While the U. S. continues to lead the world in innovation relating to artificial intelligence (AI), CNN reports today China's announcement to overtake us via its planned investment of $150 billion over the next few years.

However, a nearly offhand remark in the story--on which the author doesn't expound--is this one:

Alibaba (BABA, Tech30) founder and chairman Jack Ma, currently China's richest man, thinks artificial intelligence will bring about a massive upheaval in society, with robots replacing many CEOs as well as less senior workers.

Cashiers at McDonalds we knew about, but CEOs, too?! Ma has offered prophecies as jarring before, telling media earlier this year that "in the next three decades, the world will experience far more pain than happiness."

But is he alone in his warnings? What could be the future impacts of AI to labor and to society in general? More to the point, if he's right, how should governments be planning now to combat disruption on the scale Ma suggests--and are they?

No, Ma isn't alone. In fact, it appears he is echoing Tesla and SpaceX CEO Elton Musk three years earlier, you saw, when Musk grimly opined that "AI is the greatest existential threat to humans."

Indeed, talk among tech leaders at January's World Economic Forum in Davos centered on anticipated "digital refugees" and accelerated income inequality wrought by "advances in AI that are beyond what we had expected," per Marc Benioff, chief executive of Salesforce.com. "If surplus is going to get created (by AI), I think we’ve got to talk about how the surplus is distributed,” suggested Microsoft chief executive Satya Nadella. By meeting's end, Silicon Valley was in agreement that governments might soon need to extend to citizens a Universal Basic Income (UBI), at least for the short term, and industry leaders were willing to help underwrite its costs.

In February, Tesla's Musk reiterated at the World Government Summit in Dubai that UBI would be "necessary". Attendees there, including Microsoft's Bill Gates, offered numerous ideas on how to fund it, ranging from a "robot tax" based on various machines' productivity (Gates) to higher rates of taxation on the "super profits" the industry anticipates (the growing consensus of other attendees).

The Future Development blog at Brooking's site offers some reasons in support of UBI. Bloomberg, however, is skeptical, particularly with regard to how little a domestic UBI paid to our citizens could conceivably be of help to our brothers and sisters in developing nations. After all, in our increasingly global economy, their more fragile and fledgling national economies would share in any distress imposed on our own. Should developed nations then support largely undeveloped ones through the travail?

The U.S., at least, doesn't plan to, nor does it presently plan to extend UBI benefits to its own citizens. Although the Obama administration acknowledged in its December 2016 report Artificial Intelligence,
Automation, and the Economy
that the threat is quite real, it was the specific recommendation then of the Council of Economic Advisors that federal government reject any UBI plan in favor of extending transitional aid of other sorts already in existence but requiring strengthening (page 40). In addition to more proactive measures, the administration also proposed then that federal and state governments together prepare to extend unemployment benefits for up to 18 months to "dampen the effects of mass layoffs on local economies" (starting page 37).

What recommendations the new administration may make, though, are as yet unknown.

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Tamara Shepherd's picture

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My apologies to any passers-by who may have tried to reference that Obama administration report of December 2016. As to the report's recommendations for transitional aid, I had to correct the page numbers I'd cited in my original post.

It is on page 37 that detailed recommendations for these reactive measures begin (while recommendations for more proactive measures precede that section of the text).

Tamara Shepherd's picture

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Two weeks back in Fortune magazine:


Imagine that a robot has stolen your job and pushed you into a lower-wage occupation, if not out of the workforce altogether. Imagine that companies, choosing between keeping costly human workers or replacing them with less expensive software and machines, have made the most profitable decision. Imagine that you feel a little desperate.

For a growing number of business leaders and economists, this future no longer seems hypothetical. A University of Oxford study from 2013 estimated that 47% of U.S. jobs may be at risk within the next two decades because of advances in artificial intelligence and automation. Last year, the White House Council of Economic Advisers estimated that workers making below $20 an hour would have an 83% chance of losing their jobs to robots in that span. Those odds dropped as workers’ education and income levels grew. But as software gets smarter, that too is subject to change: Companies will eliminate even jobs that were long considered immune from technological displacement.

Why Free Money For Everyone is Silicon Valley's Next Big Idea

(Bonus video with Y Combinator CEO Sam Altman, Mark Zuckerberg, Michael Dell, others)

Tamara Shepherd's picture

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Yesterday in the Los Angeles Times (Op-Ed):


(T)hey understand the basic math undermining their long-term business plans: If they automate all the jobs, who will be left to buy their services? Even the data that companies such as Google mine from our otherwise free online activities would be worthless if we had no money to spend. The penniless have no consumer behavior to exploit.

