The two main political parties in this country are about to face a challenge that will create a complete realignment as politicians are forced to choose between robots and people.
Vespasian ruled Rome from AD 69 to AD 79. The emperor was one of the first heads of state to encourage the development of art, science and technology. Vespasian was also one of the first heads of state to fear technology’s impact on workers. When an engineer offered a low-cost transportation machine for moving heavy columns to the capital, Vespasian paid the engineer handsomely for his invention, but decided not to use the machine, saying, “You must allow my poor hauliers to earn their bread.”
This was just the beginning of a long debate on technology and unemployment. Those who constantly rang the warning bells that technology would replace humanity have proven themselves wrong time and time again, as over the last 2,000 years our quality of life has increased with technological advancements and jobs have been plentiful. But like everything, it is true until it is not.
Indeed, 2,000 years after Vespasian worried about his hauliers, Uber launched the first commercial driverless cars in Pittsburgh with the support of the city’s Democratic mayor. While Pittsburgh is just a testing ground for Uber, the Google driverless car has already driven almost 2 million miles.
At the same time Uber launched its driverless car, Austin’s Democratic city council essentially banned Uber from doing business in the city.
The tale of Pittsburgh and Austin offers an early glimpse into the battle that is coming. The same political party embraced two extraordinarily contradictory polices in response to a similar opportunity/threat.
Since 2000 we have continued to see U.S. productivity rise, while at the same time employment has remained relatively flat. This has been driven by new and innovative technologies. Not surprisingly, over that same time, median wages have declined.
The new technologies are designed not to enhance workers’ capabilities but replace them altogether.
The reality is that the factors driving this trend are about to accelerate. Machine learning, big data and robotics are all separate technologies, but they are becoming interwoven and are feeding off each other.
These connected technologies are creating something different this time. First and foremost, the new technologies are designed not to enhance workers’ capabilities but replace them altogether. When the car replaced the horse it still needed a driver. But when the driverless car replaces the car, there will be no driver — and to top it off, the car will be manufactured by robotics.
Secondly, and perhaps more importantly, the skills required to outperform the machines are getting significantly greater. Throughout history, technology has continued to make obsolete specific jobs, but overall employment has grown as people have developed new skills that made them more productive. When machines took over the farm, those workers were able to be deployed in manufacturing with minimal training. This is no longer true, as technology will soon replace anything that is remotely repetitive and unskilled.
This does not bode well for low-skilled workers. This is why the bottom half of earners have seen their wages fall since 2000. (Globalization is the other reason, but more on that in a separate column.)
At the same time, these technologies provide great opportunities for those who are well-educated, with problem-solving and critical-thinking skills. These technological advancements will drive up earnings and wages while driving down costs. A net result will be a sustainably higher standard of living for those who possess the desired skills. This is particularly true in the United States. In addition, the United States has a history of quickly and efficiently capitalizing these types of companies. Google, Amazon, Apple (reborn) and Facebook are all less than two decades old and have literally created trillions of dollars of value. No other country has a company like these, let alone four.
So as Uber launches its driverless taxi service and Google continues down the path to bring us a completely autonomous car, the 3.4 million workers who earn their living in transportation are about to be unemployed (1.7 million truck drivers, 1.7 million taxi drivers). It is estimated that anywhere from 20-90 percent of unskilled workers will be automated out of the work force in the coming decades.
It is the impact of technology that is driving the undercurrents and climate of the political environment.
Depending on where you are on the education and skills ladder, you will see these events very differently.
Enter Bernie Sanders and Donald Trump. These populous figures learned how to tap into our populous anger without ever offering any real answers as to how to solve this problem. Bernie captured 43 percent of the Democratic primary vote with almost every part of the Democratic Party establishment against him. Unfortunately, Bernie never understood governments have less control than they once did, because people and capital are completely fluid around the globe and his solutions would have only accelerated the problems: Quickly doubling the minimum wage will create greater incentives to replace low-skilled workers with technology.
Trump’s anti-trade, anti-immigration and newly found Christian values propelled him to the party’s nomination with 45 percent of the Republican primary vote. While Trump offered immigrants as the scapegoats and trade as the devil, he offered little on policy other than the fact that he was the “only person” who could fix these problems.
While technology has not been at the forefront of the 2016 campaign, it is the impact of technology that is driving the undercurrents and climate of the political environment. It is clear that this will be the defining issue of the elections to come. Both parties are currently constructed of unstable coalitions. This issue will pit these different coalitions against each other. The Democratic Party will see labor (which will be destroyed by this trend) at odds with its party elites (which will benefit greatly from this trend). The rise of Trump shows how divided the Republican Party is already between the business community (which will benefit from this trend) and their working class (which will be hurt by this trend) and evangelical voters. In fact, both parties have split not along ideological lines, but educational lines.
In the Democratic Party, highly educated voters supported Clinton, while less-educated voters supported Sanders. There was a generational split in the Democratic Party, but this had more to do with the individual candidate and the fact that young voters could not support Clinton.
In the Republican Party, less-educated workers supported Trump, while more-educated voters supported anyone but Trump. There was also a gender split in the Republican Party, but this had more to do with Trump’s personality than anything else. There were also certainly well-educated Trump supporters who strongly and understandably wanted an outsider/business candidate.
Take away the individual personalities and the trends are quite striking.
The general election has also started to show the challenges that are coming. Clinton was the first Democrat in a generation to win college-educated voters, while Trump was the first Republican to lose them. At the same time, Trump has galvanized low-skill white workers who have been fleeing the Democratic Party since 2008. I suspect if Trump could get through an afternoon without insulting women and minority groups he would have galvanized low-skilled non-white workers, as well.
The political coalitions of the last 50 years are under great strain as technology is greatly changing who benefits from economic growth. The 2016 election offers us a glimpse into the future that Vespasian feared. As Pittsburgh and Austin have shown, it is still unclear how the parties will address these challenges. The real question, as the parties realign themselves, is who will be for the robots and who will be for the workers.