Washington, DC (PT)The Fourth Industrial Revolution is nearly upon us! Extreme automation, global connectivity and artificial intelligence will continue to change how we all work and do business. This isn’t new information: we’ve all seen the jokes about robots potentially taking jobs from McDonald’s employees who demand higher wages. The reality though, is that the coming AI revolution is likely to usher in even greater income inequality across the entire spectrum.
Automation and AI has already had an impact on low-skilled assembly line and factory jobs. But the coming AI revolution is likely to impact other jobs that have remained unaffected until now– mainly office and bureaucratic work. If your job could be done by a robot, it probably will be soon.
From the World Economic Forum’s 2016 meeting:
“Automation will initially affect clerical work, sales, customer service, and support functions. Robotic process automation, automatic reporting, and virtual assistants will become common. Minor claims in insurance could be processed without human intervention, most incoming customer queries answered automatically, and many customer calls deflected. In finance, ‘robo-advisors’ are already available in the market. In the legal world, computers can quickly go through millions of emails and dramatically cut the cost of investigations. “
As a result, low and middle-skilled workers will be forced to somehow adapt. This will inevitably result in unemployment across the spectrum– even if only temporary. Unless training or education for a higher-skilled job is available, workers will be forced to seek out jobs that automation cannot replace– yet. Furthermore, considering that most low-skilled workers are also low-paid, it is unlikely that those loosing their jobs will be financially able to seek out higher education and training in order to adapt.
But for every job lost, profits will rise and someone at the top will benefit but it probably won’t be you:
“Near-term polarization in the labor force and greater income inequality imply larger gains for those at the top of the income, skills and wealth spectrums. “
However, even for those at the top there are still risks. AI development and global connectivity inevitably lead to security concerns as well as concerns regarding legal protections on intellectual property. Also, if a company is planning to invest in a country, it is imperative that an economy grow. Drastic political change is not good for global business investments:
“It (extreme connectivity) increases the ability of diverse groups to organize protests and offers the potential for greater publicity to violent extremists … Extreme connectivity has also proved a threat to mainstream political parties across the globe. The 2015 mass protests in Brazil drew millions to the street, with social media again proving a driving force. In Western Europe too, mainstream political parties have been threatened by the rapid rise of protest movements that have exploited social media to galvanize their followers.”
If you thought Facebook censorship was bad now, just wait until a large portion of the United States population starts losing their jobs. Labeling protests, activist organizations, and union groups “economic terror threats” isn’t such a far-fetched idea for the future. The World Economic Forum even admits, people are not going to be happy:
“A threatened middle class may press for restrictive or repressive policies in a futile attempt to hold back the tide of technological change.”
Unfortunately, it looks as though income-inequality is destined to get worse before it can potentially improve. While the GDP continues to rise, average American incomes do not. As we usher into the Fourth Industrial Revolution with a shrinking middle class, improvement is not going to come easy or have a simple solution.