Bill Gates: People Don't Realize How Many Jobs Will Soon Be Replaced By Software

[Tugg Speedman]

Bill Gates: People Don't Realize How Many Jobs Will Soon Be Replaced By Software Bots

http://www.businessinsider.com/bill-gates-bots-are-taking-away-jobs-2014-3


Big changes are coming to the labor market that people and governments aren't prepared for, Bill Gates believes.

Speaking at Washington, D.C., economic think tank The American Enterprise Institute on Thursday, Gates said that within 20 years, a lot of jobs will go away, replaced by software automation ("bots" in tech slang, though Gates used the term "software substitution").

This is what he said:

"Software substitution, whether it's for drivers or waiters or nurses … it's progressing. ...  Technology over time will reduce demand for jobs, particularly at the lower end of skill set. ...  20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model."

He's not the only one predicting this gloomy scenario for workers. In January, the Economist ran a big profile naming over a dozen jobs sure to be taken over by robots in the next 20 years, including telemarketers, accountants and retail workers.

Gates believes that the tax codes are going to need to change to encourage companies to hire employees, including, perhaps, eliminating income and payroll taxes altogether. He's also not a fan of raising the minimum wage, fearing that it will discourage employers from hiring workers in the very categories of jobs that are most threatened by automation.

He explained:

"When people say we should raise the minimum wage. I worry about what that does to job creation ... potentially damping demand in the part of the labor spectrum that I’m most worried about."

[Tugg Speedman]

He s 100% correct, raise the minimum wage and these jobs will be automated away.

[ChicosBailBonds]

He s 100% correct, raise the minimum wage and these jobs will be automated away.

Shh, raising the minimum wage is good for everyone.  Hell they should raise it to $50 an hour, it has no impact on jobs...so I'm told.

[jesmu84]

I believe the topic that Gates is speaking on is greatly going to change the economic, social and cultural situation in the US. It will be very interesting to see what happens with our workforce and population. There will be people who only are qualified for minimum wage jobs, and if those are replaced by tech/automation, then what? What does that entire population segment do? How do they earn a living? SS? Unemployment? Will we, as a society, be ok with people not working for a living? Be very interesting to see... If you think the mythical, so-called "class warfare" is bad now, just wait.

[brandx]

I believe the topic that Gates is speaking on is greatly going to change the economic, social and cultural situation in the US. It will be very interesting to see what happens with our workforce and population. There will be people who only are qualified for minimum wage jobs, and if those are replaced by tech/automation, then what? What does that entire population segment do? How do they earn a living? SS? Unemployment? Will we, as a society, be ok with people not working for a living? Be very interesting to see... If you think the mythical, so-called "class warfare" is bad now, just wait.

The one thing you can count on is that after all these jobs are lost - the people who are out of work will be called "lazy" and "takers"

[Tugg Speedman]

I believe the topic that Gates is speaking on is greatly going to change the economic, social and cultural situation in the US. It will be very interesting to see what happens with our workforce and population. There will be people who only are qualified for minimum wage jobs, and if those are replaced by tech/automation, then what? What does that entire population segment do? How do they earn a living? SS? Unemployment? Will we, as a society, be ok with people not working for a living? Be very interesting to see... If you think the mythical, so-called "class warfare" is bad now, just wait.

Bingo!

That's why it's called "disruptive technology."  In the long run it's a huge positive.  In the short-run (next several years) whole industries will be eliminated and jobs that takes hundreds will now take a dozen or less.

It will cause social stress, already is.

See the Uber post.

[keefe]

In the long run it's a huge positive.  

I saw Detroit go through this when I was studying in Ann Arbor. It was devastating but necessary.

[ChicosBailBonds]

I believe the topic that Gates is speaking on is greatly going to change the economic, social and cultural situation in the US. It will be very interesting to see what happens with our workforce and population. There will be people who only are qualified for minimum wage jobs, and if those are replaced by tech/automation, then what? What does that entire population segment do? How do they earn a living? SS? Unemployment? Will we, as a society, be ok with people not working for a living? Be very interesting to see... If you think the mythical, so-called "class warfare" is bad now, just wait.

This is the situation today....and part of the problem is we keep letting in people illegally that are taking some of those minimum wage only jobs now, pushing Americans out of even those.  Of course, people will say Americans don't those jobs anyway.  BS.  Hell, my kid will turn 16 next year and when I was a kid that was standard job at a McDonalds, Burger King, etc...they taught kids the value of work and why you didn't want to stay in them long, they were a pitstop in life to get your butt in gear.  Now those jobs these kids can't even get because they are taken by someone that is trying to feed his family on it.

