Machines doing all the laborious and mind-numbing tasks that need to get done to keep society functioning has been the dream of humanity since we put a walkie-talkie inside a Tin Man. Since then, automation has clearly come a long way. Machines with some level of logical thinking have become a staple on production lines around the world.
Recent Advances Bring Machines Closer to Outperforming Humans
But massive recent improvements in artificial intelligence programs, battery technology, and mechanical systems means that almost 100 years after that Tin Man took his first step at the World’s Fair, we may be on the verge of having machines that can perform any task better than a human can. In that time, though, the idea of robots taking all of our jobs has changed from a utopian dream to something that people around the world are deeply afraid of.
Impact of Chat GPT on Jobs and Work Culture
Chat GPT is barely 2 years old now and is still far from perfect. But since its release, we have already seen big changes in how companies allocate jobs, college students cheat on assignments, and in the way people look for work. Now, there is no better way to make yourself look like an idiot than to predict the progress of technology.
Changes Needed to Achieve Ideal Automation
But there is a lot that businesses, governments, and individuals would need to change right now about the way they work to get the ideal version of automation instead of the alternative. Here we have 10 times the amount of robotics as compared to any of our other fulfillment desk centers. We can, uh, process your order 25% faster.
Amazon Drones and Automation Risks
Phoenix, about a month ago, Amazon is now using drones to deliver packages around the Phoenix Metro. The Bureau of Labor Statistics reports at least 42% of US employees jobs are at high risk of automation. It’s very sad. You watch, watch the equipment trickle out, tear things down, throw things away.
Future Role of IT Departments
The IT department of every company is going to be the HR department of AI agents in the future. Okay, so the easiest way to think about what full automation will mean for your own personal financial situation is to realize that we are all born with a portfolio of assets that are actually worth a lot of money.
The Value of Hours Worked Over a Lifetime
Now, unfortunately for all of you would-be Nepo babies, most of those assets come in the form of hours that we have to trade in return for some kind of pay. According to estimates from the OECD and Gettysburg College, most of you watching will effectively sell between 80 and 90,000 hours of your life in exchange for money.
Men Statistically Sell More Hours
Since statistically most of you watching are men, that number is actually more like a 100,000 hours since men are generally less likely to take significant amounts of time off of work to stay home with a family. Regardless of the specifics, even with a relatively modest salary, those tens of thousands of hours are easily worth more than a million dollars.
Increasing the Worth of Your Hours
And if you are clever about getting the right skills, making the right career moves, and kissing the right buttocks, it will probably be worth much more. We probably don’t like to think about it like this because frankly it’s a bit depressing.
Your Greatest Asset is Work Hours, Not Property
But for the vast majority of you watching, your greatest asset is not your home, your share portfolio, or your PSA 10 Charizard. It’s the hours of work you can sell over your lifetime. Anything you can do to improve the value of those hours, be it upskilling, voting for pro-worker policies, or just making sure you’re spending your valuable time well, should make you richer in the long term more than almost anything else, assuming you don’t already have a huge portfolio of other assets or take on too much debt in the process.
Automation Threatens the Value of Your Hours
Now, logically, this means that anything that threatens the value of this asset should be really alarming to you. A machine or program that can do all or even part of your job is such a threat. It’s competition in the market for work that makes your own hours less competitive and, therefore, less valuable.
Studies on Job Risks from Automation
A study by Pew Research found that in total 90% of American jobs were at the highest risk of automation from artificial intelligence. A similar study conducted by Goldman Sachs found that only around 9% of jobs were at similar immediate risk globally. And that is mainly because America has a higher proportion of service-based jobs.
Office Jobs Are More at Risk
The Pew Research study actually found that people with higher levels of education were more at risk of being replaced because they were proportionately more likely to be working an office job. It has turned out to be much easier to replace the people inputting stuff into computers than to replace the people that would require real world outputs from computer operated machines.
The Impact of Job Loss on Workers
Now, 90% of jobs disappearing within a decade would simply be devastating to people who still need to sell their time for money. There hasn’t been a sustained drop in jobs that severe since we started collecting economic data.
