False Necessity is the Mother of Dumb Invention
Recently, I have seen two innovations in retail, AI cashiers and human cashiers but working remotely from another country such as the Philippines and making much lower wages than domestic workers (examples are below). I fear that the AI cashiers will outcompete the Philippine cashiers leading to the worst of all worlds, AIs doing low-productivity work. In an excellent piece, People Over Robots, Lant Pritchett nails the problem:
Barriers to migration encourage a terrible misdirection of resources. In the world’s most productive economies, the capital and energies of business leaders (not to mention the time and talents of highly educated scientists and engineers) get sucked into developing technology that will minimize the use of one of the most abundant resources on the planet: labor. Raw labor power is the most important (and often the only) asset low-income people around the world have. The drive to make machines that perform roles that could easily be fulfilled by people not only wastes money but helps keep the poorest poor.
The knock on immigration has always been “we wanted workers, we got people instead.” But, with remote workers, we can get workers without people! Even Steve Sailer might approve.
At the same time, the use of AI for cashiers illustrates Acemoglu’s complaint about “so-so automation,” automation that displaces labor but with low productivity impact. AI cashiers are fine but how big can the gains be when you are replacing $3 an hour human labor?
It seems likely that at least one of these innovations will become common. Unfortunately, I suspect that US workers will object more to $3 an hour remote workers taking “their jobs” than to AI. As a result, we will get AI cashiers and labor displacement of both US and foreign workers. Doesn’t seem ideal. It’s not obvious how to direct technology to higher productivity tasks and tasks complementary to human labor but at the very least we shouldn’t artificially raise the price of labor to make AI profitable.
As Pritchett notes this is hardly the first time that cuffing labor leads to the creation of unnecessary technology.
In the middle of the twentieth century, the United States allowed the seasonal migration of agricultural guest workers from Mexico under the rubric of the Bracero Program. The government eventually slowed the program and finally stopped it entirely in 1964. Researchers compared the patterns of employment and production between those states that lost Bracero workers and those that never had them. They found that eliminating these workers did not increase the employment of native workers in the agricultural sector at all. Instead, farmers responded to the newly created scarcity of workers by relying more on machines and technological advances; for instance, they shifted to planting genetically modified products that could be harvested by machines, such as tomatoes with thicker skins, and away from crops such as asparagus and strawberries, for which options for mechanized harvesting were limited.
Necessity may be the mother of invention, but false necessity is the mother of dumb inventions.
Wendy’s AI.