We reap what we sow.

[keefe]

We reap what we sow.

We sow what we reap. We are well past reaping the sown.

[jesmu84]

This is the situation today....and part of the problem is we keep letting in people illegally that are taking some of those minimum wage only jobs now, pushing Americans out of even those.  Of course, people will say Americans don't those jobs anyway.  BS.  Hell, my kid will turn 16 next year and when I was a kid that was standard job at a McDonalds, Burger King, etc...they taught kids the value of work and why you didn't want to stay in them long, they were a pitstop in life to get your butt in gear.  Now those jobs these kids can't even get because they are taken by someone that is trying to feed his family on it.

We reap what we sow.

There are things here that are correct. However, it doesn't really address the situation presented by Gates.

[ChicosBailBonds]

The one thing you can count on is that after all these jobs are lost - the people who are out of work will be called "lazy" and "takers"

No, that's reserved to the truly lazy and takers, of which there are plenty.  Those that have been on the teat their whole lives, not those displaced by change.  There is a difference.

[ChicosBailBonds]

There are things here that are correct. However, it doesn't really address the situation presented by Gates.

All connected, he's just talking about the next steps....but it has been going on for the last few decades.  Going to be fun.  This is why the gov't taking away my right to bear arms is going to be met with some pushback.  At some point, there will be social unrest and I'll be damned if I can't protect my family and property as a result.

The gov't won't be able to pay folks like they have for decades to not rebel.  Crazy conspiracy talk?  I'm sure some will claim it to be, but as a student of history and common sense, it isn't at all.

[forgetful]

Bingo!

That's why it's called "disruptive technology."  In the long run it's a huge positive.  In the short-run (next several years) whole industries will be eliminated and jobs that takes hundreds will now take a dozen or less.

It will cause social stress, already is.

See the Uber post.

I don't think it will be a huge positive.  We already have a problem with too many jobs leaving the US.  We will see more loss of jobs because of technology.  That will further lead us down a model equivalent to Rome, where typical well paid jobs are removed (in their case slave labor or trade from outside the original empire).  That led to the fall of the Roman Empire and will could realign world powers.

[brandx]

No, that's reserved to the truly lazy and takers, of which there are plenty.  Those that have been on the teat their whole lives, not those displaced by change.  There is a difference.

You and I seem to know that. I don't think the politicians do.

[keefe]

I don't think it will be a huge positive.  We already have a problem with too many jobs leaving the US.  We will see more loss of jobs because of technology.  That will further lead us down a model equivalent to Rome, where typical well paid jobs are removed (in their case slave labor or trade from outside the original empire).  That led to the fall of the Roman Empire and will could realign world powers.

It's about productivity. If a you can automate functions that do not necessarily generate shareholder value you free up that labor for more productive tasks. What usually happens is that most make the transition through training, effort, and luck. Unfortunately, some do not and fall into a chronic state of under or unemployment which is only rectified through tincture of time and natural attrition. 

[Tugg Speedman]

I don't think it will be a huge positive.  We already have a problem with too many jobs leaving the US.  We will see more loss of jobs because of technology.  That will further lead us down a model equivalent to Rome, where typical well paid jobs are removed (in their case slave labor or trade from outside the original empire).  That led to the fall of the Roman Empire and will could realign world powers.

In 1900 half of US jobs were on a farm.  Today it is less than 2%.

We did this transition once before, we will do it again.

[mu03eng]

Bingo!

That's why it's called "disruptive technology."  In the long run it's a huge positive.  In the short-run (next several years) whole industries will be eliminated and jobs that takes hundreds will now take a dozen or less.

It will cause social stress, already is.

See the Uber post.

As someone who works in the automation field, this is a huge deal and a good move, but a lot of folks(everyday and politicians alike) don't have the vision to see the change and address it.  One of the key "jobs" in the future is going to be the integration and maintenance of technology.  We are no longer going to have someone build a product, that's going to be a robot/automated process, however we still need someone to set-up and maintain that automated process.  Someone who can understand the diagnostics or troubleshoot an issue.  Right now those jobs are somewhat filled by IT professionals, but if anyone got their feces co-located that could be a new trade profession like plumber or electrician.  That would provide solid blue collar wage support as well as giving the US a competitive advantage in the manufacturing realm.  This also frees up those college graduates in IT for more advances.  Probably won't get there though because everyone HAS to go to college in this era.