Market Flooded with Job Seekers
Even if you are one of the lucky ones that can hold on to a job, the market will be flooded with people who have lost theirs and will be willing to work for anything they can get. If your hours are your greatest asset, then this would be the equivalent of a panic selling event.
Age Matters in Selling Work Hours
One other important variable is your age. Of course, if you are younger, you have a larger holding of hours in your life to sell off. As you age, you should statistically build up actual wealth with more typical investments.
Investing in Automation Technology
If you are broadly invested in the markets, some of your capital will go towards companies who themselves will use it to invest into this automation technology. Already, most of the biggest companies in the world are investing hundreds of billions of dollars into AI technology.
Wealthier Older People May Benefit More
Again, this will mean that wealthier older people with more real investment will likely benefit from widespread automation, while younger people just starting out will be forced to compete with it. But what else is new?
Preparing for the Future of Automation
So yeah, if you want to prepare for this, learn to work with your hands or, you know, maybe try to be independently wealthy. Now, a more realistic solution might be to build up a system where someone’s value isn’t entirely tied up in how many hours of work they have to sell.
Long-Term Planning Needed
Now, that would require long-term planning from both governments and businesses. But assuming we could get everybody on board, it’s time to learn how many works to find out if it’s even viable.
Sponsor Message: Importance of Sleep
This week’s article is sponsored by Eight Sleep. As someone who writes, edits, and basically lives in front of a screen, I’ve learned that productivity doesn’t start with your to-do list. It starts with your sleep.
Using the Pod 4 from Eight Sleep
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Features of Pod 4
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Personal Experience with Pod 4
Since I started using the Pod 4, my sleep has become more consistent, and my mornings totally different. I’m up earlier, more focused, and actually excited to start writing.
Benefits of Pod 4
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Pod 4 Works in the Background
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Tesla Earnings and Future Plans
Last week, Tesla held its earnings call after less than stellar sales and profit numbers. The company is valued like a high growth company, but its financials are now starting to look more like a post-growth car company.
Elon Musk’s Return as CEO
Now, the news that got the most attention is that Elon Musk will be returning to the helm as a full-time CEO again.
Focus on Future Technologies
But the other 99% of the call was dedicated to convincing shareholders that current car sales were irrelevant because the future of the company was in replacing jobs with technologies like full self-driving taxis and their Optimus humanoid robot.
Optimus Robot’s Potential Value
Optimus ultimately will be worth more than the car business, worth more than FSD. That’s my firm belief.
Challenges in Building Humanoid Robots
Making a robot like this that takes the form of an adult human is extremely challenging to build. But if they or some other company can pull it off, it does have two huge advantages over typical commercial robot arms.
Designed for Adult Humans
The biggest benefit is that the world is toled for adult humans. Everything from screwdrivers to reception kiosks are designed with human operators in mind.
Use of Generic Tools by Robots
A humanoid robot could in theory use generic tools designed for humans instead of expensive custom parts that only work with a specific machine.
Replacement Part Issues with Machines
Even something extremely simple like your robot vacuum cleaner has this problem.
If its mop head breaks, you need to go and buy a specialized replacement part from that specific supplier.
If a humanoid robot breaks its mop, it could just go out and get a new one from Home Depot.
Simplifying Automation Design
This means that companies wouldn’t need to design processes from the ground up with automation in mind.
They could just replace humans with humanlike machines.
Cost Advantages of Humanoid Robots
Finally, and perhaps most importantly for the people who will actually be buying things, they will be cheap.
A standard six-axis industrial robot arm, the kind you see in articles of car assembly lines, cost tens of thousands of dollars each.
And that’s assuming you are brave enough to order your advanced industrial equipment off Alibaba.
Realistically, if you are a manufacturing executive setting up an automated production line, you are probably going to source your machines from a more established company.
And once you have purchased the individual arms plus the control system plus installation, you are looking at a multi-million dollar investment at minimum.oid robots would not need to be customized to each use case.
So, they could be generically mass-produced in large volumes.
And since they don’t use a huge amount of materials, there is theoretically no reason why they couldn’t be the same price as an entry-level car.
According to Elon Musk during Tesla’s presentation, the company’s humanoid Optimus robots will sell between 20 and $30,000 once they go into production.
