by Thomas Klikauer and Meg Young
Most people in the so-called advanced world lives, as it seems, part of their daily existence with the Internet, smart phones, smart TVs, email, Twitter, YouTube, logging in to a company’s website where we are employed to be remote-controlled, etc.
Yet, outside of work and sometimes even while being online for work, plenty of people also spend ample time engaged with online platforms. Euphemistically, they are called social media. In reality, they are run by very powerful multi-national, profit-making, and all too often “no tax”- paying corporations.
The advent of the Internet and having recently been turbo-charged by the Coronavirus pandemic, has transformed the way we work. It also changed the way we interact with co-workers – sometimes, as far afield as, half around the world. Yet, the next step is already on the way.
This step occurs when digital technologies are starting to move off-screen and becoming integrated into the physical world that surrounds us. These are known as the Internet of Things (IoT) and Industry 4.0. It already includes industrial robotics, self-driving cars and trucks, intelligent cancer-screening machines, and the like. Barely a month ago, a Mercedes S Class’ car can now drive itself on Germany’s infamous Autobahn automatically.
According to some experts – self-appointed and otherwise – human beings would be largely leftovers in an automated future. On this, there are truly wild predictions about massive job losses because of automation. Some suggest that up to 45 million Americans or about 1/4 of the USA’s entire workforce, might lose their jobs to automation by the year 2030. A few years ago (2017), the suggestion was just 39 million.
Historically, technology has always replaced workers ever since capitalism made an appearance. Yet, other reasons have also contributed to job losses like capitalism’s rather frequent economic downturns and habitually re-occurring crises like, for example, the Global Financial Crisis of 2008ff.
Despite the ideology of never ending growth – infinite growth in a finite world! – even some economists slowly start to realize that this is nonsense. Yet, during the period after World War II, many OECD countries saw the actual rate of labor-productivity slowing down – not speeding up. Robert Brenner, for example, calls this the long downturn – an inevitability in capitalism. Combine this with outsourcing and the oversupply of consumer goods (market saturation), neoliberal wage stagnation, etc., unemployment is the result. Beyond that, many know that capitalism always creates unemployment.
Automation certainly contributes to this. Many so-called future of work experts present us with images of a world of work defined by glossy newly automated factories and even Ping Pong playing robots. This is contrasted with crumbling public infrastructures – often the result of decades of neoliberalism. The implicit TINA (there is no alternative) threat is, unless you subscribe to automation, there will be deindustrialized regions of economic decline, desolate workers, and grossly underpaid people who are part of the precordia – just a tick above Marx’s Lumpenproletariat. These will be places and entire regions of utter mass unemployment and places where corporations refuse to invest.
With automation, some investments might fly into a so-called lights out manufacturing which are fully automated mini-factories, or manufacturing processes that no longer require any sort of human input and can therefore operate in total darkness. In the future of the food industry, they are known as dark kitchen.
Much of the debate on automation centers on four key issues: a) workers have already been replaced by automated machines; b) this will lead to a largely automated society; c) automation brings the long-awaited emancipation from enslaving and grinding drudgery; and, d) the most likely solution to automation’s much anticipated societal rapture is the introduction of a Universal Basic Income which, in its most optimistic variation might even get us to Aaron Bastani’s fully automated luxury communism.
Much of this is urgently needed given that labor’s share of income in the seven top economies (G7) has fallen from roughly 70% to today’s 60% since the onslaught of neoliberalism (1980s). In other words, the rich got richer, while the income of the rest has stagnated or workers simply got poorer. During the four decades of neoliberalism (1980-2022), the service industry has absorbed roughly 74% of all workers in high-income countries made redundant because of automation. Once OECD countries enter into service-sector automation, more workers will be pushed out of work.
Yet, in the history of capitalism, automation remains all but one issue. Traditionally, many waves of deindustrialization have often found their roots not so much in technology and automation but in capitalism itself, and its pathological capacity to frequently create market overcapacities for mass- manufactured goods.
Since many years and in particular since the last two decades, there have been several waves of automation. These waves of automation are often measured by looking at industrial robots per thousand workers. It indicated the number of robots compared to workers employed in the manufacturing industry.
The result shows that even the most robot-using country – which has been South Korea for a long time – uses just 63 robots per 1,000 workers. In technologically advanced Germany, the number is merely 31; and in high-tech Japan, it is 30. Yet, these countries have been on the road towards full automation for a long time. In the USA, the number was 19 while in the UK it was just 7 (2016). By 2019, these numbers had all gone up but not by much.
At the same time, the share of workers in manufacturing was significant – albeit declining: South Korea and Germany: 17%, and Japan 15% compared to the USA’s and the UK’s 8%. Still, when seen from the standpoint of worldwide competition, a high degree of robotization appears to translate into international competitiveness.