As automation increases, the cost of logistics becomes more the long pole in the cost tent....meaning China becomes less attractive and the US (if it puts its educational and infrastructure house in order) could once again be a manufacturing hub.  Within the next 15-20 years we could be having a 2nd industrial revolution, if only we could apply ourselves in the right away.

Alas, I don't see any movement to take advantage of this golden opportunity.

[MU Fan in Connecticut]

It's about productivity. If a you can automate functions that do not necessarily generate shareholder value you free up that labor for more productive tasks. What usually happens is that most make the transition through training, effort, and luck. Unfortunately, some do not and fall into a chronic state of under or unemployment which is only rectified through tincture of time and natural attrition. 

Keefe,
I know that lingo.  You're talking kaizen & lean manufacturing with the phrase, "you free up that labor for more productive tasks."  I'm thnakful to be trained in it and am a big believer that it works.

[ChicosBailBonds]

In 1900 half of US jobs were on a farm.  Today it is less than 2%.

We did this transition once before, we will do it again.

US population in 1900 was 75 million

You have a volume issue to deal with now. 

[MU Fan in Connecticut]

As someone who works in the automation field, this is a huge deal and a good move, but a lot of folks(everyday and politicians alike) don't have the vision to see the change and address it.  One of the key "jobs" in the future is going to be the integration and maintenance of technology.  We are no longer going to have someone build a product, that's going to be a robot/automated process, however we still need someone to set-up and maintain that automated process.  Someone who can understand the diagnostics or troubleshoot an issue.  Right now those jobs are somewhat filled by IT professionals, but if anyone got their feces co-located that could be a new trade profession like plumber or electrician.  That would provide solid blue collar wage support as well as giving the US a competitive advantage in the manufacturing realm.  This also frees up those college graduates in IT for more advances.  Probably won't get there though because everyone HAS to go to college in this era.

As automation increases, the cost of logistics becomes more the long pole in the cost tent....meaning China becomes less attractive and the US (if it puts its educational and infrastructure house in order) could once again be a manufacturing hub.  Within the next 15-20 years we could be having a 2nd industrial revolution, if only we could apply ourselves in the right away.

Alas, I don't see any movement to take advantage of this golden opportunity.

This would have been back in 2005.  A former employer had a fully automated dependable and repeatable process in one of our Puerto Rico plants.  They had one maintenace person (per shift) to look after two such machines that fully assembled, inspected & packed electrical receptacles.  The company was trying to reduce the number of buildings in use.  The product line got moved to China where 30 assemblers now assembled via bench top.  The quality went down.  The kicker - there was no payback to move to China.  They kept running $ numbers they did not justify the move but the Purchasing Director had it as a yearly goal to move it so it got moved.  The part that bothered everyone was the company had done so much kaizen that there was room in another Puerto Rico facility to move the auto-assemble machines where they already had similar machines running.  

[LAZER]

Alas, I don't see any movement to take advantage of this golden opportunity.

Have you read about the digital manufacturing coop initiative in Chicago?  Seems like a step in the right direction.

[Tugg Speedman]

Have you read about the digital manufacturing coop initiative in Chicago?  Seems like a step in the right direction.

Look up Xerox Parc (Palo Alto Research Center) in the 1970s.  It was Xerox's "think tank" to figure out how technology was going to change the world and how they could take advantage of it.

In 1979 they created this demonstration commercial to show the future.  Again this was 1979 and it was 100% correct.  They figured out the future decades before it happened!

http://www.youtube.com/watch?v=M0zgj2p7Ww4

The problem was Xerox's management was a bunch of Luddite thinking dinosaurs and could not appreciate what they were looking at.  More specifically, they wanted to know how this was going to make people buy more xerox machines.  That's all they cared about.  

So Xerox closed down this operation and the creators and engineers that worked in Parc left and literally started Silicon Valley (since Parc was in Palo Alto/Stanford, this is why it is the center of Silicon Valley) and created trillions in markets capitalization.  Xerox got nothing from this other than forward thinking competitors that have been killing them for 40 years.

