What is causing this poverty, economic inequality and insecurity?
The changes – and widespread poverty – are being caused by two big and unstoppable forces:
1. Globalization
Globalization is where someone in, say, America or Europe, as an example, who is accustomed to earning $25/hour to $40/hour…
... loses his/her job because it’s now very easy to give that job to someone in China or Vietnam who is willing to do the same job for $1/hour to 2/hour.
In the above example, if you live outside America, you might say, who cares what happens in America? You should care, because it WILL affect you too, as I’ll explain in a moment.
As the jobs move away rapidly, the people losing their jobs hardly have an opportunity to notice what’s happening, and have no time to retool / reeducate themselves.
The changes happen so fast that schools, governments and society have little ability to react, if at all.
Everyone is left feeling overwhelmed. And many are feeling angry.
2. Automation
Automation is where jobs are replaced by software, or robots.
This is happening around us very quickly. For example:
When Skype (with only a few hundred employees) is all that’s left of millions of jobs that once supported long distance telephone companies around the world….
Or when Walmart, using smart centralized “big data” wipes out millions of mom and pop shops…
… only to have Amazon do the same to Walmart...
Or when digital music, distributed over the web, decimates the entire global music industry…
… or e-books wipe out bookstores around the world…
… or millions of travel agents have been replaced by a few dozen travel websites…
… you get the picture. Software and automation are wiping out jobs.
20 years ago, if you predicted these changes would happen this quickly, you would have been laughed out of the room.
But wait. It’s only about to get worse, as the pace accelerates.
The rate of change is increasing.
In the next few years, the effects of automation will be felt in even bigger ways. Need an example?
Let’s take a look at the #1 most popular job in many countries around the world (the job that more people do than any other type of job) -- the U.S. included:
The number one type of job is driving a vehicle. Truck drivers, bus drivers, taxi drivers etc.
As you probably know, self-driving automated (driver-less) cars are on the way.
Massive competition is underway between all the car companies in addition to the tech giants such as Google, Apple, Uber, etc.
In the next decade, most drivers will be replaced by self-driving vehicles.
In fact, it’s easy to predict that, soon after self-driving cars become the norm, in many/most parts of the world, it will slowly but surely become illegal for humans to drive a car on public roads….
… because humans, unlike computers, don’t have hundreds or thousands of sensors like computers can have -- noticing every little movement on the road and talking to all other computerized vehicles in the vicinity at the same time.
It will simply be too dangerous to have humans driving on those same roads.
Did you know that motor vehicle accidents is now the #1 leading cause of death for young people globally.
Source: The World Health Organization
Road traffic injuries is the number 1 cause of adolescent deaths globally, and the second largest cause of illness and disability for them.
Humans will not be able to compete with the safety that automated cars can provide; so driving on most public roads will likely eventually become illegal around the world, in an attempt to drive down road traffic injuries and death.
If you look at most of the other top type of jobs, it’s getting easier to see the same pattern:
Most other jobs too, will be wiped out by automation.
It takes very little imagination to see that eventually most job, from doctors to waiters to teachers to factory workers….
… will be replaced by more efficient, harder working, cheaper and more effective software applications and robots.
Great wealth will be (and IS already being) generated
The companies that bring these technologies to the world will create massive wealth for their founders, major shareholders and a few key employees.
But for everyone else, these technologies will wipe out their jobs; they and their labor will simply no longer be needed.
The result will be unemployment like we have likely never, ever witnessed before – not even in the greatest of depressions.
In the past, when technology replaced workers, the workers eventually found new jobs.
For example, when new technology (such as tractors, fertilizer, etc.) pushed workers out of the farms, those folks moved on to all the new factories that new technology was enabling.
But this time, automation is coming to everything so quickly that the world will hardly be recognizable in just ten or so years.
Summary: Globalization and Automation are about to usher in a new era of unemployment, poverty and inequality.
The effects of widespread and sudden poverty
As if poverty wasn’t a big enough problem by itself, it (poverty) creates another massive problem -- a problem even more damaging than widespread poverty -- which we will discuss in an upcoming post.
In the meantime, we would all love to hear your thoughts…
… on the effects of globalization and automation in your country….
… and related topics.