Written by William E. Rogers MBA, CFP, EA
As the election season heats up, you are probably going to hear a lot of discussion about trade policy. Although there is no question that millions of American workers have been displaced by globalization; I personally feel that this is the wrong issue to focus on. Why, because the offshoring of jobs and the ensuing hollowing out of small town America have taken place over thirty years. I believe that it is extremely dishonest to tell voters that we are going to magically bring our jobs back by simply renegotiating trade deals. The reality is the global economy doesn’t work that way. We are only lying to ourselves by not recognizing the fact that the genie has left the bottle, and there’s no putting him back in. Whether we like it or not, we have to come to the stark realization that jobs that have been lost to global trade are not coming back.
So, what can we do? I always advise my clients to develop a mindset to be in tune with coming trends, not yesterday’s trends. I feel that globalization is yesterday’s trend. The coming trend that we all need to prepare ourselves to deal with is AUTOMATION. Our economy is growing and the stock market has been booming over the past five years, but people in general still feel a tremendous amount of economic anxiety. So, what’s missing in this picture? JOBS…Why? Compare the following companies for a moment: Facebook to General Motors, Google to General Electric, and Netflix to U.S. Steel. What do Facebook, Google, and Netflix all have in common? They’re all behemoth companies in terms of stock market value, but employ a fraction of the number of people as compared to General Motors, General Electric, and U.S. Steel. In 2016, what types of companies are you more likely to find? A company that looks more like Facebook, or a company that looks more like General Motors?
Yes, that’s right folks we are in a digital economy, not an industrial economy.
Therefore, the strategic threat that must be addressed is what we are going to do about the coming wave of people whom will be displaced by the proliferation of artificial intelligence and automation technologies? You see, we are no longer talking about the workers and towns we all forgot about over the past three decades when we as consumers preferred cheaper imports vs. American made goods. We are now talking about jobs held by college educated workers. Many of whom who are carrying student loans in excess of $50,000. What are we going to do about the imminent wave of unemployed accountants, lab technicians, actuaries, bankers, analysts, etc. etc.?
Do I have your attention now?
This is a serious socioeconomic question that leaders in business, government, and education must answer. Which jobs should be performed by robots, and which jobs should be performed by humans? I’m not kidding, Uber is already demoing driverless cars, pizza parlors are experimenting with robot delivery drivers, and Amazon is expanding the use of drones to deliver its packages. Now, I am not envisioning a world as dark and post-apocalyptic as depicted in the Terminator movies, but I sincerely believe by eliminating a person’s ability to make a living for his/her and family is pretty much like a death sentence. Let’s address the issue of mass automation while we still have time. Otherwise, we will end up with even more people thrown out on the street, homes foreclosed, and businesses boarded up.
Tell us what you think?
William E. Rogers, MBA, CFP, EAWatch
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