While it’s gratifying to hear a multi-billionaire like Facebook founder Mark Zuckerberg echo the words in my books as he calls on Harvard’s graduating class to explore UBI strategies, in light of the rest of Facebook’s priorities and behavior, his request comes off as utterly clueless, and more than a little late. Much like his vow to donate 99% of his shares to charity, Zuckerberg’s interest in UBI seems less the result of a comprehensive economic vision than a guilt-inspired effort to compensate for the social impact of his business. (If you have to donate 99% of your winnings, perhaps you took too much to begin with?)

I’d have an easier time accepting Zuckerberg’s proposal at face value if his company weren’t trying so hard to avoid paying taxes on its massive profits. Where is UBI supposed to come from, after all, if not the profits that Silicon Valley companies have made by cutting out human labor in the first place?

Silicon Valley's push for universal basic income is — surprise! — totally self-serving

Tamara Shepherd's picture

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Two more stories from Business Insider last month...

First, more on Y Combinator CEO Sam Altman's pilot UBI program now underway with 100 households in Oakland, CA, here: The inside story of one man's mission to give Americans unconditional free money

It's the first story I've spotted in which Altman actually comes clean with his interviewer:


"I am almost sure that in a world of basic income, [income and wealth inequality] will get a lot, lot worse," he says.

While some people will coast by, happy to live on their minimum payments each month, others will retain their entrepreneurial spirit and build fortunes. "We need to be ready for a world with trillionaires in it, and that's always going to feel deeply unfair. It feels unfair to me. But to drive society forward, you've got to let that happen."

(Although it seems to me that "a world of basic income" wouldn't fuel income inequality any more than would "a world of patched together social supports of indefinite duration?" Either choice is undesirable?)

Next, the political problem in adopting UBI, namely that it entails reaching agreement on redefining what constitutes "work," here: The biggest obstacle to universal basic income has nothing to do with money

Also note this:

Earlier this week, the UK's Labour party even said that it is "closely looking" at UBI as an idea, with shadow chancellor John McDonnell saying it "might be an idea whose time has come."

More and more cities are rolling out experiments with a basic income, with Utrecht in the Netherlands experimenting, Finland planning a study next year, and, despite the rejection of a nationwide UBI scheme, the Swiss city of Lausanne could also give the idea a go.

cafkia's picture

I don't have the time right

I don't have the time right now for an extended reply that few will read but I do want to throw this in the mix for the doubters out there.

A.I. will not be watching porn. It will not be looking at cat videos or stalking its ex-girlfriend. It will not be overly concerned with what the weather will be this weekend or what hotel rates are in Myrtle Beach. All it will focus on is the task at hand. Think of it as you at your absolute most productive except that it is like that 24/7. Then think about the fact that it will soon get better. Then better again.

Among the tasks A.I. will be given will be the task to improve the A.I. Once real honest-to-Gawd A.I. is in place, the rate of improvement will be difficult for humans to comprehend. So even if it takes 10 years, and it definitely will not, for that first meaningful A.I. to hit the scene, in 15 years you will be obseleted. No matter what you do for a living.

My guess is that another task the A.I. will be given is figuring out something for humans to do that does not involve the wholesale killing of them by the A.I. or each other. Twenty years from now is pretty much guaranteed to look as different from now as now does from 100 years ago. And the rate of change will still be increasing.

R. Neal's picture

Heard a couple of these TED

Heard a couple of these TED talks recently whle on a road trip. Some experts say embrace the future. Others say fear for your life.

(link...)

Tamara Shepherd's picture

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From my above post Saturday, 12:43 a.m., linking a Fortune magazine article to have run two weeks ago:


A University of Oxford study from 2013 estimated that 47% of U.S. jobs may be at risk within the next two decades because of advances in artificial intelligence and automation. Last year, the White House Council of Economic Advisers estimated that workers making below $20 an hour would have an 83% chance of losing their jobs to robots in that span.

That mention that people earning under $20 per hour have "an 83% chance of losing their jobs" (over the next 20 years) is included in the White House report I linked in my original post, on page 22.

I tried last night to find some indication online of how many jobs that would be, exactly, in this "first wave." An undated news item from CNN Money citing BLS stats from 2013 offered the closest estimate I could find. The BLS reported that of the 130 million jobs Americans then held, 81 million of them (62%) fall in this category. So the 83% of those that are expected to disappear translates into over 67 million jobs.

Interestingly, when I next began poking about the BLS site, I came across a mention that the BLS ceased tracking mass layoff data as of June, 2013.

