In just two short decades or so, we'll enter a jobless future.
Thanks to highly disruptive advanced technologies, jobs -- even industries -- will soon vanish, becoming remnants of a distantly remembered past. Other positions will be more efficiently done by machines, eliminating the need for human employees. This has happened before -- indeed, since the dawn of the Industrial Age -- but never in history at the same speed and scale. It's the advent of the "labor-light economy," as defined by noted MIT researchers Andrew McAfee and Erik Brynjolfsson, who have explored the benefits and downsides of rapid technological advancement.
At the same time as machines displace most of us, our fundamental needs -- think of Maslow's basic hierarchy -- will be met through the application of technologies. Food, energy, shelter, and health care will be free or so low cost that they're virtually free. Even education will be eventually be free.
But the path to that the jobless future won't be easy or simple; here's what will happen over the next 15 to 20 years.
We're already entering the first stage: a trough phase where a massive repricing of labor will take place. This is inevitable as the number of jobs and available industries shrinks. The relative purchasing power of labor will become more even across domestic and international markets -- which means, as a plus, the cost of American labor will become more competitive. Companies won't necessarily have to locate manufacturing plants overseas; the financial considerations will no longer be as compelling. As a result, we'll see medium-skilled manufacturing jobs come back to our shores. Service jobs will replace low-skilled manufacturing as options for some, not all.
But there will also be greater division through the rise of a powerful class. Those with specialized skills and abilities, who cannot be conveniently replaced by machines, will enjoy better employment and the resulting capital spoils. Think of this much smaller subset of people as the new 1 percent. Those who can't compete in this rising paradigm will struggle, because technologies haven't yet made food, shelter and healthcare free or nearly free, although that day is clearly coming.
At the same time we enter this trough, politicians will attempt to derail the inexorable onset of the jobless future. Those on the left will want to slow-roll its arrival, to preserve what they see as a heyday of economic opportunity: the chance to broadly compete for jobs across a variety of sectors and companies.
Those on the right will see this as the natural outgrowth of capitalism but constituent pressure -- especially in states where certain industries dominate but are likely to disappear -- will win out. Both sides will struggle to adapt their thinking and reconcile themselves to a model that's truly unlike anything we've seen before. And both will be keenly aware that the trough phase is the most dangerous for the nation -- for as industries blink out like so many dying stars and the jobs with them, people will be unsettled, angry and even panicked.
This phase will inspire us all to ask the question, how do we address a society that's moving toward such dramatic unevenness?
Policy changes are essential. We will have to soften capitalism as we know it in order to save it.
First, there will need to be a massively structural retraining effort to help prepare more people for the jobs that remain -- and new industries that may surface which require skills and knowledge we can't yet fully anticipate. Practically this might look like learning accounts -- say, several thousand dollars for approved educational courses or training programs. Increasing competitiveness is ultimately the cost-effective option: you'll move people off the rolls, enable them to get jobs that then enhance their ability to reinvest in the economy through spending, etc.
Second, wage insurance -- a supplement that lessens the gap between what a person was earning and currently earns -- will be fundamental during what will be a volatile period of adjustment as people, governments, and institutions come to grips with a sea change in the way we work.
As this new paradigm gradually becomes the dominant model, not all workers will be shut out of opportunity. Some displaced workers will be able to find new employment, but at a lower wage in a new or existing industry. This will still present a hardship for most families, though obviously not as dramatic or wrenching as the total loss of employment. Wage insurance will help people preserve the lives they'd previously built and -- as a huge benefit to society and governments writ large -- be a stabilizing influence.
Change is nearly always difficult. The advent of the jobless future has the potential to strain and stress us at scale, before it arrives in force. Yet its coming is assured. Devising and socializing smart policies now will make the transition as smooth as possible, protecting us both as individuals and as the collective.
Fertik is the founder and executive chairman of Reputation.com.