Written: 1 June 1998
Canada is not suffering from a simple recession, though we often read that it is. Mergers and their downsizing, globalization and its restructuring, free trade and the flight of factories to low-cost labour areas, the mushrooming of the national debt and the disappearance of government deep pockets -- all these are part of the picture, but the most important factor is left out. Without appreciating that factor, nothing we do to address the situation will work.
That factor is the permanent downsizing of the labour force through the capture of work by "labour-saving" technology. Sales force automation, syndicated selling, laboratory automation, warehouse management systems, automated booking, automated tellers, e-tickets, online banking, automated underwriting, automated front desk clerks -- all these "systems" have no other purpose than to reduce manpower. As Canadian Datasystems once wrote: "What is a computer for, if not to save labor?" "Saving labor" means eliminating wages, holiday pay, pension plans, security, careers, a future. It may also mean eliminating our ability to exist as a cohesive society.
Technology is a paradox. It helps as well as it hurts. Technology has greatly benefitted us in many ways, but it's a two-edged sword. We all know its ability to enhance our pleasure, add to our productivity, and increase our profit. But we choose to remain unconscious to the magnitude of its ability to capture work. When it is applied across the board to take work away from large numbers of Canadians, we create a major, national problem for ourselves -- not quite an extinction level event, but definitely deep impact.
Since the Second World War, unemployment has steadily risen, averaging 4.2 per cent in the 1950s, 5.1 in the 1960s, 6.7 in the 1970s, and 9.3 in the 1980s. In the 1990s, it has hit peaks of 11 per cent. For youth, unemployment stubbornly stands at more than double that figure. We are learning to tolerate higher and higher levels of unemployment. We shall be required to tolerate levels soon that we would now consider difficult to contemplate.
Why is this? Because up till now, technology has been capturing jobs, but now it is beginning to capture whole occupations. Corporate travel agents, medical lab technicians, printing trades, and warehousemen are examples of whole occupations that are threatened by "end-to-end solutions" and "automated workflows."
When "recession" does hit, it masks the shedding of the worker. But when recession lifts and workers don't return to jobs, the trend is starkly revealed. If we truly wish to find the explanation for a "jobless recovery," we need go no further than business plans like this: "Sam Pierson, president of AGA-PGT Inc. wanted to expand capacity without adding employees. But he realized that, with conventional hydraulic injection molding, he could not reach his goal of a 'lights-out' [i.e., workerless] molding plant. ... But the firm achieved near lights-out conditions at its Vernon, Conn., molding plant by using new computer numerically controlled servo-driven electric injection presses, plus impressive automated material and parts-handling systems." (Plastic News, Sept. 1997.) Is this not a thumbnail sketch of manufacturing and service automation's impact?
Unions have been weakened by the reduced need for labour and so can't represent the workers' interests as well as they once did. Governments find revenues falling as Canadians' incomes drop They in turn are rationing funds to hospitals, schools, and social services, which are also rapidly shrinking their services. Bankrupt of ideas, governments follow a business model, cutting costs by shedding workers themselves.
These conditions will persist through good times and bad. They are not cyclical; they are structural. If we continue following the path we are on, we shall create a gulf between the employed and the technologically displaced that will lead to a permanent, growing, and impoverished underclass.
Please do not be fooled by the conventional wisdom that manufacturing jobs are being eliminated but service jobs are opening up or that computers create one new job for every one they close down (they do not). Automation is eliminating service occupations faster than it did manufacturing jobs. Why is this? Because service tasks are simpler, more repetitive, and thus more easily automated.
Unless corporations are stopped by an aroused and united public voice, anything that can be automated will. Watch for any occupation that earns its keep in the following ways to disappear in the near future (please hear me clearly: I said "occupation," and not "job"): (1) storing, filing, and retrieving; (2) monitoring, analyzing, accounting, and reporting; (3) doing middleman work (booking, selling, ticketing, dispensing, shipping, receiving); (3) making transfers of money, mail, stocks, or information; and (4) making decisions or issuing policies whose choices the consumer can just as well indicate to a machine. The list will get bigger as "systems" get better at doing our work. No occupation, not even computer programmer, is immune. If any of these job descriptions fits you, watch out!
Consider this as well. Automation leads to centralization and centralization knows no boundaries. Just as corporations centralize, so do economies. Peter Drucker recently suggested what this should mean to Canadians. He pointed out that the U.S. is now the only country with sizable service exports. Soon the United States will be the hub of all automated, online, remunerated services. In the same way that companies squeezed out workers, so U.S. services will squeeze out "hinterland" economies.
