Is the solution for America’s labor shortage Artificial Intelligence? | In Focus

Wide-spread automation will exacerbate the separation of economnic classes.

‘The pace of change seems irrepressible; new technologies will remake societies. All people can do is figure out how best to cope.” (Lant Pritchett. “People Over Robots: The Global Technology Before Automation”: Foreign Affairs March/April 2023)

It’s common knowledge in America that there is a major labor shortage, and millions of workers are needed. The solution, according to billionaires like Jeff Bezos, is to automate trucks to make them self-driving with artificial intelligence (AI). Technology will solve the labor shortage.

This argument is a dumb idea.

The problem with this kind of thinking is two-fold. First, we are decades away from creating self-driving automobiles and trucks, if at all. Secondly, there are millions of truck drivers worldwide who would be willing to drive those trucks if only they were allowed to come into this country.

The American truck driver’s median wage is $23/hour driving long-haul semis. In the developing world truck drivers make about $4/hour. What keeps them from filling the shortage in the U.S. is immigration laws that restrict their entry? If companies like Amazon could hire from overseas, even at the higher wage, the technology that destroys these jobs would be unnecessary. It would also help alleviate poverty worldwide.

This issue is also true in health care. According to a 2021 report by the financial services company Mercer, there will be a shortage of 660,000 home healthcare aides, lab technicians and nursing assistants by 2025.

Immigration policies “encourage a terrible misdirection of resources. In the world’s most productive economies, the capital and energies of business leaders (not to mention the time and talents of highly educated scientists and engineers) gets sucked into developing technology that will minimize the use of one of the most abundant resources on the planet: labor.” Focusing on AI is a waste of money, while it also helps keep the poorest poor. (Pritchett)

The counterargument is that economic immigration potentially takes jobs away from Americans and creates social tensions due to cultural differences. There is also the danger of exploitation of these immigrants by greedy corporate owners.

True enough, “but choosing devices over people is a mistake.” People should come before profits, especially when the costs of producing AI are so high.

Some argue that emigration would produce a “brain drain” in the country of origin. Pritchett’s retort is that “there has never been any evidence that outward migration in general has harmed a country’s prospects.”

“Many manual nonroutine tasks are difficult to either automate or offshore, as they require the direct physical presence of the worker, and so these jobs remain in demand….” These jobs are found in the food preparation industry, janitorial maintenance, in-person healthcare assistance, and security.

Due to the rising level of education and decreased fertility in the U.S., these types of jobs have experienced labor shortages. Data from the Bureau of Labor Statistics forecasts that between 2021 and 2031 more than 5 million jobs for non-college degreed occupations will be needed.

Government has enormous power to influence economic decisions, based upon the restrictions it places upon businesses. According to the author, “The gulf in the wages is the largest policy-induced price distortion in the world today (and probably in all of human history). Barriers to migration generate an artificial scarcity of labor…. Necessity may be the mother of invention, but false necessity is the mother of dumb inventions.”

When liquor was banned in the 1920s, it created whole new illegal industries in the production of alcohol. Bootleggers and rumrunners emerged to satisfy that need for alcohol — an example of dumb inventions.

The counterargument is that increasing immigration will cut the wages of native workers. Pritchett argues that this danger can be mitigated by the Earned Income Tax Credit which can completely offset those losses by giving tax deductions to workers. “Automation, in other words, is not inevitable but driven by the artificial scarcity of labor.“

Pritchett concludes his article by arguing that “Rich and democratic societies need to stop blindly pursuing technological advances that economize on precisely what is abundant around the world.” People should be more important than machines. Artificial intelligence is a solution in search of a problem.