Where do low-skilled workers fit, in a future of automation?

I recently watched a documentary on Andrew Carnegie, the U.S. steel tycoon of the late 19th century. It detailed his life as a poor young immigrant from Scotland, who built one of the biggest companies in the world. He’s now largely remembered as being both the wealthiest man of his time and a great philanthropist, whose credits include the prestigious Carnegie Hall and Carnegie Mellon University.

But interestingly there was a dark side to this great man. His company, Carnegie Steel in Pittsburgh, was the setting of one of the bloodiest strikes in U.S. history, the Homestead Strike in 1892, which lasted 143 days, and resulted in the death of ten men. One of the reasons of the strike was the company’s decision to decrease wages when it was making record profits. Benefiting from the industrial revolution, Carnegie and his chairman Henry Clay Frick were both in favor of replacing human workers with machines, saying that machines don’t demand wage increases and never sleep.

The industrial revolution saw the replacement of low-skilled human workers by steam engines and machines. Manufacturing being the first ones to bear the brunt of this change. Now in the age of AI (artificial intelligence), and low-skilled workers are again the first ones being impacted. Wal-mart and other supermarkets are already testing robots used to greet people and check inventory on shelves. Human greeters are replaced with robot counterparts, who amuse children and adults alike. Self checkouts went from an annoying presence in McDonald’s to proliferating within every major retailer.

There are already robotic chefs and baristas being tested. While their hefty price-tags keep most retailers away, it’s only a matter of time before these technology become cheap enough for mass consumption.

The advancements in automation leave low-skilled workers in a tough spot, resulting in an oversupply of labour, stagnating wages for decades, and creating a huge boom in the post-secondary education, as workers scramble to become better educated and more qualified for jobs that are less likely to be replaced by machines.

Politicians like Elizabeth Warran in the U.S. are calling for higher corporate taxes and a new wealth tax in an attempt to shrink the growing wealth gap. While this may appeal to some, in the end corporations and the wealthy will always figure out a loophole. And it’s always better to reward than to punish. Perhaps a dual reward/penalty system could work. For example, for every job that a company cuts, as long as the company is in profit, it should pay a tax equivalent to 5 years salary as compensation for social benefits the now unemployed person will claim. And for every new job a business creates, it can gain a tax incentive equivalent to 5% of the salary for the position, effectively making it cheaper to employ human labour. Hopefully this will help normalize the adjustments needed in a future world driven by A.I.

But with a painting created by A.I. selling for over $430,000 at auction, is any industry truly safe?