Manufacturing, transportation, and even customer service industries stand to lose jobs to automation in the near future. Amid this coming change in the way we live and work, industry leaders are fiercely debating how we can adjust public policy to adapt to this unprecedented way of doing business.
In a Forbes op-ed today, technology policy specialist Andrew Seamans reacts to Bill Gates’ argument from last week about whether we should tax robots. Gates argues that taxing robots that replace human jobs will help make up for lost income taxes and social security taxes, as well as make businesses more carefully consider the external costs of automation. Seamans counters that a robot tax would hamper innovation. But instead of looking for a definitive “yes” or “no” on this hypothetical question, maybe we should take a step back. After all, this automated future is still pending.
That’s not to say automation is a frivolous or speculative matter. No matter what automation deniers say, this change is coming. According to an early 2016 report, which, in a move that’s symptomatic of the new administration’s automation denialism, is no longer available on the White House website, White House economists told Congress that workers earning less than $20 an hour have an 83 percent chance of losing their jobs to automation. This is huge, and it’s something that policy makers will need to negotiate, especially in light of President Donald Trump’s focus on creating and keeping American jobs.
Gates and Seamans find common ground on the predicted effects of a robot tax: It would slow the rate at which companies move toward automation. Their attitudes toward whether this is a good thing, however, differ sharply. While Gates says a robot tax would encourage businesses to think long and hard about the societal consequences of automation, Seamans argues that such a tax would discourage innovation.
“Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things,” says Gates. He highlights the fact that even though automation will make manufacturing cheaper, it comes at the expense of the societal benefit of tax revenue, which in turn helps support a society that prepares people for low- and high-tech jobs. Seamans disagrees with this assessment, though.
“Robot taxes would dissuade firms from investing in robots,” says Seamans, “which would lower economic growth, and, to the extent that robots complement labor in some cases, would lead to less hiring and lower wage growth.”
He also takes issue with the definition of a robot, noting that the industrial definition of a robot, a programmable arm used for manufacturing, does not cover some other automation technologies that people might call “robots.” These include automated chatbots, which are already employed for customer service.
“When we say we want to tax robots,” he asks, “do we want to tax all types of robots, including software robots and other forms of automation, or just robot arms?”
But before we decide how we define robots and whether to tax them, let’s establish a rough timeline for job automation. According to a December 2016 White House report, 80 to 100 percent of all trucking jobs will eventually disappear. And according to a recent article by the group of technology executives that make up the Forbes Technology Council, compliance jobs, retail cashier jobs, supply chain jobs, scheduling and travel jobs, taxi and ride-sharing jobs, and software testing jobs will all be automated in the coming decade.
This is just part of the list of jobs that will be automated in the near future, so yes, we do need to decide how policy makers should handle automation.
Writer and basic income advocate Scott Santens also disagrees with Gates’ idea for a robot tax. He says that instead of taxing robots, the government should focus on taxing capital gains and pollution instead of automation.
Whether or not we tax robots, both Seamans and Gates could be right: We need to make up for the tax revenue lost when human jobs are automated, but it doesn’t necessarily need to come from taxing robots. Whatever the case may be, we’ll need to decide soon.