The Future Of Indian Labour: It’s A Bit More Complex Than A Simple Case Of Man Vs Machine

This piece was first published in The New Indian Express. You can find the original piece here.

Anybody that has seen a ‘roomba' clean a room will be impressed. The robot does the job of a deep clean better than what any manual labourer can do. It can be programmed to operate at a flexible time and there are no safety hassles. Add roomba to a dishwasher and washing machine, and you would not need a helper at home! And, there goes the job of a maid who works her gut off in three or four houses a day to earn the measly Rs. 10,000 per month to help run a family. That is at the distributed micro-level. At the industrial level, robots are obliterating jobs of assembly line workers. The announcement at Foxconn, the poster child of Chinese manufacturing, of job cuts of about 60,000 people stunned the world. Not just maids and manufacturing workers, our own Indian IT services industry is facing layoffs due to automation of low-end tasks. Before anyone starts to think of this as scaremongering of a Luddite, be assured that this author is a technophile. But labelling should not stop us to pause and think about the short and medium term repercussions of automation on the labour market in India.

Labour demand is elastic when factor substitution is possible i.e when labour can be substituted with capital input. An example will be security cameras substituting watchmen. Labour with low end skills falls in the above category. But demand is inelastic for specialised labour. The number of cancer surgeons cannot go up fast just because their wages are increasing. The upcoming robotic revolution portends the moving of labour from the former market to the latter through skilling. It is not going to be easy. A recent labour bureau survey found that about 47% of the working population in India is self-employed- mostly farmers, shopkeepers and small-enterprise owners. 85% of such households had a monthly income of less than Rs 10,000.

Both the markets, the low end labour and high end labour are going to be in state of flux. There is a broad understanding that upward mobility of people in low-skill market such as assembly line workers, self-employed people etc. should be the focus. But, much of the skill development initiatives to address labour market failure through the public sector have been ineffective and ones through the private sector have been insufficient. The massive scale of skill development in a country like India and the rapidly changing technology environment makes even drafting a strategic plan for skill development look silly.

So how is India going to react to the job sucking robots? Perhaps the first knee jerk reaction will be protectionism through tariffs and technology blockade. And when it slowly dawns that a new kind of economy is being created and trying to stop technology is hopeless, our policy makers will warm up to provide guidance in the times of uncertainty. Since what economists call labour are actually people with emotions, there will be challenges to social cohesion. While Western economists can worry about widening inequality, we should not fall prey to narratives in developed countries and be steadfastly focussed on eliminating poverty.  Keynesian transfer payments will be important to get through the phase. Direct Benefits Transfer, (such as through Jan Dhan) should be strengthened and cleverly designed, transforming itself from a safety-net to a spring board during uncertain times of skill acquisition or job-hopping through the ‘gig economy’.

As low-end jobs move out of developing countries, it will be interesting to see how international trade agreements will pan out. As long the confusion and uncertainty is not compressed into a few years, we can solve the problems as we go. But technology hardly progresses gradually. Harvard professor Lawrence Summers notes that, “IT accelerates job destruction on the one hand, and developments such as virtual reality make non-work more attractive and addictive on the other, so I can imagine scenarios in which a third or more of men in this cohort (age 25-54) are out of work in the US by 2050.”

Even high end jobs are not safe. Investment banking jobs are being disrupted with deep learning and Artificial Intelligence. But marquee Silicon Valley venture capitalist, Marc Andreessen dismisses the dystopian picture. He points to the increase in the number of bank tellers even though the number of ATMs have increased in the last few decades. The focus, he says, will be on complex high end service that only human beings can offer. AI companies are hiring for robot trainers who will teach some nuance in dexterity and mobility to the machines.

How will politics and society react to large scale job losses? Advent of neo-Marxist political entrepreneurs is not beyond the realm of possibilities especially in India where the entrenched left ecosystem will find something new to outrage about. Deep rooted reforms in education should be initiated where the focus is on the methods and processes that equip the next generation with a wide array of skills to enable them to be nimble. While this problem is not hard to visualize, it is incompatible with our five-year election cycles to push the current policy makers to think over the medium term. As Erik Brynjolfsson and Andrew McAfee, the authors of “The Second Machine Age” say, “The outcome—shared prosperity or increasing inequality—will be determined not by technologies but by the choices we make as individuals, organizations, and societies. If we fumble that future—if we build economies and societies that exclude many people from the cycle of prosperity—shame on us.”

But the longer term picture looks fun, at least to think about now. Peter Diamandis predicts that the marginal cost of food production will tend to zero. If the productivity increases so much through machines and prosperity emerges what will happen to human beings with too much leisure time? Slowly the correlation between poverty and employment will move towards zero. Marxist concepts of “labour power” and “surplus value” can at last RIP. “Jobs, jobs, jobs!” or some variation of it will perhaps continue to the election slogans in the future years, meaning different things at different times. Rulers might dole out “bread and circuses” to the people like the Roman politicians of the 1st century that the satirist Juvenal bemoaned about (ironically present day work provides for both food and ‘circus’, by the way of keeping us involved in an activity for the most of our waking time.) Or will the citizens be leading the “well examined life”? Will there be high points of art and culture? And mind you, “making art might mean different things to different people; some people’s ‘art’ might explode. What are the chances of that happening when most of the interactions are going to be more with and through machines and less with fellow humans? And what are the implications for happiness? Those are interesting conjectures for philosophers (human and robot).

Elon Musk pointed to the rising technophobia in the society as visible in Hollywood movies where the robots are usually the evil force against which the human fights. At least India we are making benign ones; the most famous one dancing to a duet with Aishwarya Rai. In the same spirit, we as a country will do well to tackle technology and associated issues with a positive mindset and not succumb to paranoia. We should remember that the tractor after all did not end up killing the jobs of farmers. Robotics and AI are not going away. There is space in India for people of all faiths and robots to survive harmoniously - Vasudaiva kutumbakam.

The author is a Harvard graduate. He is a political and public policy advisor. He tweets @banuall