“Right now, the human worker who does, say, $50,000 worth of work in a
factory, that income is taxed and you get income tax, social security tax, all
those things. If a robot comes in to do the same thing, you’d think that we’d
tax the robot at a similar level.”
Those were part of the comments made just two weeks ago by
Bill Gates during an interview with the Seattle Times. It did raise some eyebrows but he was
serious. Does he have a point?
From a Wall Street Journal article (By STU WOO Feb. 27,
2017):
“Within 30 years, artificial
intelligence will be smarter than the human brain… according to Masayoshi Son, chief executive of SoftBank
Group Corp., who says that supersmart robots will outnumber humans and
more than a trillion objects will be connected to the internet within three
decades”.
More and more production jobs are
now done by robots. The auto industry is a good example where robots do a variety
of jobs that require repetitive but critically accurate and consistent results.
More importantly, they can sustain that same level of performance throughout
the entire 8-10 hour shift without taking coffee or bathroom breaks. They paint
to the thickness of thousandths of an inch specification without a respirator
or goggles; weld to the prescribed thickness uniformly with unerring accuracy
without missing a joint or seam.
There is no question robots will
outperform humans in all repetitive tasks. Sustained productivity with very
little downtime saves corporations a lot of money from robots that cannot/will
not file grievance, let alone form unions, or ask for paid vacation or take
sick leave. What Mr. Gates was referring to, if I understood his comments, was
that for every job a human is replaced by a robot, the country loses a tax
payer. In cases where a single robot
replaces the job of three or more people, the tax base loss is not only visibly
exacerbated, the revenue loss is compounded.
Automation is going to replace a
lot of menial and service jobs. Wendy’s,
the latest among fast food chains to do so, just announced a nationwide plan to
set up self-order kiosks to save on rising labor costs. Customers are already filling their own
drinks and putting away their trash before leaving; is it too farfetched that
someday they may have to flip their own burgers or grill their own chicken?
Speaking of chicken, high tech poultry
management is such that eggs go straight from hens to the grocery store
untouched by human hands. The consumer is likely the first to touch the eggs if
he or she bothers to cursorily inspect the eggs in their cardboard or Styrofoam
containers before placing them into the shopping cart. Often,
the first time the egg is ever touched is right at the moment before it is
cracked into the frying pan or dipped into boiling water to the prescribed time
for hard or soft boiled. Even hatching eggs that are sold to commercial and
retail outlets are automated to the point where eggs go from the hatchery to temperature
controlled incubating rooms, monitored, then hatched devoid of the hen’s
attention. The only time they’re touched
by a human is when a worker quickly inspects them for their gender for about
three seconds who then unceremoniously toss them into separate chutes that take
the unsteadily flapping chicks onto conveyor belts, after which an electronic
counter segregates them for packaging.
Their first feeding will not occur until they reached either a
commercial poultry or retail outlet (where chicks are sold individually to
small farmers or rural homeowners). The
chicks will have reached their destinations after hatching and processing
within 24-48 hours.
Economic globalization aside,
technology still accounts for much of the differences in how businesses are
conducted around the world. Businesses in
the developing countries are coping a little differently from those in advanced
areas. Last December at a party I had an
interesting conversation with a Filipino businessman whose privately held
corporation was engaged in poultry. It
is still a labor intensive business there.
So, what they lack in automation is made up for by streamlining the
workers’ activities with time and motion studies, believe it or not, as they go
about replenishing feed and water, cleaning the coop, processing of the meat,
etc. Apparently they were able to
optimize productivity to the extent that they could without relying on machines
and computer controls. There are no automated feed and water dispensers, or
computer controls for humidity and temperature.