Now, these predictions are always rock solid, and historically, there hasn’t been any reason to doubt Tesla’s time frames or numbers.
But even at $100,000 per unit, these machines would present a compelling investment opportunity.
If they just replace someone making the national average, they would pay themselves off in 2 years.
For Tesla in particular, this is a great opportunity because its brand reputation matters far less for these kinds of business-to-business strategic acquisitions.
Regardless of your own personal opinions of Elon Musk, he has turned away a lot of potential EV customers.
But other companies simply don’t care.
They would buy tools from Satan himself if it improved their bottom line.
That is assuming it actually works.
Critics and Investment Concerns
There are plenty of vocal critics who have argued that humanoid robots may sound great in theory, but for most applications, specialized machines will always be more cost effective in the long run.
Now, even if it’s just an investment bubble, there will be a lot of money for any company that can bring a broadly capable humanoid robot to market.
Problem of Who Will Buy Products
But this presents an even bigger problem for every other company in the world.
If automation makes everybody redundant, who is going to be left to sell to?
Mistake in Business Production Predictions
I actually made a big mistake when I covered that exact question in a article I made last year.
I said that eventually businesses should shift their production offerings to cater exclusively to other businesses or wealthy asset owners who make their income from investment returns rather than exchanging their hours for dollars.
My mistake was that this is literally already happening.
Wealth Concentration in Consumer Spending
About a week after that article went out, a report by Moody’s Analytics found that the top 10% of households by income are now responsible for more than half of consumer spending in the economy.
And that trend is only increasing.
Mechanization Made People More Productive
In the past, mechanization has made people more productive.
Most of the world’s population is richer today than it has been at any point in history.
That’s not because businesses have become more compassionate towards their workers.
It’s because machines have made man-hour more productive and therefore more valuable.
But now technology is not making them more productive.
It’s making them redundant.
Business Strategies Based on Market Changes
So businesses can prepare by either going up market with their products to appeal to asset owners or by going down market to get what they can still get out of people with no other options.
Now businesses are going to do whatever they can to maximize profit for their shareholders.
This is what they are made to do by design.
It’s easy to anthropomorphize greedy companies and blame them for everything.
But blaming a company for maximizing profit is like being angry at a deli slicer for not showing restraint on a haircut.
It’s not really what they do.
That responsibility should fall into governments who theoretically represent the people who will be made redundant.
Political Challenges in Job Creation
My old colleague who now runs the channel Micro made a great article about how mindlessly creating jobs for the sake of creating jobs might be popular politically, but it has made us ill-equipped to deal with changes like this when they present themselves.
As always, I will leave a link to that below.
Short-Sighted Solutions to Automation
The most direct solution would be to ban the use of technology that could replace taxpayer jobs, but that would be extremely short-sighted.
We have already seen the beginnings of this with the dock worker strikes that happened late last year.
The strikes came to a close with a tentative agreement that the ports would not introduce any automated machines that had the potential to take dock worker jobs.
This was a union fighting for the best interest of their workers, which is exactly what they should do.
But long-term, it’s been hard for any group to fight the march of progress.
You can’t ban the internet, the car, or the light bulb just to keep librarians, the horses, and the lamp lighters in business.
If we don’t use advanced automation, other countries will, and international companies will just move their operations there instead.
Encouraging Technology with Benefits for People
A better solution would be to encourage this technology, but make sure that the people stand to benefit from it.
Unfortunately, this technological shakeup is happening at a time when we can least fiscally afford it.
Optimistic ideas about universal basic incomes or capital reallocation might work, but they will cost a lot of money.
A lot of money that will be hard to get without significant new taxes.
Unfortunately, the same people that stand to benefit the most from a fully automated future would also be the biggest targets for those taxes.
Destabilizing Impact of Technological Changes
Prime technological changes have always had a impair impact on societies, from the fog engine to the internet.
But combining that with an already unstable economy is very bad.
To put it bluntly, this technology could give us a Jetson’s future, but only if we are valued at more than the hours in our day, which we will need because not only is AI getting smarter every day, it might also be making us dumber.
