On Robots and Baristas

Coming Impact of Automation on Pecantown

As many as two-thirds of the occupations in Guadalupe County are at-risk for some level of automation, according to a new report by the Brookings Institution.

A little more than 200 years ago, a band of textile workers in Britain took hammers and torches to the knitting machines that threatened to displace them. They called themselves Luddites, after their fictitious leader, Ned Ludd. As the Industrial Revolution exploded around them, these highly-skilled craftsmen saw their livelihoods threatened by new-fangled machines capable of increasing productivity at a pace no human alone could match.

Since then, economists have observed that the introduction of such new technology, while eliminating some jobs – created other new jobs. Someone had to make the new-fangled looms, after all. And as productivity increased, pay increased. Economists of all stripes have agreed that these new jobs and higher wages lead to demand for new things (Build-a-Bear, anyone?), new services (pedicures for all!), and new opportunities (B2B loom salesmen). We’ve certainly seen this in our area over the last few generations: fewer farmers, but more jobs at Alamo Group and Caterpillar. Microsoft Word and Quickbooks replaced typists and bookkeepers, but software engineers and IT workers took their place.

For two centuries, economists had good, empirical reasons to believe that labor-saving technologies would have no overall impact on labor and wages, despite how bad it felt to be the guy who had to abandon his craft and learn to build a knitting machine instead. But now, at the dawn of the age of the robots, economists are questioning the long-held theory that we’re all going to be just fine. It turns out that a whole swath of people in the middle are doing worse, not better.

The emerging narrative is a tale of two worlds. College-educated workers in high-skill, non-routine positions are at least risk. However, the days of landing a job at the same manufacturing plant where your parents worked straight out of high school, with a lifetime of living wages, healthcare and a pension, are numbered. Non-college educated workers in jobs like manufacturing, production, transportation and warehousing are likely to see their jobs partially or fully automated. Without specialized training and/or a college degree, these workers will be flushed into low-wage jobs, like food service, home health, or Amazon distribution centers (in the case of Amazon distribution centers, these jobs will last only until the robots get more dexterous).

This trend is already evident. David Autor, professor of economics at MIT, has tracked what he calls the polarization of work over the last 50 years. He documents rising opportunities in high-skill jobs (professional, technical and managerial) for college educated workers. But mid-skill, mid-wage jobs previously held by those without college degrees (like those in manufacturing and production, office/clerical work or sales) have been disappearing. Instead, those same laborers are being forced into lower-skill, low-paying jobs (personal services like cleaning, security, health aides). This trend will intensify as automation increases.

So, while the quantity of jobs in our community may increase, the quality of those jobs – in terms of real contribution to an individual’s quality of life and economic impact to the community – will change dramatically for some. Importantly, the effects of automation will not be felt equally by all. Non-college educated men, young workers and underrepresented groups — especially Hispanic males – are most at risk.

What does all this mean for Seguin and Guadalupe County? According to a recently-released Brookings Institution study, 50 to 64 percent of current workplace activities in Guadalupe County have exposure to automation by the year 2030. Given that Seguin boasts more manufacturing jobs per capita than any city in Texas, these trends should be cause for alarm. Of even greater concern is that only 16 percent of Seguin residents and 26 percent of Guadalupe County residents ages 25-plus have a Bachelor’s degree or higher – placing a bull’s eye directly over our community.

Fortunately, Seguin and Guadalupe County enjoy considerable resources and opportunity that enable us to prepare and respond. Next week’s post will explore Pecantown’s potential to activate regional leaders and key stakeholders to develop a shared vision and strategic plan to carry us through the coming change. At minimum, our Community Plan should address the following:

1. Future-proof our economy through diversification
2. Stress lifelong-learning, educational attainment and certification programs
3. Support digital skills training and re-training
4. Advance quality of life initiatives that attract positive growth
5. Encourage development of uniquely human skills: interpersonal, creative, critical thinking

There’s a freight train coming our way. We can barricade ourselves in, or we can lay new track and turn a threat into an opportunity. Let’s start thinking about ways our city, county, educational and business leaders can do more together than apart.

Big Idea Takeaway: Employers like Dell and Accenture offer higher-wage, future-proof jobs. Let’s explore community and school-based certification and digital badging programs that create direct pipelines to such employers for students and adult learners – right here in Seguin.