robot worker will join me, Amelia, the robot civil servant, Siri, the intelligent personal assistant and knowledge navigator. They are the present day embodiments/manifestations of robots and artificial intelligence. They and their peers will help increase the productivity of the members of the active social groups – if productivity can be linked to humans in the future since the economy and labour market will go through a significant transformation.

THE ECONOMIC CHANGE IS INEVITABLE

In the factors required for production – as we currently know it – and services, human labour will have a lesser role than capital. It means that the role of the population as an indicator will decrease in the classical production process because the manufacturing of a production unit will require less human labour.

Robots shall be seen as tools that help and change our work. The job of taxi drivers used to be of two major parts: they had to know the city and how to drive. Today, with the help of GPS, they only have to know the latter one and do not have to spend time getting to know the city; they do not get lost and work more efficiently.

With the decrease of required competencies for the job, even those people can start working, who previously could not memorize the whole road network of Budapest. This way, more people can enter this field, which leads to decreasing wages. On the other hand, a taxi driver with a GPS can transport more passengers, so their productivity per unit amount of work is higher, which would entitle them to higher compensation.

LOSERS AND WINNERS

For this reason, wages can be different in certain fields, but I think that, in general, professions with high added value and requiring a high level of expertise will experience hikes in real income because of the higher productivity. Ceteris paribus (in other words, all else unchanged) the technological advancements will result in a deflation because many people might lose their jobs – especially those in low-income groups, who spend the majority of their salaries – which leads to a decrease in consumption meaning a decline in demand, while improved efficiency, due to reduction in costs, leads to lower offer prices – and low interest rate environment can thrive in low inflation. Although many other factors affect inflation and interest rate levels. As my ‘Pension’ colleague mentioned in his presentation (regardless of the technological advancement), many countries that used to be considered as cheap producing nations, are running out of labour market reserves. So it is not entirely clear which inflation-affecting force will have the biggest impact in the near future.

THANK YOU ELON MUSK FOR TAKING OUR JOBS!

Following the earlier example, the number of taxi drivers could drop significantly in the next couple of years when self-driving cars become widespread. However, we must not forget that even though in the 1900s, 48 percent of Americans were working in agriculture, and today, their number is still around 2 percent. Such a rate of decrease in human resources in a factory could only be brought about by an almost total automatization. Unemployment is still relatively low in the United States because these people now have different, higher added value jobs. Robotization, though it wipes out jobs, does not mean that those masses who do not add anything to the economic production have to be regarded as inactive.

Commonly, it can be said that technological advancement, on one hand, is destructive in that sense it destroys jobs, on the other hand, it opens up opportunities for new professions and jobs to arise. A hundred years before, people probably did not know the majority of today’s jobs could exist.

Going back to the matter of ageing, there will be a dire need for professionals caring for the retired – of course, only until the appearance of robot carers. Today, robots taking care of us would seem rather odd. However, from a different approach, it is rather nice because we could live a fulfilling life even in our retired years without being in need of assistance from another person.

IT SEEMS EASY BUT IT IS NOT!

At a construction site in India, people started to dig a hole, while excavators were left in the shade. When the workers were asked why they did not use to machines they said: ‘This way everyone has work to do’. The only thing I do not understand is why did they use shovels instead of spoons. However, this example perfectly shows that there will always be against technological developments – just think about Luddites. Personal, political, and short-term interests will probably create obstacles to progress. However, these problems should not be downplayed. A technological advancement could even destroy families. The time when people could spend their lives in one job has passed. We have no other choice; humanity has to get used to the continuous re-training and constantly changing duties. It will not be easy.

‘Sometimes, you have to roll a hard six.’ – William Adama

Original date of Hungarian publication: October 06, 2017