he topic of artificial intelligence’s loom-

ing impact on the US economy is one

both Hillary Clinton and Donald Trump

studiously ignored during the 2016 cam-

paign for President, choosing instead to

focus on job losses from bad trade policy,

despite the fact that the vast majority (at a ratio

of about nine-to-one) of good-paying manufac-

turing jobs that have disappeared in the last 30

years disappeared because of new technology,

not because they were shipped overseas.

This silence comes despite warnings of AI’s

potentially disastrous impact, even by technolo-

gists and scientists like Stephen Hawking, Bill

Gates, and Elon Musk, not to mention alarm bells

sounding in the halls of academia and offices of

economists.

Amid that debate, during the closing days

of the Obama Administration, the Executive

Office of the President released a policy paper to

very little fanfare, titled, “Artificial Intelligence,

Automation, and the Economy.” The US political

leadership was (and remains), curiously asleep at

the switch after the paper was released.

Repeated requests by The Technoskeptic

to the House Subcommittee on Research and

Technology yielded not a single call back to com-

ment on the new policy. Requests for comment

from a former technologist that served in the

Obama Administration’s Office of Science and

Technology Policy (OSTP) were met with silence.

Similarly, we received no reply to a recent request

directly to the OSTP to discuss the policy paper,

to determine whether the Trump administration

accepts or repudiates it.

In the meantime, like much of the rest of

the federal bureaucracy, the OSTP at the White

House is now critically understaffed. According

to an April 2017 article in Motherboard, of the

114 positions in OSTP, more than 70 are still not

filled. And of the positions that are filled, none

is specifically tasked with the tracking the issue

of artificial intelligence.

Unless the Trump administration issues new

policy guidelines or Congress gets involved, every

federal agency will nominally follow the Obama

administration’s AI strategy. When it comes to

thinking about AI, right now our government

Art Keller is the news editor of The Technoskeptic. Since serving in the armed forces and the CIA, he has been a freelance writer and commentator.

Preparefor the

Jobocalypsea r t k e l l e r

TWhile artificial intelligence prepares to radically upend employment, government is on autopilot.

Photo: iStock.com / Petmal

is, ironically, on autopilot. This means executive

agencies will be making assumptions and shap-

ing outcomes based on a policy that no national

politician seems to want to discuss.

Since our highest political leaders don’t seem

to care about the issue (perhaps because the

numbers of Senators and representatives are

mandated by law, and so they never need fear

being replaced by a piece of software), it might

behoove the average American to have at least

a basic notion of the approach to dealing with

AI our leaders have quietly adopted. Because

hidden in the painfully dry economic jargon that

make up the 55-page report are assumptions and

intentions that, if acted upon, may lead to horrific

outcomes for many, many Americans.

One of the biggest assumptions underlying

the whole paper is that we have some ability to

predict AI’s effect on our economy, despite the

fact that there has never been anything like AI

before. AI is not just smarter computers. It is com-

puters and software and robots so advanced they

will not only replace low-skilled jobs like driving

a truck, or medium-skilled jobs like manufactur-

ing and construction, but high-skilled jobs like

software development, law, medicine, and so

forth, ad nauseum.

Instead, the report clings to the conven-

tional economic wisdom that AI is good as it

will increase labor productivity, and “labor pro-

ductivity generally translates into increases in

average wages.” This completely ignores that

in our current era of high-tech, wage growth has

been flat for decades in the US. And even though

high-tech has already resulted in the loss of more

than six million manufacturing jobs in last 20

years, the report asserts “AI should be welcomed

for its potential economic benefits.”

Photo: The Eisenhower Executive Office Building, home of the Office of Science and Technology Policy

The winner-take-most natures of information

technology markets mean that only a few may

come to dominate markets. If labor productivity

increases do not translate into wage increases,

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.”

For readers who aren’t policy wonks, that

scenario translates to, “The few folks who make

the AI will get the money you used to get paid

to do your job. You are, in other words, quite

likely screwed.”

The report carries an implicit assumption

that many new AI-assisted jobs will be created.

Although how numerous those jobs might be,

The paper also incorporates a vast range of

estimates, which makes it hard to see how it can

be considered usefully prescriptive. It alleges AI

will cause the loss of between nine and 47 percent

of jobs in the next two decades. One is a minor

annoyance; that many jobs are routinely lost and

replaced every few years. The other is a potential

social and economic disaster that could mean

the return of breadlines, even sharper political

divides, and unemployment riots that could open

the way to creeping authoritarianism.

The report even concedes that mass unem-

ployment scenarios are not unlikely. Artificial

intelligence, it says, may result in “a superstar-

based technological change, where the benefits

of technology accrue to an even smaller por-

tion of society than just highly skilled workers.

s u m m e r 2 0 1 7 | 4 3

and reporters shrieking that the sky is falling

remains baffling.

Among the other fun facts in the report was

that right now, labor’s share of gross domestic

product is at a historic low, and the developed

country where that trend is the worst is the US.

Income inequality is already at a historic high in

the US, as the top one percent of society now gets

about 20 percent of the GDP. Oh yeah, and the

productivity growth from incorporation of high-

tech that was supposed to lead to higher wages?

That doesn’t exist. Per the report, productivity

growth has dropped off dramatically since 2005.

And a final fun fact: the US now spends half of

what it did 30 years ago on retraining programs

that might help workers cope with a job lost to

technology.

