If you are wondering will robots take my job, the short answer is YES! The time-frame though depends on what kind of job you are currently doing. And how it would change going forward.
This weekend I ended up re-watching one of my favorite movies as a kid; Terminator 2 – Judgement Day. When the movie was released, I was fascinated not only with the plot but also with the extensive use of CGI. It won the 1992 Academy Award for Best Visual Effects. The visual effects foreshadowed the future of work with robots taking over jobs.
What Jobs Will Robots Take Over In The Future
When we talk about the future of work and will robots take my job, we are actually referring to Automation. Not Terminator type robots walking around.
Technological singularity is a fascinating topic for nerds like me to geek about. Stephen Hawking and Elon Musk have expressed concerns that full Artificial Intelligence (AI) could result in human extinction.
However, the research is currently focused on machine learning and pattern recognition. I do not see technological growth becoming uncontrollable; resulting in self-aware robotic overlords in our lifetime.
If we do get Singularity; then all bets are off. And we have bigger problems on our hand than figuring out how likely is it that robots take my job.
Any job which uses a manual or has a set of rules; can be easily automated. And replaced by robots.
Automation Killing Low Income Jobs
If your job is labor intensive and at the bottom of the labor pool; automation will make you redundant. Technology will replace human workers.
This has been a know fact for several years. As automation picked up and assembly lines became more common; a lot of jobs were lost.
Charlie Chaplin depicted this brutal reality in the 1936 classic Modern Times.
Low income jobs most susceptible to automation are physical ones in predictable environments. Workers who operate machinery, prepare fast food, collect tolls, cashiers, etc .
New England dairy farm are already using milking robots as per The Boston Fed.
“The jobs that will go away are the jobs that are routine in nature,” says Joseph B. Fuller, professor of management practice at Harvard Business School.
The most vulnerable jobs are low-skill positions in very structured and predictable settings.
Automation Killing High Income Jobs
With machine learning and pattern matching, the future of work looks grimmer.
The high-end job of a radiologist can now be easily automated. MDs earning between $300K to $600K may soon find themselves unemployed. IBM already has a radiologist-trained artificial intelligence (AI) tool deployed.
Because of the Coronavirus pandemic, all in-person doctor visits have been discouraged. In fact, Centers for Medicare and Medicaid services is broadening the usage of Telemedicine. Why would I pay an astronomical amount to have a video chat with a doctor in Stanford hospital for a routine issue when I can get the same level of service from a doctor in rural area or even overseas? I see this as an area ripe for disruption now that everyone has become more comfortable with telemedicine.
I met the mortgage underwriter during the Cash-out refinancing process. His job was to take my numbers and plug it into a calculator. I am sure the mortgage underwriter; earning north of $80,000 may also be on the list of jobs likely taken by robots.
Creatives are not immune to the robots taking over their job either. Artificial Intelligence is now capable of generating convincing-looking, yet entirely fake, pictures of people. Icons8 has 100,000 AI Generated Faces for free usage. Imagine if you are a head-shot model. Now your job will be replaced by robots.
Even writing articles and blogs can be now done by robots. A college student made a fake blog post using an AI text generator and it was upvoted to the top of Hacker News by people who thought it was real. This demonstrates the strength of GPT-3, which has shown itself to appear convincingly human under some circumstances.
Although these jobs pay much higher than minimum wage currently; most of them involve rules. Any job involving rules can be easily replicated with an algorithm. And automated.
Let us broadly analyze the financial impact of jobs being replaced by robots along 3 areas
Impact of Robots Taking Over Jobs On Human Capital
I am a huge proponent of investment in Human Capital. This is the only investment you have the highest ability to control.
If you are already wondering, how likely will robots take my job? The answer depends if your job can be automated
You should look at your current job and analyze what part of your work is rules driven.
Is there a manual to be followed or a step-by-step guide for your job?
If you go on vacation, are you able to write down how exactly anyone else can perform in your role?
If you answered yes to either of the 2 questions, you should plan for a future where your job is automated.
The future is already here – it’s just not very evenly distributed.William Gibson‘s
How To Robot Proof Your Job?
Contrary to popular belief, a college degree will not save your job. I want to prevent you from wasting thousands of dollars pursuing this myth. Also, not all college degrees are created equally.
The jobs that are safe from robots and the effects of automation involve
- Problem identification
- Creative problem solving
- Interpersonal skills
- Dealing with animals and humans
While the above is a broad set of skills, one can figure out jobs involving one or more of these skils.
You could be the actual engineer working on automating jobs. Developing the algorithm to create systems will ensure you are always in demand.
Or you could be an occupational therapist identifying a patient’s need and how to solve it. A combination of empathy, interpersonal skills, influencing, negotiating will all be required when dealing with humans in pain.
Sales involves transference of feelings. Individuals buy based on feelings. As a salesperson, you need to identify the buyer’s pain point and use a combination of skills listed above to close the sale.High income jobs like Radiologist are also vulnerable to automation. Develop these 9 skills to robot-proof yourself Click To Tweet
Benefits Of Robots Taking Over Jobs
Instead of fighting the technological wave, embrace it. There are several jobs which are either dangerous or monotonous for human to perform. Having robots take over these tasks would be beneficial in the long run.