Tamara Shepherd's picture

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Robert Reich, former Secretary of Labor in the Clinton Administration:
Why We'll Need a Universal Basic Income (September 2016)

Tamara Shepherd's picture

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All in one spot, these are the three reports on AI released by the Obama administration:

PREPARING FOR THE FUTURE OF ARTIFICIAL INTELLIGENCE
(October 2016)
58 pages

THE NATIONAL ARTIFICIAL INTELLIGENCE RESEARCH AND DEVELOPMENT STRATEGIC PLAN
(October 2016)
(48 pages)

...and, as linked previously in my original post...

ARTIFICIAL INTELLIGENCE, AUTOMATION, AND THE ECONOMY
(December 2016)
(48 pages)

Tamara Shepherd's picture

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Last month in The New Yorker, The Case for Free Money--Why don't we have a universal basic income?


The most popular social-welfare programs in the U.S. all seemed utopian at first. Until the nineteen-twenties, no state in the union offered any kind of old-age pension; by 1935, we had Social Security. Guaranteed health care for seniors was attacked as unworkable and socialist; now Medicare is uncontroversial. If the U.B.I. comes to be seen as a kind of insurance against a radically changing job market, rather than simply as a handout, the politics around it will change. When this happens, it’s easy to imagine a basic income going overnight from completely improbable to totally necessary.

Tamara Shepherd's picture

The "retail apocalypse"

I opened my mailbox this morning to more automation gloom and doom, namely Time magazine's story this week entitled America's Malls and Department Stores are Dying Off (hard copy edition entitled The Death and Life of the Shopping Mall), the culprit of course being e-commerce.

Some quick takeaways in what analysts are calling "the retail apocalypse" are:

--2007 marked the first year (since the 1950's) in which no new malls were built
--For the period 2010-2013 mall visits declined 50%, concurrent with the rising popularity of e-commerce
--2017 has already seen 5,300 retail closings with more than 8,600 anticipated by year's end; nine national retail chains have filed for bankruptcy just through April *
--2017 also marks 20 years since Amazon's IPO; its stock price hit $1,024 this year, up 5,689% since its IPO
--Credit Suisse estimates that among the nation's 1,100 remaining malls, a quarter are at risk of closing in the next five years

The 42 videos comprising filmmaker Dan Bell's Dead Mall Series on YouTube tell the story--except that they fail to relate to viewers just how many jobs have disappeared and failed to reappear as retail's presence has shifted from brick and mortar buildings to online.

The Time magazine story offer readers just a clue, reporting that over the last 15 years department stores (which obviously are not the totality of retail stores) have lost 448,000 jobs while the e-commerce sector has created just 178,000 jobs. That translates into a net loss of 270,000 jobs just among department stores.

Business Insider reported in April of this year (The retail apocalypse is creating a 'slow-rolling crisis' that is rippling through the US economy) that retail had shed 89,000 jobs in the preceding six months --which, for perspective, is more jobs than ever existed nationally in the U. S. coal industry. While the article doesn't indicate how many jobs the e-commerce sector created in that same period, Mark Cohen, director of retail studies at Columbia Business School, observes that "e-commerce warehouses employ people on a much more limited scale than retail stores, since the warehouses are increasingly automated."

It appears retailers' "front end" operations will become increasingly automated, too, according to Fortune magazine just a couple months back (Nearly Half of All Retail Jobs Could Be Lost to Automation Within 10 Years). Look what Amazon has up its sleeve:


Amazon, for instance, is developing a convenience store format called Amazon Go that has no cashiers. The plan is for sensors and intelligent vision to automatically detect what customers have in their carts and then bill them when they walk out the door.

The Fortune story cites a recent study by Cornerstone Capital Group that concludes automation of this sort will likely result in the loss of 6.5 to 7 million jobs in retail over the next ten years.

I do wish the BLS had continued to track and report mass layoffs since 2013. At least it would be easier to see what's going on.

Footnote:
* Business Insider reported in April 2017('The dominoes are starting to fall': Retailers are going bankrupt at a staggering rate) that the nine retail chains to have already filed for bankruptcy at that point were Payless ShoeSource, hhgregg, The Limited, RadioShack, BCBG, Wet Seal, Gormans, Eastern Outfitters, and Gander Mountain.

Tamara Shepherd's picture

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Hmmm. Through the month of June, Investopedia says (2017: The Year of Retail Bankruptcies) add Gymboree to that list of this year's bankruptcies to date.

Investopedia also says that in June Fitch Ratings published its Loans of Concern list — a list of retailers which is considered to be at risk of default within the next 12 months — which included Sears, Claire's Stores, Nine West, 99 Cent Stores, J. Crew, True Religion Apparel, Charlotte Russe, Charming Charlie, NYDJ Apparels, and Vince.

