Is Artificial Intelligence the Solution to America’s Labor Shortage? | In focus
Widespread automation will exacerbate the division of economic classes.
“The pace of change seems irrepressible; new technologies will transform societies. All people can do is figure out how best to deal with it.” (Lant Pritchett. “People Over Robots: The Global Technology Before Automation”: Foreign Affairs March/April 2023)
It is common knowledge in America that there is a major labor shortage and millions of workers are needed. According to billionaires like Jeff Bezos, the solution is to automate trucks so they become self-driving using artificial intelligence (AI). Technology will solve the labor shortage.
This argument is a stupid idea.
The problem with this kind of thinking is twofold. First, we’re decades away from developing self-driving cars and trucks, if ever. Second, there are millions of truck drivers worldwide who would be willing to drive these trucks if only they were allowed to enter this country.
The average American truck driver wage is $23/hour driving long-haul semi-trucks. In the developing world, truck drivers earn about $4/hour. What’s keeping them from filling the US shortage are immigration laws restricting their entry? If companies like Amazon could hire overseas workers, even at higher wages, the technology destroying those jobs would be unnecessary. It would also help alleviate poverty worldwide.
This problem also applies to healthcare. According to a 2021 report by financial services firm Mercer, there will be a shortage of 660,000 home care assistants, laboratory technicians and nursing assistants by 2025.
Immigration policies “encourage a terrible misallocation of resources. In the world’s most productive economies, the capital and energy of corporate leaders (not to mention the time and talents of highly skilled scientists and engineers) is being channeled into the development of technologies that will minimize consumption of one of the planet’s most abundant resources : work.” Focusing on AI is a waste of money, while it also helps keep the poorest poor. (Pritschet)
The counter-argument is that economic immigration may take jobs away from Americans and create social tensions due to cultural differences. There is also a risk of these immigrants being exploited by greedy business owners.
Right, “but it’s a mistake to choose devices over people.” People should come before profit, especially when the cost of making AI is so high.
Some argue that emigration would lead to a “brain drain” in the country of origin. Pritchett replies, “There has never been any evidence that emigration in general has harmed a country’s prospects.”
“Many manual, non-routine tasks are difficult to automate or outsource because they require the direct physical presence of the worker, and hence these jobs remain in demand…” These jobs can be found in the food preparation industry, janitorial maintenance, personal health care and security.
Due to rising levels of education and falling fertility in the US, there have been labor shortages for these types of jobs. Data from the Bureau of Labor Statistics predicts that between 2021 and 2031, more than 5 million jobs will be needed for non-college-educated occupations.
The government has tremendous power to influence economic decisions based on the restrictions it places on companies. According to the author, “The wage gap is the largest politically induced price distortion in the world today (and probably in all of human history). Obstacles to migration create an artificial shortage of labor…. Necessity may be the mother of inventions, but false necessity is the mother of foolish inventions.”
When alcohol was banned in the 1920s, whole new illegal industries in alcohol production emerged. Bootleggers and rumrunners emerged to satisfy this need for alcohol – an example of stupid inventions.
The counter-argument is that increasing immigration will lower wages for native workers. Pritchett argues that this danger can be mitigated by the Earned Income Tax Credit, which can fully offset these losses by providing workers with tax deductions. “Automation is therefore not inevitable, but driven by the artificial shortage of workers.”
Pritchett concludes his article by arguing that “rich and democratic societies need to stop blindly chasing technological advances that economize on the very things that the world has in abundance.” People should be more important than machines. Artificial intelligence is a solution in search of a problem.