Safety: There are a number of jobs currently performed by humans which are quite dangerous such as deep sea exploration or mining. Having programmable machines work on these activities instead of humans would be better.
Quality: Manufacturing requires production of large quantities of goods Since a machine can be programmed to perform repetitive tasks; the quality of goods would be high. Wastage would be eliminated.
Job Satisfaction: Eliminating the mundane parts of the job would let humans focus on tasks which are better suited for their skills.
New jobs will arise as a result of technology which will be more exciting. And propel the human race even further.
The American Economic Association published a paper titled “Automation and New Tasks: How Technology Displaces and Reinstates Labor“
The future of work and the workforce will depend on the balance between labor replacing technologies – those that supplant human brawn or rote repetition – and labor reinstating technologies, that generate new tasks at which humans have a comparative advantage.Daron Acemoglu and Pascual Restrepo
Stanford Business at the Future of Work Forum explored this topic. They concluded that the fears that rapid advances in artificial intelligence, machine learning, and automation will leave all of us unemployed are vastly overstated.
While there are net positives at an aggregate level; they may not provide the same benefits to everyone equally. jobs may increase going forward but it is not easy for workers to retrain. Hence we still need to prepare; so we are not personally impacted.
Impact Of Robots Taking Over Jobs On Real Estate Investments
For a long time we have known that low skilled jobs are being automated. Detroit faced job cuts brought about by automation. Demand for middle- and lower-skilled workers declined as the auto industry cut thousands of jobs.
The paper from the New York Fed analyzes Why Are Some Places So Much More Unequal Than Others
Detroit and Youngstown have experienced decades of decline. In these places, wages did not grow for the bottom 50 to 75 percent of all workers. And in some cases wages even declined. This stagnant wage growth for the vast majority of workers in these places has been devastating.
The conclusion by the paper is that wage inequality has increased significantly in the United States since the early 1980s. This trend
has been driven primarily by technological change and globalization
Importantly, the economic effects of technological change have been geographically concentrated. After all, Best Place for Technology Jobs is still San Francisco Bay Area.
Technology and Globalization are depressing wages at the bottom end of the labor pool while accelerating wages at the top end.
This has broader implications on the property values. I do continue to see increasing gaps between regions. Accordingly, you need to plan when making real estate investments.
After all, due to the high transaction costs; real estate investments are not very liquid. If a certain geography falls out of favor, your property value would decrease.
Many folks have this ongoing conundrum with respect to the cost of investment in HCOL (high cost of living) areas. When you invest in San Francisco real estate; your cost is significantly higher compared to living in Detroit.
If automation pushes more income to the higher end of the curve, your real estate investment would be better protected in regions which capture the benefit of automation.
I am a fan of rental real estate in-spite of making mistakes with crowd funded real estate. However given the current environment, I would be hesitant to invest in tier 4 and 5 cities.
Impact Of Robots Taking Over Jobs On Stock Investments
A lot of people are scratching their heads wondering why is the S&P 500 at all time highs in the midst of a pandemic and the worst recession.
If we look under the hood, the S&P 500 out performance is entirely driven by 5 stocks.
If we assume that markets are forward looking, there is a reason for the top 5 companies to be at all time highs. As per the tweet above, the top 5 are generating 80% of earnings per share growth.
Stock prices of a company typically increases when either the total addressable market grows. Or the company takes a larger chunk of the market from the incumbents.
Let us take a look at Apple, one of the stocks in my Moonshot Portfolio
Apple share price has risen due to the explosive growth in the Services sector. Apple is no longer just an iPhone company. Apple charges 30% for purchases of apps, content, functionality or services in an app. Very few firms can escape from paying Apple. Netflix was one of the few that managed to avoid giving Apple $700,000 a day by directing users to sign up via a browser instead of the app.
Similarly, Amazon has grown not because the people are spending more on retail. Rather, instead of spending at different stores, Amazon has become the Everything Store. So it has grown as a result of taking market share away from others.
As most of the economy moves online, I do anticipate the technology stocks to grow larger. There was a slow shift already underway in this direction. The advent of the pandemic and shelter-at-home has accelerated the trend. More people are using services provided by technology companies driving their prices higher.
Disclosures: None of this should be taken as financial advice for investments. Consult a licensed investment profession.
Final Thoughts On Will Robots Take My Job
Look at the trend of your job being replaced by robots in a positive light. Instead of fighting, embrace the trend. There are several jobs which are either dangerous or monotonous for human to perform. Having robots take over these tasks would be beneficial in the long run.
Do not assume because your job is currently highly paid; that it can’t be automated. Over the next decade, at least one-third of the tasks in about 60 percent of jobs could be automated, according to research by consulting firm McKinsey & Company
Instead, look at your day job and be realistic. Identify what parts are rules driven. Develop soft skills such as influencing, persuasion, negotiations, sales, etc which can robot proof your job.
Look at trends in both real estate and stocks. Invest with the future in mind.
Readers, how do you see the automation trends playing out? What part of your job is rules based versus skills based. Any changes we need to make when planning for the future in terms of job or investments?
John came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
John started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. He resides in the San Francisco Bay Area enjoying nature trails and weight training.
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