America’s economy is not what it used to be. The middle class is shrinking, cost of living and rent continue to increase, meanwhile jobs are leaving the country. People are making less money than their parents despite being more educated. It’s becoming nearly impossible for anyone to survive on minimum wage. Many are having to work multiple jobs and still having to live paycheck to paycheck and the situation seems to be getting worse and worse. What's going on?
Part of the reason Trump won over Clinton was that he promised change, while Clinton promised more of the same. Trump also hit a nerve when he decided to focus his whole campaign on bringing back the “American Dream.” According to a Gallup poll held just before the election, more than 50% of Americans believe that our economy is getting worse. Today, the “American Dream” is not exactly dead, but it is dying. In fact, if born poor in America, you only have about a 7 percent chance of making it into the top income distribution.
Many, rightfully, blame globalization for this decline of American “greatness.” They blame foreign governments, foreign currency manipulation, trade deals, and high tax rates which they say incentivize American companies to leave. But why is no one in politics talking about automation? Automation is a much greater threat to American jobs than any of the previously mentioned concerns. Yet, all anyone can talk about is bringing back the jobs of the past, when America was “great.”
Although, the past allows us to learn from our mistakes it cannot guide us into the future. Every moment in history is different and so every situation must be handled in a different way. Today’s increasingly complex world requires increasingly specialized workers. America’s problem is that it currently has an oversupply of laborers with similar skills. Skills which were well suited for when “America was great” but which are not well suited for an evolving economy.
Instead of bringing back old jobs, we should be focused on how to create new ones. Instead of attempting to bring back the past, we should be focusing on the future. While everyone is complaining about factories moving to foreign countries, companies like Tesla (TSLA) are working on building fully autonomous ones. What good will it do us if we get companies to bring back factories if eventually the factory worker will be replaced by a machine?
This isn’t the only place where jobs will be lost to automation. Autonomous vehicles are also on the horizon. Elon Musk announced that every Tesla vehicle will be autonomous from now on. A large percentage of US jobs are based on driving for one reason or another. Most of those jobs will be wiped out. Telemarketers, bookkeepers, Cashiers, salespeople, and many other jobs, are likely to be replaced by automation in the near future. Are we, as a society, prepared for this transition? While the United States is preoccupied with bringing back jobs of the past, other countries are focusing on producing laborers which are ready for the jobs of the future.
That is, the economy of the future will not be centered around manual labor and factory workers. The economy of the future will be centered around specialized and technical labor. Countries which provide their citizens with access to education will allow citizens to participate in the economy of the future. These countries will flourish. Countries which are preoccupied with bringing back jobs of the past will not.
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