Finally, they report that S&P Global Ratings has downgraded Macy's (BBB-), Neiman Marcus (CCC+), and Charlotte Russe (CCC+), all three of whom could also be "heading down the bankruptcy road."

Tamara Shepherd's picture

Stephen Hawking

In The Guardian (December 2016), Stephen Hawking: This is the most dangerous time for our planet.

Concerning recent votes supportive of Brexit and Donald Trump:

The concerns underlying these votes about the economic consequences of globalisation and accelerating technological change are absolutely understandable. The automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.

This in turn will accelerate the already widening economic inequality around the world. The internet and the platforms that it makes possible allow very small groups of individuals to make enormous profits while employing very few people. This is inevitable, it is progress, but it is also socially destructive.

We need to put this alongside the financial crash, which brought home to people that a very few individuals working in the financial sector can accrue huge rewards and that the rest of us underwrite that success and pick up the bill when their greed leads us astray. So taken together we are living in a world of widening, not diminishing, financial inequality, in which many people can see not just their standard of living, but their ability to earn a living at all, disappearing. It is no wonder then that they are searching for a new deal, which Trump and Brexit might have appeared to represent.

...

With not only jobs but entire industries disappearing, we must help people to retrain for a new world and support them financially while they do so.

You must read the whole column. Excellent analysis.

Tamara Shepherd's picture

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From CEB Global, World Bank President: Automation Threatens 77% of Chinese Jobs

(And 69% of India's, 85% of Ethiopia's.)

Tamara Shepherd's picture

The "retail apocalypse" (Part 2, No Humans Required)

(Cross-posted from "Amazon acquiring Whole Foods")

From the 2016 World Economic Forum, Shaping the Future of Retail for Consumer Industries (32 pages)

Page 6:

Impact of new technologies on the workforce:
Emerging technologies will drive efficiencies in store
labour and long-haul trucking, among others. This
increased productivity will likely lead to job losses and
change the nature of the industry’s workforce. As the
retail workforce evolves, industry leaders and policymakers
have to focus on reskilling the workforce,
developing partnerships with educational institutions
and developing new social contracts or benefits for the
workforce of the future
.

Can you say "universal basic income?"

Page 12:

Chart depicting "Current readiness levels of disruptive technologies and key enablers (AI, machine learning, robotics, etc.) to reach full readiness" indicates 5 of 8 disruptions are 2-5 years away, remaining 3 of 8 disruptions are 6-10 years away.

Page 15:

A new frontline workforce.
Many of retail’s traditional human interactions will be taken
care of by a digital workforce.

Anyway, you get the picture. At only 32 pages, just flip through it. Amazon's Jeff Bezos was the darling of the Forum's retail session.

(The report cites 15 million Americans currently employed in retail.)

Tamara Shepherd's picture

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(Cross-posted from "Amazon acquiring Whole Foods")

Per Pew Research (September 2016), retail employs over 10% of the U.S. workforce.

Tamara Shepherd's picture

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I'm finding conflicting info online about retail chains' bankruptcies to date in 2017...

Although that count of 10 national chains above included Payless and The Limited, this report from the National Review (dated today) says both are still on the "watch list?"

However, National Review says youth apparel chain Rue 21 is still on the watch list, too, while multiple sources (including CNN Money, USA Today, and Reuters) say the chain filed Chapter 11 back in May and continues as an online presence only.

New on National Review's "watch list" are CVS, Chico's, American Eagle, Office Depot, The Children's Place, and Finish Line.

No matter the up-to-the-minute count, "bloodbath" is the repeated descriptor I'm seeing in news articles. If the industry had shed 89,000 jobs as of April (per a link I shared somewhere above), surely hundreds of thousands will have lost their jobs by year-end.

EDIT: Retail Dive, an apparent trade publication (?), pegs bankruptcies to date of national chains at 15 and itemizes them (The running list of retail apocalypse victims in 2017). An editorial note says the page has been/will be updated throughout the year.

Tamara Shepherd's picture

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This week in Fortune magazine, Robots Are Moving in on E-commerce Packing.

Some of them are already inching into service. A subsidiary of robotics company Kuka sold its first picking robot in the U.S. to an unnamed retailer early this year, and the startup RightHand Robotics is testing its picking robots at a distribution center of the retailer Hudson’s Bay.

But experts speaking to the Journal say full commercialization of automated picking is at least a year away. Amazon, the 800-pound gorilla of e-commerce, is still funding research and competitions to develop the technology further.

An unnamed analyst who spoke with the WSJ on the topic (this story first appeared there) said the technology could cut labor costs by about 20%.

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