Cheaper than robots? The 21st century will see the end of unskilled labor from the mainstream economy
Let's have a thought experiment. Say that every year, machines replace 40,000 unskilled hours per week with 4,000 skilled hours per week maintaining the machines. The machines are equivalent to the human workers in economic output, so the revenue stays the same. Where does the money go? Should there be 1/10 as many workers working full time or the same number of workers working 1/10 of the hours? Should the skilled hours be worth 10x as much as the unskilled hours? Or should the skilled workers be paid the same or slightly better wages?
Let's say all 40,000 unskilled hours are the entire economic activity of a company. If the company continues to employ the same workers, trains them to maintain the machines, and pays them 10x the rate for 1/10 the work, everything stays exactly the same (this never happens). If the company trains 1/10 of the workers to maintain the machines, laying off the rest, and pays the maintenance 2x the rate for the same number of hours (optimistic), the company now pays 2/10 as much for the same economic activity, leaving the other 8/10 for other activities. Where will that money go? Where should it go? How much of a raise for the management is appropriate? How much of the money can they use to expand? What is the likely expansion? Does the business plan scale up or would it have to change? Does scaling up displace other businesses with other workers?
What about the laid off workers? In a small local economy, the layoffs could easily destroy an entire town. The remaining workers only need so many new clothes, new cars, new toys, and nights eating out. Even if we assume they will spend all of their money in the local economy, that's still 2/10 of the money now supporting the service industry. Restaurants and outlet stores will close, putting more people out of work in a cascade of unemployment. Can the company expand local jobs with its new profits to make up for this? Will it?
When a business becomes more efficient, what is the ideal mix of lay-offs, pay raises, and work hour reductions? How does the answer change depending on whether you are a worker for the company, the owner of the company, a service worker in the company's town, a worker in the same industry in another town, a political leader interested in the most economic progress for voters, or a political leader interested in the most economic progress for campaign donors? Is the ideal outcome maximum economic output, maximum investment in the local community, or something else?
These are questions we must think of now more than ever before. There have been gains in efficiency before, but nothing like what we will see in the 21st century. We stand at the threshold of machines replacing all unskilled work, from retail to agriculture to manufacturing to restaurants to transportation. Nearly all of our needs and desires can be met with machines, but only if we still have jobs.