Analog data processing is still practiced as far as keeping tab on the
number of days it takes to get the chicken to the target weight, how much feed
is needed per pound of meat after so many days, mortality rate, etc. It is a
huge business that requires a staff of veterinarians attending to the welfare
of the birds. They recognize that monitoring for avian disease, prevention and
immediate quarantine are crucial to their success on any given year. Cost-saving ideas are always discussed,
including considering at one time the idea to do away with security guards. There
is a fixed cost to maintaining 6-8 security guards, plus a supervisor, so they
weighed that against the variable costs due to losses from pilferage and
theft. After careful analysis they
figured it a wash so they opted to keep the guards. The businessman confessed that
the decision was made more out of humanitarian consideration. He
reminded me that automation and robotics constitute a small slice of how things
get made and processed in much of the world, outside of the industrialized
countries. He may be right because what we observe here in the U.S., for
example, is not quite widely practiced (and prohibitively costly to businesses)
in Asia and Africa which account for 70% of the global population; the
remaining 30% is split between Europe, the Americas and Oceania. Where
labor cost is still cheap automation is not so easily justifiable; except perhaps
on exportable goods that demand consistency in quality.
Let’s get back to what Bill Gates
is concerned about. Trade imbalances aside, Europe and the U.S. need to
automate to compete and produce higher quality goods, but China have automated
already for much of the merchandise they export, thanks to U.S. and European
companies that moved their production there.
And Chinese labor cost is way comparably low {for repairing and
maintaining the machines}. So, jobs have
been lost here while automation is lowering the tax base. Bill Gates is perhaps correct to lament on
the issue but corporations will push back because paying income taxes for the robots
negates the whole idea of cost savings from automation. Besides, the companies say they spend a lot
of money in research towards designing and building the robots. And how much
does it cost to raise and educate a human worker? The Department of Agriculture’s recent
estimate on the cost of raising a child up to the age of 17 is $233,600. That
does not include what taxpayers pay for their public high school education and
if we add college costs to that, a human worker does cost so much; however,
labor unions and college-educated workers can claim that corporations do not
shoulder those costs. Does the corporation have grounds to bring up the cost of
a robot?
It is undeniable that indeed the rise in automation and robots doing
work that humans used to do will result in lowering the number of people paying
income taxes. Consumers benefit but the
government will have less to provide for infrastructure and services? I plead
ignorance on this one and let the economists debate it.
What about Masayoshi Son’s
prediction? It only compounds everything, doesn’t it? Some serious folks take it to an even
hyper-concern only science fiction writers used to think about. Take the latest
from Bloomberg, below:
Bloomberg Technology’s Dina Bass
(March 2, 2017, 5:00 AM CST) published recently: “AI Scientists Gather to Plot Doomsday Scenarios (and Solutions)”
“Researchers, cyber-security experts and policy wonks ask themselves:
What could possibly go wrong?”
“Artificial intelligence boosters
predict a brave new world of flying cars and cancer cures. Detractors worry
about a future where humans are enslaved
to an evil race of robot overlords. Veteran AI scientist Eric Horvitz and
Doomsday Clock guru Lawrence Krauss, seeking a middle ground, gathered a group
of experts in the Arizona desert to discuss the worst that could possibly
happen -- and how to stop it”.
Suddenly Bill Gates’ concern
about robots eroding the tax base is nothing compared to “an evil race of robot
overlords”. How did we go from robots
taking over our jobs to super-intelligent cyborgs.
Where this word used to come from combining the word cybernetics and organism, thus
giving us the image of a half-robot, half human, an alternatively accepted
definition is as follows:
“Cyborg, a compound word derived
from cybernetics and organism, is a term coined by Manfred Clynes in 1960 to
describe the need for mankind to artificially enhance biological functions in
order to survive in the hostile environment of Space. Originally, a cyborg
referred to a human being with bodily functions aided or controlled by
technological devices, such as an oxygen tank, artificial heart valve or
insulin pump. Over the years, the term has acquired a more general meaning,
describing the dependence of human beings on technology. In this sense, cyborg can be used to characterize anyone
who relies on a computer to complete their daily work”.
Now, just like that, modern
society is populated by cyborgs. In
fact, one would have to be a Masai cattle herder in Kenya and Tanzania, or someone
from the jungles of Papua, New Guinea, or from remote rainforests in Brazil to
not be associated with cyborgs.
Henceforth, earth’s population will be split into two main categories of
cyborgs and plain homo sapiens. Next
time you order fast food or apply for a driver’s license, remember you are
being served by a cyborg.
We’ll talk about the robot overlords
on the next blog…
No comments:
Post a Comment