Already our unemployment rate is typically twice that of the U.S. Expect the difference between the two rates to rise. Unless the trend towards automation is stopped, the only significant employment pool left may one day be in the United States. Just as the Canadian worker has been displaced from work, so may the Canadian economy.
Let me remind you of what Business Horizons magazine said in 1993: "We are moving rapidly toward a 'post-service' society in which most routine and repetitive service jobs are significantly reduced or eliminated. ... What appears to be happening is no less momentous than the end of industrial society as we know it and the dizzying arrival of a new type of society with a far different economic base. ... We are witnessing what may be the permanent downsizing of the human work force."
We are seeing our standard of living decline, our country getting poorer rather than getting ahead. None of us would have wished this upon ourselves had we known then what we know now. It was an unforeseen consequence of unwise decisions.
Automation is not a bug; it is a virus that will spread throughout our population, claiming people's jobs and eventually taking the corporations down with it. StatsCan reports that consumers are getting poorer and financing their consumption out of debt now rather than income. Because robots and "systems" do not buy goods and services, they may some day be producing them without buyers. Then corporations themselves will begin to fall. When corporations start clamouring with the rest of us, what then?
When that point comes, it will be no easy matter to put our people back to work. They will be technologically obsolescent, the frontier of productive knowledge having passed them by. The solution to the structural unemployment problem will not be as easy as a simple infusion of government cash.
If we undermine work, we undermine the entire basis of our peaceful existence together. It may be fine for other countries to raise coca and deal drugs on international markets, beg by the roadside, topple governments, loot and burn, or remain docile while living in poverty and fear. But Canadians don't live life these ways.
We have tacitly agreed among ourselves to earn our keep by working. An honest day's wages for an honest day's work, full employment these have been our social contract. Take work away from us and it isn't clear how we will earn our living. This is really the new frontier, the uncharted territory that the mixed blessing of technology has led us to.
Expect government revenues to continue shrinking. And, yes, expect the demands on government for relief (retraining, placement, medical services, unemployment insurance, welfare), to continue to grow. Governments will be left to handle their paradoxical finances until they find ways to raise revenue by either taxing those in whom wealth is concentrated or else putting people back to work.
The paradox that governments face is that the governed will demand more services even as governments' revenues are falling. Such is the result of putting one's population out of work. Robots do not pay taxes. But the people they replace still pay taxes and still require social services, even as they are less able to pay for them. After all, life will go on for the unemployed.
A trend is not a law. We shall permanently downsize the work force only if we allow it. If we stand firm in demanding that public policy not permit the permanent downsizing of the Canadian workforce, then we shall in time collectively find a way to reverse this trend. I urge Canadians to begin widely discussing this global problem.
I also urge Canadians to elect a government next time that can see clearly and has the courage to wrestle with this problem. If the government feels its hands are tied because it cannot contemplate taking a leading role that involves increased expenditure, then please, accept our thanks and step aside. If jobs are to be saved, then the next phase of things will involve a tighter rein on business practices and the expansion of government's role in the whole arena of work. I recommend that the voters of Canada in the next election insist that their party have a full platform addressing the technological capture of work and its impact on the people.
I also invite the media to leave aside discussion of "recessions" for the time being and cover the impact of technology on work. If we don't zero in on this phenomenon, we shall face a situation eventually that is worse than the Great Depression and harder to get out of.
"Automating workflow has been one of the primary benefits of electronic prepress systems since their introduction. However, much of the prepress automation has been done piecemeal, producing islands of automation, each with its own type of workflow. In the early stage of automating the prepress crafts, the new digital workflows tended to mimic the steps followed by the craftsmen. Automation of estimating cost and price, prepress operations, printing, postpress finishing, shipping, and billing occurred more or less independently--digital files from one stage were seldom passed on to the other stages.
"There has been a growing impetus to develop a single, all-digital workflow throughout the prepress, printing, and postprinting stages. An industry consortium called CIP3 (which stands for International Co-operation for Integration of Prepress, Press, and Postpress) is developing standards for the transfer of digital data from one stage to another.
"How close are we to automating the digital workflow for print production? The technology now is at the bleeding edge. ... Ten years from now, the automation will be taken for granted." ("Anticipating the All-Digital Workflow," Electronic Publishing, March 1998.)