Tuesday, August 10, 2021

Demographic Futures: Too Many People, Too Few Jobs, or Too Many Jobs, Too Few People

Predicting the future has always been a risky endeavor.  Yet, ignoring the possibility of future disruptions provides risks as well.  Here we will discuss two visions of the future which demand some consideration on our part as to how to respond to the foreseen changes, should they occur.

The first future is provided by Daniel Susskind in his book A World Without Work: Technology, Automation, and How We Should Respond.  The author details how concerns about technology (automation) would replace humans as workers had proved to be false in the past.  Tasks were certainly automated, and particular types of activities faded in importance, but workers generally found other roles to play in a growing economy.  However, artificial intelligence (AI) developments in recent years have vastly expanded the potential reach and disruptive force of that technology.

“AI research, in fact, began many decades ago, with an initial burst of enthusiasm and excitement, but that was followed by a slump into a long, deep winter when little progress was made.  In recent years, though, there has been a rebirth, an intellectual and practical revolution that caught flat-footed many economists, computer scientists, and others who had tried to predict which activities machines would never do.”

Early AI was based on trying to program human-like logic into systems in order to compel the numerical system to behave like a human.  Current techniques essentially allow the numerical system to teach itself how to perform the task targeted by providing it with prodigious amounts of trial-and-error opportunities.  The impressive thing is that the system can work startlingly well; the troubling aspects are that the system can develop biases from biased data, just like a human, and the logic used by the numerical system is opaque to humans.  We do not know exactly how it arrives at results.

The result will be an economy where there will be jobs which require great amounts of learning and skill, but only a small fraction of the population will be capable of performing, and a slowly vanishing number of jobs that cannot yet be automated or are not worth trying to automate.

“…if you picked up this book expecting an account of a dramatic technological big bang in the next few decades, after which lots of people suddenly wake up to find themselves without work, you will be disappointed.  That scenario is not likely to happen: some work will almost certainly remain for quite some time to come.  But, as time passes, that work is likely to sit beyond the reach of more and more people.  And, as we move through the twenty-first century, the demand for the work of human beings is likely to wither away, gradually.  Eventually, what is left will not be enough to provide everyone who wants it with traditional well-paid employment.”

Susskind seems to believe that technology will continue to produce something for someone at a level that can produce continued economic growth as wage-earning consumers fall by the wayside.  This productive economy will produce the bounty that will allow these unemployables to be provided the means of sustenance.  His favored solution is a modification of a universal basic income scheme (UBI) which he labels a CBI, a conditional basic income.  The term “conditional” is appended to recognize a need, both on the part of the needy and the non-needy to see the income produce some contribution to the community attached to it. 

“In a world with less work, it will no longer be possible to rely on the labor market to solve the distribution problem, as we have seen—or this contribution problem either.  So how can we create that sense of communal solidarity?  A big part of the answer must involve membership requirements attached to the basic income.  If some people are not able to contribute through the work that they do, then they will be required to do something else for the community instead; if they cannot make an economic contribution, they will be asked to make a noneconomic one in its place.  We can speculate about what theses tasks might turn out to be; perhaps certain types of intellectual and cultural toil, caring for and supporting fellow human beings, teaching children how to flourish in the world.  It will fall to individual societies to settle on what these contributions should look like…”

Susskind’s CBI begins to look more like a guaranteed jobs program, which could be a more effective point of departure than a UBI to solve the problem he envisages. 

Note that Susskind suggests a gradual increase in the unemployable over the remainder of this century as economic and political responses gradually occur.  We have about eight decades remaining in this century.  Is it reasonable that nothing will occur in our rapidly evolving world that would upset his neat little picture?  Surprisingly, population growth can operate on that timescale in a manner to counter his projections.  That viewpoint is presented by Darrell Bricker and John Ibbitson in their book Empty Planet: The Shock of Global Population Decline.

These authors believe the accepted population projections that emerge from the UN too closely follow long-term trends and are missing dramatic changes in fertility levels that have become apparent in recent years.  In fact, their population projections suggest that in the future technology will not pose a threat to massive numbers of workers, but rather, it will provide a solution to a scarcity of future workers. 

“The great defining event of the twenty-first century—one of the great defining events in human history—will occur in three decades, give or take, when the global population starts to decline.  Once that decline begins, it will never end.  We do not face the challenge of a population bomb but a population bust—a relentless generation-after-generation culling of the human herd.  Nothing like this has ever happened before.”

“If you find this news shocking, that’s not surprising.  The United Nations forecasts that our population will grow from seven billion to eleven billion in this century before leveling off after 2100.  But an increasing number of demographers around the world believe the UN estimates are far too high.  More likely, they say, the planet’s population will peak at around nine billion sometime between 2040 and 2060, and then start to decline…By the end of this century, we could be back to where we are right now, and steadily growing fewer.”

Most of the developed nations of the world have fertilities (the number of children produced per female) less than the required 2.05 to maintain population level.  In a few cases this has already led to population decline, but the first symptom recognized is the aging of the population as the paucity of children shows up as a decline in the working age population.  Countries who are worried about this trend have tried to encourage greater fertility, but with little or no success.

“Some of those who fear the fallout of a diminishing population advocate government policies to increase the number of children couples have.  But the evidence suggests this is futile.  The ‘low fertility trap’ ensures that, once having one of two children becomes the norm, it stays the norm.  Couples no longer see having children as a duty they must perform to satisfy their obligation to their families or their god.  Rather, they choose to raise a child as an act of personal fulfillment.  And they are quickly fulfilled.”

Consider an extreme case, that of South Korea where this source puts the fertility rate there at 0.9.  And there is evidence emerging that the pandemic is driving fertilities even lower.  At that level, the current child-bearing generation will provide a new childbearing generation with less than half the people.  This kind of dynamic can lead to rapid changes in national population.  One estimate has the working age population dropping by 50% in 45 years, while the total population falls by about 5% per decade throughout this century.

For comparison, the US has a fertility level of 1,7, the UK 1.6, Italy 1.3, Germany 1.5, Japan 1.4, and China 1.7.  It is unlikely that the distant future will look anything like the past. 

Both books include with their projections the plea that economists and politicians begin planning to accommodate their particular futures.  We should thank the authors for providing us with interesting scenarios, but the future might be written by forces which they had not even considered.  Neither book was in a position to consider the influence of a long-term pandemic.  The latter volume considered a declining population a benefit in limiting global warming without considering details.

In an earlier, more benign time, just a few years ago, we could ignore pandemics and think of climate change as a problem for a future generation.  However, we now know that the Covid problem can get even worse and is likely to be around and troubling indefinitely.  Also, the scientists working on the UN’s Intergovernmental Panel on Climate Change (IPCC) have just stopped underestimating the effects of pouring carbon into the atmosphere and have finally spoken truth to power.  Our concerns about global warming began with timescales of centuries; then it became a matter of decades; now each year matters.  From a New York Times summery

“On Monday [today] the Intergovernmental Panel on Climate Change, a scientific body convened by the United Nations, released a major new report concluding that the world cannot avoid some devastating impacts of climate change, but that there is still a narrow window to keep the devastation from getting even worse.”

“Under most of the scenarios discussed in the report, warming will continue well beyond 2040, through the remainder of the century. In the worst cases, where the world does little to reduce emissions, temperatures by 2100 could be 3 to 6 degrees Celsius (5.5 to 11 degrees Fahrenheit) above preindustrial levels. That would have catastrophic consequences.” 

Yes, it would seem some planning is in order!

  

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