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If the robots are coming for our jobs, make sure they pay their taxes | John Naughton

Studies have predicted that coming automation will result in a ‘hollowing-out’ of middle-class jobs.
Studies have predicted that coming automation will result in a ‘hollowing-out’ of middle-class jobs. Photograph: John Lund/Getty Images/Blend Images

The problem with the future is that it’s unknowable. But of course that doesn’t stop us trying to second-guess it. At the moment, many people – and not just in the tech industry – are wondering about the impact of automation on employment. And not just blue-collar employment – the kind of jobs that were eliminated in the early phase of automating car production, for instance – but also the white-collar jobs that hitherto seemed secure.

In a much-cited 2013 study, for example, economists David Autor of MIT and David Dorn of Spain’s CEMFI institute found that because computers could now be substituted for low-skill workers performing routine tasks (book-keeping, clerical work and repetitive production and monitoring activities) we were going to see a “hollowing-out” of middle-skilled, middle-wage jobs and “a corresponding rise in employment at both the high and low ends of the skills spectrum”. And in a 2015 study, two Oxford researchers, Carl Frey and Mike Osborne, took the 702 categories that the US labour department uses to classify jobs and tried to estimate which of them might be vulnerable to automation using the “smart” technologies that are now commonplace. Their conclusion: almost half (47%).

Waves of automation have always involved periods of traumatic disruption

If these predictions are accurate, then there is trouble ahead because the existence of a stable middle class seems to be a prerequisite for a liberal democracy. But because of the aforementioned problem with the future, we don’t know how immediate the threat of high-end automation is. It could be that getting to this particular future will take a lot longer than the technology’s boosters and Cassandras think. But no one – with the possible exception of Donald Trump – doubts that it will happen.

The standard riposte to concerns about automation is to pooh-pooh them. This is an old story, sceptics contend. Anxiety about the rise of the machines goes back to Elizabeth I and the stocking frame. And each time the fears have been overblown: the new technology did indeed destroy jobs; but the new industries that it enabled eventually created even more jobs. So calm down: it will come good in the end.

And maybe it will. But there’s still a problem. What both the boosters and the sceptics ignore is that waves of automation have always involved periods of traumatic disruption. In a fascinating recent article the economist Tyler Cowen pointed out the problem with blithe assumptions about a better future – they miss out on the history of what actually happened in the great industrial transformations of the past. “The shift out of agricultural jobs,” he writes, “while eventually a boon for virtually all of humanity, brought significant problems along the way. This time probably won’t be different, and that’s why we should be concerned.”

Estimates for private per-capita consumption from 1760 to 1831, for example, suggest that it rose only by about 22%. And Cowen cites estimates by the economic historian Gregory Clark that “English real wages may have fallen about 10% from 1770 to 1810, a 40-year period. Clark also estimates that “it took 60 to 70 years of transition, after the onset of industrialisation, for English workers to see sustained real wage gains at all”.

Translate that to the present and you can see the dangers. If the people hitherto known as middle-class were to experience this kind of income suppression, we would expect political trouble. Yet, says Cowen, that may be the track the US is on. Median household income is down since 1999, and median male wages were probably higher in 1969 than they are today. His conclusion: transition costs from automation will be higher than many economists – and everyone in the tech industry – likes to think.

Then there is the question – also avoided by the tech industry – of who pays those transition costs. Conventional thinking says that the owners of the machines should reap the rewards, while the state picks up the costs of the ensuing human wreckage. So when Bill Gates pitched into the debate last week with a proposal that robots should be taxed, just like human workers are, you can imagine the splutters of outrage from the neoliberal fortresses of Silicon Valley. “Right now,” he said, “the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.” And the money raised should be used to retrain people the robots have replaced, with “communities where this has a particularly big impact” first in line for support. I never thought I’d write this, but here goes: good for you, Mr Gates.