Yet, its accompanying pathologies are not just a result of automation but are more likely to come because of four decades of neoliberalism turbo-charged by its staunch anti-unionism, anti-labor regulation – framed as deregulation – privatization, wage stagnation, the creation of the precariat, and a separation of productivity from wages.
In line with the neoliberal ideology that began to be introduced during the 1980s, many neoliberal governments started to reduce labor market protections while, simultaneously, also scaling back unemployment benefits in one of neoliberalism’s favorite: punish the poor for being poor and blame them for being poor.
At the same time, what used to be called active labor market policy (ALMP) has all but been annihilated. It has been whipped off the public debate by what a recent book calls media capitalism – capitalism secured by an overarching ideology powerfully transmitted by corporate media.
Today, and this is before the Coronavirus pandemic, OECD countries spend a meager 0.3% of their GDP on ALMP. Compare this to the 2.5% of GDP that is spent on the army. In other words, we live in countries that are overflowing with the most advanced and expensive killing machines while our unemployed get basically nothing or worse – being punished for being unemployed. Corporate media like to tell everyone that it was their own choice to be unemployed or poor – they simply made the wrong choice.
Favorable for capitalism, and this since the days of Marx, is the fact that much of this including automation creates capitalism’s industrial reserve army. These are workers pushed below the average normal level of income. They are exposed to low-quality jobs. Plenty of workers are also on zero-hours and what Germans call mini-jobs. These workers experience worse than average working conditions and outright despotism in the workplace.
One of the keys to understand the success of neoliberalism and the reason for being such a favored ideology for capitalism, the business class, and adjacent media, is this: since neoliberalism or roughly between 1974 and 2019, unemployment rates were on average 30% higher than they were between the years of the social-democratic compromise between big capital and big labor (1948 and 1973).
In short, social-democratic regulation eases unemployment. Neoliberalism creates unemployment. Much of this came because of a much lower rate of job creation during the years of neoliberalism even though the apostles of neoliberalism like to claim the very opposite.
But neoliberalism did not stop there. Together with outsourcing and automation, neoliberalism also destroyed huge junks of middle-wage jobs. Instantaneously, neoliberalism also created ever more polarized employment opportunities splitting the working class in high- vs. low-wage worker.
This is exactly the outcome predicted by the demagogues of neoliberalism. When the free market holds sway in the labor market – where actually nothing is for sale! – market polarization will occur. Yet, largely increasing the automation of routine manufacturing jobs and the resulting push of workers into the service industry and middle and higher managerial positions has other consequences too. It has created a race between – ever more expansive – college and university training and the machine, i.e. automation.
Even college-educated workers increasingly face being pushed into precarity under neoliberalism. Between neoliberalism’s prime years (1985-2013), the share of precarious employment rose from 21% to 34% in France; from 25% to 39% in Germany; from 29% to 40% in Italy; and from 30% to 34% in the UK. Worse, 60%t of jobs created in OECD countries in the 1990s and 2000s were insecure non-standard jobs – the rise of job insecurity and the precariat.
Neoliberalism basically means that instead of researchers, tennis instructors, and Michelin chefs, neoliberal work means side-street sellers, rafts of domestic servants, cart vendors, faked self-employment, Uber drivers, fast-food delivery riders, the Mechanical Turk, and Walmart shelf-stackers.
Unless stopped, the continuation of neoliberalism with all its pathological trimmings is virtually assured. Stopping neoliberalism in its inhuman tracks can be achieved through a new form of collective political action dedicated to something like democratic eco-socialism. This will bring us closer to a world with no bosses with a New Economy for a Better World. The late Erik Olin Wright has outlined how this can be achieved.
It will continue until we have achieved global ecocide. Neoliberalism will carry on with business as usual and that includes automation until the Uninhabitable Earth is achieved.
What we are likely to see is the maintenance of capitalism’s overcapacity in markets for agriculture and manufacturing goods. Capitalism’s frequent crisis, outsourcing, off-shoring, and the persistence of automation will continue to force many workers out of manufacturing (first) and the service industry (soon).
Yet, in some countries, the service industry will see their share of global employment rising from roughly 50% (in 2020) to 70%-80% by the year 2050s. This comes on top of the fact that rates of economic growth will remain low as environmental vandalism continues despite – or perhaps because of – blah-blah-blah festivals like COP26, etc.
At the same time, the service sector will be able to soak up what automation writers call the losers of automation. Simultaneously, wage stagnation, the precariat, income inequalities, and environmental vandalism will lead the world further and further into neoliberalism’s apocalypse of global warming and the 6th mass extinction – of which, we will all be a part of.
Thomas Klikauer has 670 publications including a book on Managerialism and a textbook on human resource management.
Meg Young is a professional number cruncher and Pomeranian lover who enjoys good books, foreign films and music.
Originally published in Znet
