I’ve been super busy for the last 2 months, between attending weddings, bachelor parties, and vacations, which is why I have seldom posted lately. As I sat in a Brussels cafe a few weeks ago drinking an espresso and trying to look as least touristy as possible, I not only watched the North American markets decimate my hedges, as well as people watch foreigners take pictures next to Mannequin Pis, but I also had time to reflect and have good conversation with my good friend over at YWealth over many things. Macroeconomics always seems to pop up in our long and thoughtful chats, and this espresso chat was no different. Specifically, this chat focused on job security and the future of human employment.
Technology advancement is growing at a rate that’s never been witnessed before over the history of mankind, and it seems to exponentially get faster as time goes on. From “big data” and machine learning, to autonomous innovation, life seems to continuously become more efficient by the day.
It’s important to think about your life and career not only over a short term period of say 5 years, but over a longer period as well. After all, most of us will be working until we are 65 before retiring, and if you are like me or someone in their 20s, that 65 age milestone won’t be happening for a very long time. What will the world look like in 30 to 40 years? At the rate in which technological advancements are happening and being incorporated into our day to day lives, it’s very hard to predict how humans will interact with technology, and how technology will be improving our lives by that stage.
Now think of your career in mind or where you would like to grow over a longer time period, it’s important to think about automation. Automation is ever rapidly growing. The incorporation of automation into real world applications is making what used to be common every day jobs become obsolete. Why need to drive your car to work when it can drive for you? Why update your working files for financial models at work when it updates real time? Why need assembly line workers when robots can build a piece of equipment faster and more efficiently? As shown in a Global News segment on automation in the workplace, a study from the Brookfield Institute at Ryerson University stated that “42% of all current jobs across the country (Canada) are at a high level of being either disrupted or eliminated due to automation.”
It wasn’t too long ago when assembly line workers populated production plants for large car manufacturers. Now, many of those jobs don’t exist. Some may argue that automation has created new jobs which is indeed true… people are needed to design and build robotic components, and people are needed to service the machinery. But at some point, even those specific roles could be done by robots themselves.
Look at the service industry. There are robots in some countries such as Japan that are being used as a bank teller, or a server at a restaurant, or any front line worker or similar job that entails a repetitive procedural role. I don’t think it’s far fetched to believe that in 20 to 30 years, the majority of these kinds of jobs in first world countries would be easily replaced by a non human entity.
So what does that mean on an economic scale? Well, more automated jobs means less humans are needed. Unemployment would likely rise as many unskilled labor jobs or repetitive job roles would not require human intervention. What would eventually be left of the workforce are a select few niche jobs that perhaps require human system 2 decision making or intellectual decision making, such as a judge or law enforcement. A government would need to deal with a growing population who are majority unemployed. Every citizen would require a fixed wage per year because finding employment is near impossible, and the government would simply act as a source of income for its citizens. This almost sounds like a socialist society in a way, but if every job or function of society is automated, what are humans needed for? If no one is working, how do people make money and afford living expenses? I suppose this gives no incentive for entrepreneurship or innovation, but maybe entrepreneurs will be robots pitching their business plan to a Kevin O-Leary robot look alike. Everyone could just relax and hang out and be like me at this instance sitting in a Brussels cafe without a care in the world because no one has to work… well no one would be able to work. Funding such a large unemployed population would likely mean higher corporate taxes or high levels of economic stimulation and capital expenditures and investments by the government. Inflation would rise, creating the need for central bank action on interest rates. Corporations would see profit margins shrink because of higher income taxes to help feed all the people without jobs. But then again, even corporations would contain very minimal head counts. In the end, we would be looking at a fancy and complex non-capitalist sovereign state where the government has complete control over fiscal and monetary policy, and how wealth is distributed… interesting!
Although this narrative seems silly and at this point in the conversation, the Belgian Leffe beer was starting to get to me, it does raise the question about the importance and merit of the future of employment and specializations within certain sectors of the economy.
To bring this day dreaming back down to Earth and into perspective, it’s quite common for employers to encourage their employees to build a vast set of skill sets as opposed to becoming specialized to one niche area of their work. Now a days, it’s quite common for employees to enroll in plenty of workplace training, for individuals to change jobs every 3 to 5 years, and for many individuals to go back to school to work towards another designation or degree. Continuously growing and maintaining one’s experiences and skill sets can allow oneself to remain flexible during any economic cycle. Having the ability to add value and be sought after given any economic environment is crucial to ensuring certain “employability” and constant financial stability and flexibility for oneself, and future self at retirement.
Add to your toolkit whenever you can. Every one has a tool belt, but not everyone has a tool in each pouch.