The report would have us believe that the

way to deal with the flood of AI-driven job losses

is education, retraining, and economic aid for

displaced workers. To support that assertion, it

compares the impact of technology on the job

markets of several high-tech Western industri-

alized nations. According to the comparison,

there are high-tech countries that have main-

tained high wage levels despite the increase

tech and automation, but the countries that main-

tained wages and employment had a much more

robust social safety net and retraining program.

Germany, for example, has kept wages and

employment high, but also spends six times, as

a percentage of GDP, what the US does on such

support programs.

and whether they will be present in the numbers

to make up for the millions we know will be

destroyed, was not addressed. It is treated as an

item of faith that somehow new jobs will appear,

because they always have.

The report claims that AI will create new

kinds of work, delineating one potential growth

area as jobs that use “augmented intelligence,”

in which, for example, AI does the hard work of

diagnosing an illness, but a health care worker

still tells the patient their options and administers

the treatment. Not necessarily a bad thing for

Americans, who suffer the highest health-care

costs in the world…but one likely to put a lot of

doctors and nurses—and medical schools—out

of business (and really, who doesn’t love inter-

acting with diagnostic software when your life

is at stake?).

Other jobs it predicts arising out of AI are

development of new technology, although why a

lot of new jobs would be generated for those roles

when we already have software writing software

right now, is also not explained.

Another growth area is supervision and repair

of the robots/AI that will replace countless human

workers, a.k.a. “servicing our robot masters.”

Finally, we might get new jobs, per the report,

as a “response to paradigm shifts,” the idea

being that new jobs we cannot foresee will be

created. The example it gives is that in the case of

autonomous vehicles, we might need more urban

planners to adapt our cities for autonomous traf-

fic. How hiring, say, 100 new urban planners

would be a net gain for a city’s economy after

autonomous vehicles put 10,000 local delivery

drivers out of work is not addressed.

What is crystal clear is that the people who

are already the poorest are the most vulnerable

to losing their jobs to AI. The report estimates

AI will threaten up to 83 percent of jobs that

pay less than 20 dollars an hour. How that one

statistic alone doesn’t have labor economists

The US now spends half of what it did 30 years ago on retraining programs that might help workers cope with a job lost to technology.

proven to be, not only masters of technology, but

of tax avoidance?

And what if we don’t get the funding to help

cushion the worst of the transitional shocks of AI,

and yet we still embrace AI, invest in accelerat-

ing AI research, and do other things to increase

the adoption of AI as the report recommends?

What outcome will we get?

Without the absolutely crucial support to help

displaced workers of all skill levels cope with loss

of their jobs, haven’t we just knowingly set the

stage for a political and economic catastrophe,

the likes of which ignited WWII and other hor-

rific, global conflicts? What happens to a country

of 300 million guns without enough jobs to go

around?

If the report’s authors did a little better job

of explaining how the increased use of AI might

help us avoid that nightmare scenario, instead

of marching us squarely into it, one might be a

little more sanguine about how AI might be a

boon to our economy.

What we have, instead, is 55 pages of tech-

no-Pollyanna fantasy. Despite acknowledging

the many ways in which AI could turn out to

be an absolute economic disaster, unless we

get almost everything to do with preparing

for and managing AI right, the authors still

assume, with few facts in evidence, that AI will

be a net positive.

Having read and thoroughly digested

“Artificial Intelligence, Automation, and the

Economy,” one cannot help but wonder if future

generations will not read the same document and

shake their heads in amazed disgust.

“How,” they will say, “could the authors

could fail to see that even at the time the report

was written, let alone in our far off future, AI

was already exacerbating the conflict between

the need for millions of meaningful, well com-

pensated jobs, and the financial interests of tech

barons and AI-mongers?”

So while the report rightly says we need to

have better unemployment insurance and much

more extensive retraining, it also requires that

people get used to “lifelong learning” (ignoring

the fact that a human’s ability to master new

skills has been clinically proven to decline with

age). Even were those programs put perfectly

in place, it implies the solution to the crisis of AI

is to be constantly getting on and off a training

treadmill for a person’s entire working life.

Employment stability, what there was of it,

evaporates like a morning dew after a hydrogen

bomb. Workers are left in constant fear of job

elimination and the need for retraining, during

which they get paid little or nothing. Which is

going to feel like some version of hell to a lot of

people…and that is the best case scenario. This,

ultimately, is where the report is fundamentally

most flawed.

Let us put aside for the moment that a sig-

nificant chunk of the population would have

either no interest in, or aptitude for, such com-

pulsory lifelong retraining. Where would the

money for the retraining and much larger social

safety net come from? On that topic, it is wildly

optimistic at best. It does suggest the obvious,

that the companies that make and use AI be

taxed at a higher rate. But can anyone assert

with a straight face that any Congress would

increase spending in this arena by six times?

And that the money would come from the politi-

cians’ biggest political donors, which are—you

guessed it—high-tech companies? The same

high-tech companies current sitting on a stash

of 2.5 trillion dollars in profits in overseas banks,

waiting until this administration, or the one that

follows, declares a corporate tax holiday, so they

can repatriate the funds back to the US? Do we

have any realistic chance to reach funding parity

with Germany and other high-tech economies if

we depend on squeezing the taxes for it out of

Apple, Google, and Microsoft, who have already