Heading for the scrap-heap

In the 19th century, the industrial revolution meant that highly skilled individuals were not required. The jobs of craftsmen and artisans were replaced by machines.

Artificial intelligence (AI) technology has the potential to boost productivity but increase wealth inequality and wipe out millions of jobs, a research report by the White House claimed. 

Researchers across the world have given varying estimates about the size of job losses. One recent estimate by Forrester suggests 6 percent of jobs could be wiped out thanks to AI in the next five years. The White House report cites a 2013 study from Oxford University suggesting 47 percent of U.S. jobs are at risk due to AI, while the Organisation for Economic Cooperation and Development (OECD), estimates only 9 percent of jobs are at risk of being completely displaced.

AI, like any new technology, is key to growth because it increases output without requiring increases in labor or capital. "In the last decade, despite technology’s positive push, measured productivity growth has slowed in 30 of the 31 advanced economies, slowing in the United States from an average annual growth rate of 2.5% in the decade after 1995 to only 1.0% growth in the decade after 2005," the report states.

The White House report suggests that lower-skilled and less-educated workers could feel the heat the most.

"This means that automation will continue to put downward pressure on demand for this group, putting downward pressure on wages and upward pressure on inequality. In the longer-run, there may be different or larger effects. One possibility is superstar-biased technological change, where the benefits of technology accrue to an even smaller portion of society than just highly-skilled workers," the report said.

"The winner-take-most nature of information technology markets means that only a few may come to dominate markets. If labor productivity increases do not translate into wage increases, then the large economic gains brought about by AI could accrue to a select few. Instead of broadly shared prosperity for workers and consumers, this might push towards reduced competition and increased wealth inequality."

Robots could take all the jobs no one wants to do, reducing the working day and the working week, leaving more time for leisure and the fulfilment. But left to its own devices, the capitalist economy does not work this way.