Death of the Middle-Class – Get the Door, it’s the Robot delivering Pizza!

By: Heero Yuy

Friends are those that challenge you and equally you challenge them so that you may mutually benefit from this exercise and grow together in life. Acquaintances are individuals who are more prone to getting hurt feelings during the friendship process, fall to the way side, and can choose to leave and cease communication. This is the law of friends and acquaintances and one shall only grow in life by having more of the former and less of the latter.

Some acquaintances couldn’t understand full well why Automation is crash over everything like a Tsunami and destroy this precious thing we hold dear to our hearts called the Middle-Class.

When debating this topic, the opposing party mentioned that “humanity has infinite potential, we’ve adapt to countless automation measures in the past, and will live infinitely fruitful into the future.” While is this a blissful outlook on whats to come, the reality is far from this case. The survivors have to learn to adapt at a much faster rate than the rate of automation. There will be victims of Automation and the victims will far outweigh those who somehow survived.

This is my response to the above thesis of “everything will just be fine”:

“For this to succeed I see all of the following to align:

1) Learning rate that naturally exceeds the average rate of those in the IT fields (aka they are smart or smarter than the average person applying to those jobs). OR dedication to throw away all your free-time to make up for the fact that you can’t learn faster than your competitors and the only way to get the same yield is by committing ever more time just to keep up let alone get ahead (Gatech syndrome)

2) Spend at least a couple of hundred or (thousand if you are slower) hours getting proficient in a couple of popular programming languages

3) Spend another couple of hundred or (thousand – same as above) of hours getting proficient in AI and ML/DP applications in those particular languages

4) Hope that others who embarked on this journey are now way behind their current skill level

5) Hope that the job flyer they’ve targeted still exist, if not, it exists at another firm and is still open to a candidate of the current skill level

6) Hope that their interview skills are on par or better than all other people running in the same race with more or less experience

7) Make it to final round of interview

8) Actually get an offer and accept it

Or know someone in the industry or do your own startup and hope to get funding. Both of which are much harder than the steps outlined above in 1-8.

Note: Media reports on outlier stories. It is easy to believe that everyone around you is a multi-millionaire/billionaire and that if you apply these 5 easy steps that you too can be rich beyond your imagination. After a couple of iterations of this non-sense and seeing rest of what you read is complete garbage, you know that to find stories on the 0.0001% and report the collection of these findings as the empirical truth for the other 99.9999% that have no chance of making it is fundamentally flawed.

Each step is a conditional probability and the total probability of success for all 8 steps to all be 1 is rather low. Apply this over the masses of people that will be displaced and you will find that a few might luck out and make the transition while most will fall on their swords.”

A buddy of mine made some revisions to my statements above by saying:

“This is a good fucking post. You’ve honestly summarized the last 6 or so years of my life here. I would tighten some numbers – for 2, definitely hundreds not thousands required for entry level. For 3, that is specialization, which can be done after first round retraining. Everything else I agree. I retrained in my free time while earning 30k a year over 3 years so ~100k investment based on my hourly rate is on point”

Figure out your own self worth, reflect on that, and determine your proper market valuation based on jobs that are coming into popularity not existing jobs that are deemed safe.

Stability is the egg from which hatches Automation. You want to be a part of the Chicken and less so the Egg that is laid. There are plenty of eggs in this world and a ton of new Chickens about to hatch when Automation comes into the spot light.

Automation – Divine Economic Salvation or Ultimate Demise? WALL-E or Terminator?

By: Heero Yuy

Repost from WallStreetOasis.com! Enjoy!

Automation is a very controversial topic. So controversial in fact that one of my friends got pissed off when I got under his skin about it.

Martin Ford explained Automation to me in his book Lights in the Tunnel back when I was a grad student and his recent New York Times Best Seller Rise of the Robots: Technology and the Threat of a Jobless Future dives deeper into this very topic.

I’m all for automation. It makes our lives easier, more productive, and enjoyable at the cost of jobs. While we want to believe this is frictional unemployment and leave it at that I truly believe it is structural unemployment that has no easy solution. Why?

Two things must happen to a displaced worker in order to get ahead of the Automation curve:

  1. Out learn and pivot into the next best field
  2. Hope that field doesn’t get automated before they’ve extracted enough Capital from selling their services through employment or business venture

1 deals with a rates issue and time available to dedicate oneself to training in a new discipline. When good ole Peabody, the Coal mining company, went belly up last year a lot of the miners were interviewed as to what they would do next. Turns out they are going to grind it out intellectually and pivot to become programmers. Very awesome and this shows the true American spirit for those who’ve made that transition while others were left behind. Bills, your spouse, and kids don’t stop though when the individual is put out of the job so time available for this retraining process is a premium the further down the road of life you’ve traveled. Different story if you can ramen noodle sleep on couches as a single person.

2 Deals with picking the right field that has lower likelihood of being Automated out. No one really knows how to do this because the speed and acceleration of the growth of Automation is quite alarming. Go be a Dentist or a Doctor or something, who knows!

My friend’s counter-argument against Automation:

  1. The human “potential” is infinite, we will always outpace automation as we’ve done in the past
  2. People have been dealing with automation for centuries and we’ve thrived
  3. People can learn to adapt even when displaced from jobs

1 Potential doesn’t get you jobs when you put that on the headline of your resume.

2 Automation has actually crushed a lot of people in the form of outsourcing. Some have drawn ties to middle-aged White American Men suicide rates to the Increased Trade with China.

3 Open-ended statement. Can but don’t is also useless. It’s about learning rates and deadlines. Given infinite time, most of us can figure everything out. We don’t live forever.

My friend doesn’t understand the difference between velocity (speed) and acceleration. This is crucial for not only understanding Physics but also Market dynamics and other things like the Peak Oil Hypothesis (can’t drink fast enough of black gold on to keep up with consumption). He overcompensates by being emotional and repeating his statements many times until I sent him packing by telling him that he is a lazy student.

What threw my friend and others like him over the edge

Ask him to employ those people who’ve been displaced and who he would choose if he had the option of selecting an overly qualified candidate and one that is pivoting with the aptitude but not the experience for a job ceteris paribus (i.e. same pay, benefits, etc). No rational person would pick an unknown over those with heavier paper and real life credentials.

When challenged with a real life problem, these arm chair theory guys go running right back to their books, journals, and obscure publications for rebuttals.

Automation. Our best ally or most feared invention to date? WALL-E or Terminator? You decide.

References:
Harvard Business Review: Beyond Automation
I Don’t Think we can Stop the Future of Automation and Job Losses – Martin Ford
Trade Liberalization and Mortality: Evidence from U.S. Counties – Federal Reserve
Lights in the Tunnel – Martin Ford
Rise of the Robots: Technology and the Threat of a Jobless Future – Martin Ford