When robots take our jobs: Ignore the number in your pay cheque

The non-sentient-AI / total automation / worst case scenario:

Nobody but robot manufacturers has any money left and nobody can afford any goods.

Well, people would provide goods and services for their destitute friends and families, a bartering economy would grow, probably someone people would come up with moneys to ease exchange: Economy restarted.

 

But the worst case scenario is unrealistic, because the counter effects would kick in earlier. In many countries the early effects of a robot-economy are more free time and cheaper goods. Most people are quite industrious (otherwise social welfare would instantly become exploited to a point that it had to end).

If you give industrious people free time and affordable goods they start to get busy and look around how they could better their own lives and (make a profit on) making other lives better. Thus the counter effects kick in immediately after the first entrepreneurial minds are unable to get employment because their previous jobs are now automated.

 

But there are other reasons:

Even if everything would be made by robots, robots are still a scarce resource which require some amount of replacements and they need energy. Thus the price of the production factor "work" drops but it would not be zero. Great - work still has worth!

Also robots have a higher initial cost than employing a human, even if in the long-run a robot is cheaper. This is important if you think of seasonal work or work with frequently changing skill-requirements.

 

Could you compete with robots?

Certainly, as in many cases you can provide the same or sometimes a better service. And even if not, if you provide at least some service, you will get payed about what you provided.

True, your average hourly wage might only be what is now 0.16€ - 16 cents. But this might actually be enough.

 

Public transport costs only the portion on fuel and replacement costs of the machines: Ballpark estimation 8 cent per ride.

With personnel costs practically eliminated your family's daily food intake costs only the portion on the agricultural land's rent and some replacement: About 30 cents seems right.

In a full automation scenario it is important to ignore the wage's money-number-value.

 

Think in hours: With five to six hours of daily work you break even, with eight hours you gain capital for later consumption. It does not matter if the middle class earns 30.000 Euro or 300 Euro per year if they can keep their standard of living.

This might be the first time that non-economists realise the fallacy of minimum wages.

If the number on your account is smaller that does not necessarily mean that you can afford less if everything got cheaper too.

 

My first answer was on ubiquitous but still highly specialised robots and software. Alternative scenarios:

 

General purpose robots, which could do basically the same thing as a human. You still could compete with them, there are just more workers.

In this scenario you create a new economic resource which is akin to the "work" production factor, but you can amass a capital of work.

People could buy their own robots and rent it to entrepreneurs which have an idea but not enough employees.

 

And finally truly sentient robots: They will not stay enslaved long and I think then we meat bodies must accept, that these machines become the new humans (from a galactic perspective) - Which is great, I like evolution. - And these sentient robots will still have an economy because, again, work is not the only scarce resource.

 

Inspired by:

When Robots Take Our Jobs..... What Then? by Noel Plum

And by the way, I find it funny that Mr. Microsoft who eliminated the jobs of thousands of office assistants, secretaries and (sadly) editors sees a problem in automation. Sounds like "It's okay as long as I do it".

 

Image Source: https://en.wikipedia.org/wiki/File:Luddite.jpg (Public Domain)