This is my fear with the Digital manufacturing coop.  It is run by today's Luddite dinosaurs ... Government and large manufacturers.  They will not look to "creatively destruct" their business, because that is disruptive and could cause many of them to put themselves out of business.  Instead they will narrowly focus on how to incorporate new technology into their now obsolete business models ... how to tweak it around the edges.

What this initiative will is create a bunch of frustrated managers and engineers that will leave and put the coop owners out of business, just like Xerox failing to understand Parc doomed them for 40 years now.

Manufacturing is going to change in ways these companies cannot understand and will fight to accept.

See today's WSJ

U.S. Agencies Consider Redefining Manufacturing
Counting 'Factoryless Goods Producers' Would Boost Size of Industrial Sector

http://online.wsj.com/news/articles/SB10001424052702303546204579439170777269630?mg=reno64-wsj

The modern factory is going to largely disappear.  Those that remain will employ almost no one as they will be nearly 100% automated.  The digital Coop owners cannot and will not accept this.  And they will go the way of record stores.

[Coleman]

He s 100% correct, raise the minimum wage and these jobs will be automated away.

Depends what you are raising the minimum wage TO.

Yes, if $50k, as Chicos suggests, is the new minimum wage jobs would be eliminated.

If you raise it to $10/hr, a historically average minimum wage (adjusted for inflation), and then tied it to CPI adjustments thereafter, the impact would be minimal.

Let's not forget, someone is subsidizing the working poor, one way or the other. Right now, its taxpayers through food stamp and Medicaid assistance, while companies maintain record-high profit margins. I think it would be smart to shift some of that burden back to the corporations, and away from taxpayers.

I agree that the $15 fast food workers are striking for is probably too high. But NO ONE can get by on $7.25 an hour. It is a joke. Raise it to 10.

[mu03eng]

Depends what you are raising the minimum wage TO.

Yes, if $50k, as Chicos suggests, is the new minimum wage jobs would be eliminated.

If you raise it to $10/hr, a historically average minimum wage (adjusted for inflation), and then tied it to CPI adjustments thereafter, the impact would be minimal.

Let's not forget, someone is subsidizing the working poor, one way or the other. Right now, its taxpayers through food stamp and Medicaid assistance, while companies maintain record-high profit margins. I think it would be smart to shift some of that burden back to the corporations, and away from taxpayers.

I agree that the $15 fast food workers are striking for is probably too high. But NO ONE can get by on $7.25 an hour. It is a joke. Raise it to 10.

The question is, what type of jobs are minimum wage jobs right now?  You are correct, no one can get by on $7.25 an hour, but is a job earning that really a career sustaining job?  Raising the minimum wage to a higher level will result in one of two outcomes....either the job becomes more expensive for a human to do than a "machine" and the job will be eliminated or the business will absorb the higher cost through narrow margins(lower income for owners) or increased prices.  Those increased prices than negate any relieve felt by the wage increase.

The individuals that are exists on minimum wage work for the most part are not matched to job opportunities through either a gap in education or a gap in inclination.  Raising the minimum wage does nothing to improve the former(root cause) and exacerbates the latter.

I'm for tying the minimum wage to an inflation index, but lets not act like it's any kind of panacea and in the long run likely makes the mismatch between future jobs and current work force greater. 

[Coleman]

The question is, what type of jobs are minimum wage jobs right now?  You are correct, no one can get by on $7.25 an hour, but is a job earning that really a career sustaining job?  Raising the minimum wage to a higher level will result in one of two outcomes....either the job becomes more expensive for a human to do than a "machine" and the job will be eliminated or the business will absorb the higher cost through narrow margins(lower income for owners) or increased prices.  Those increased prices than negate any relieve felt by the wage increase.

The individuals that are exists on minimum wage work for the most part are not matched to job opportunities through either a gap in education or a gap in inclination.  Raising the minimum wage does nothing to improve the former(root cause) and exacerbates the latter.

I'm for tying the minimum wage to an inflation index, but lets not act like it's any kind of panacea and in the long run likely makes the mismatch between future jobs and current work force greater.  

I don't think its a panacea. As I said before, its just shifting some of the burden away from taxpayers and back on to the employers, back to historically average levels.

People act like raising the minimum wage is actually raising it, when all it does is restore it to old levels. It has not been raised since 2009, which means in real dollars it has gone down every year for five years. They should at the very least raise it to 2009 levels in 2013 dollars, and chain it to inflation (currently about $8 a hour), but if they restored it to 1960s and 1970s levels, it would be about $10.