As far as heart wrenching stories go, this surely has to be one.
Boeing, despite record profits, is arm-twisting its hometown into giving away massive tax breaks; an incredible figure of $8.7 Billion, amounting to 10% of its entire company value. Having obtained that, it is now forcing its machinist union to accept deep wage cuts.
To quote the article “The machinists didn’t ask for hefty pay raises or new benefits… They just wanted to preserve what they had.”
“I’m tired of being slapped in the face,” – John Gilman, 40-year Boeing veteran
The machinist union, ultimately decided to make their last stand for the middle class, and rejected the wage cuts proposed by Boeing.
A noble stand, but one that is likely to bring great devastation. Boeing is now opening up the bidding to other states, and Texas is already poised to lure Boeing away with the promise of lower wages. A move that will leave in its wake 56,000 unemployed in Washington – shattering their middle-class aspirations.
The story is so heart-wrenching to me, because it’s one that we’re likely to see more of, in the coming decades. Our society is at a watershed moment in history, and our middle class is facing two dangers that threaten its very existence.
For the past centuries, new technological inventions have always been tools. Machines that required close human supervision & operation. Machines that automated & sped up menial, tedious work, while still requiring humans to do qualitative thinking & abstract analysis. Machines that could automate very specialized tasks, while still allowing humans to retrain themselves into other fields that haven’t been automated yet.
But this is on the cusp of changing. The unique skillsets that humans have always had, are themselves under attack. IBM’s Watson, which beat Ken Jennings on Jeopardy, has proven itself capable of understanding human speech, and all the context-specific meanings, puns, double-entendre & hidden implications that go with it. Already, Watson is being repurposed to do legal research, medical assistance, and secretarial services. Understanding ambiguous human speech & engaging in abstract, open-ended analysis have long been uniquely human strengths that couldn’t be automated by machines. But in the next 10-20 years, it’s easy to imagine AIs like Watson becoming just-as-good, while also being orders of magnitude cheaper than the human labor that they would replace.
Shifting our gaze from the very abstract & long-term threat of technological progress, is the current reality of globalization. Technology has made the world a much smaller place. Telephones, video-conferencing, transportation improvements, the shifting of interactions & jobs from the “real world” to online platforms… these have all made it much easier for someone to work & get things done from half-a-world away.
On the low end, countries like Mexico and China have become manufacturing powerhouses, luring jobs away that will likely never come back. On the high end, I’m already working with Software-Engineering colleagues in India who are very competent, and are earning a fifth of my salary. As we step into the new millenium, these trends are only going to grow further. The American middle-class is going to find itself competing with labor from around the world, at a fraction of its cost. Today, the highly skilled Boeing machinists are on the verge of losing their jobs to cheap Texas labor. Tomorrow, the workers in Texas are going to find themselves competing against even cheaper labor in Mexico.
There is a very real danger that the demand for human labor could face a drastic fall, in the face of sophisticated AIs that mimic our skills. There is a very real danger that the supply of human labor could grow exponentially, as globalization enables impoverished workers from the developing world to enter the same labor market as the American middle class. If either or both of these come to pass, our society would see a return to the days of the Industrial revolution; a time when those elites possessing capital & natural resources found themselves fabulously wealthy, while simultaneously, the average working man found his labor to be dirt-cheap and had to slave away just to get by. We face a real danger of becoming a fabulously wealthy society, with a majority underclass.
The early stages of this can already be seen in the labor market data over the past decades. In the past 30 years, the top 1% have seen their income grow 275% while the middle class has seen its wages grow by just 40%. When zooming down further at a more individual level, the findings are even more depressing:
“When we consider all working-age men, including those who are not working, the real earnings of the median male have actually declined by 19 percent since 1970. This means that the median man in 2010 earned as much as the median man did in 1964 — nearly a half century ago. Men with less education face an even bleaker picture; earnings for the median man with a high school diploma and no further schooling fell by 41 percent from 1970 to 2010.”
When I read stories like the one about the Boeing machinists in danger of losing their jobs, it really strikes me as part of a greater trend that has been ongoing for decades. A trend that could see labor becoming steadily commoditized, devalued & subservient to those elites in possession of capital & natural resources.
It’s easy to decry the greed & heartlessness of companies like Boeing, and to blame them for these middle class woes. But I find myself sympathetic to their cause. If an unemployed worker in Texas is willing to do the same job for less than a Seattle machinist, why shouldn’t he be deserving of the opportunity? Do we really expect business managers to deny the Texas laborer this opportunity, while also denying their shareholders the profits that they are hired & mandated to generate? In our capitalist, free-market economy, corporations are here to do one thing, which they do very well: generate wealth & provide useful services. They aren’t here to do charity, and it’s time we stopped expecting them to.
The threats facing the middle-class are very real, and its time we looked to ourselves for solutions. We may not know exactly what’s going to happen in the future, and how these trends will play out… but the fate of the middle class is too important to be left to the vagaries of the free market & for-profit corporations. We need to do more through public policy, to ensure that we maintain a strong & vibrant middle class, regardless of whatever technological & societal trends we encounter over the next century. We need a substantially stronger minimum-wage and Earned-Income-Tax-Credit in order to guarantee a decent quality of life for anyone who is willing to be nice, work hard & play by the rules. Switzerland is already on the verge of eliminating poverty by guaranteeing to every single citizen a basic income. It’s time we started doing the same.
A Great Society is one that cares for all of its citizens, and provides them with a dignified life. The free market might be great at generating wealth, but it certainly doesn’t make for a Great Society. It’s time we started harnessing this wealth to guarantee every citizen a life of dignity.
Outlook Zen 
Great piece. As a recent recipient of Social Security wages after working for 45 years, my favorite phrase these days is “guaranteed income”. We can contribute to our society without the fear of extreme poverty. I continue to do so. All of us can. The Gotha Program motto SHOULD be our goal. Capitalism is an unemployment machine: productivity goes up as paid employment opportunities go down. Instead of producing more leisure time, this process produces fewer workers, functioning under conditions of more stress and more ex-workers living under bridges. Automation and AI should be seen as great liberating trends, but in this system they are turned into horrors. We need a new system.