That is the future with automation. Here's how it works:
The Economics of Automation: Automation lowers the overall cost of goods and services by increasing efficiency. Robots can often perform tasks quicker than humans, and work around the clock. One estimate says by 2025, robots can decrease the cost of labor in the U.S. by 22%. And that estimate is accounting for only automating 25% of jobs that could be automated.
This reduces the costs to consumers, which allows your money to stimulate other sectors of the economy.
The money a company saves through automation can likewise be invested elsewhere. By definition, this is a more productive use of those funds. Because of automation, the same amount of resources can produce more wealth.
Even if the company gives the shareholders the extra profits, this stimulates the economy wherever the investors choose to spend the money.
And even if they bank the money instead, this lowers the cost of borrowing money, which means more people can afford debt like home loans and business loans.
But what about the workers that got laid off?
Remember that automation increases overall efficiency, so the economy as a whole is left in a better position with more wealth. That said, workers in particular industries will be displaced when their jobs are automated. That is why it is important to have a diverse skill set and be adaptable to change. That is what the failing public school system should be focusing on. They are stuck in a factory mindset.
But jobs that can be automated should be. I think it is a sad prospect for a human to waste hour after hour performing a task that can be performed equally or better by a robot. The human mind is the greatest asset. So workers displaced by machines should look to move up into a more skilled position. They should capitalize on their passions, and make money doing what they love. They should see their layoff as an opportunity to advance.
And remember that the consumers, the company, and the shareholders now all have extra money from the lowered costs of production. This means more jobs will be available in the industries where the extra money goes.
As the cost of living falls because of automation, that means people can get by working fewer hours. A job once taken by an individual might be shared by two or three people. And no one will be worse off for it; they can pay for their old lifestyle with less money!
This is what automation has always done. New inventions always displace workers. Yet the economy continues to grow. The automation creates more wealth, and that wealth is distributed by market demand.
The situation is only different now because of scale. As more and more dreary monotonous jobs are automated, where will new opportunities arise?
You can get a $20 particle board and laminate desk at Walmart. But wouldn't you rather have an intricately hand-carved oak desk?
Since the cost of living will drop with automation, people won't have to earn as much to get by. It is hard to make a living now with a skill like wood carving. The time it takes makes the price of the piece too high, or the pay per hour too low.
Automation will mean the woodcarver can decide to do what he loves, make less money, but still get by. Who will buy the desk? The people who now have more disposable income because of automation.
Art is a status symbol of sorts. And this is a great thing for artists of all kinds! Art can only be purchased when there is excess wealth. And automation creates excess wealth. People with more disposable income choose to show this by purchasing art.
How do you set your home apart from the mass-produced decor of Pier 1 Imports? You buy one of a kind art from your local artist. No one else has that exact hand-sculpted ceramic salad bowl. No one else has the painting that is hanging over your fireplace.
Years ago, only the most successful artists could actually make a living from their work. The wealthy Medici patronized Leonardi da Vinci and sponsored his work.
But now countless people have excess wealth, and they can afford to treat themselves to quality art.
This increases their standard of living. The customer gets a beautiful decoration or a symbol of status. The artist gets paid to do what they love.
Shaking hands with the artist as you finalize a transaction can increase enjoyment of the whole process. What is hanging in your living room has meaning.
Meaning is not a tangible good that can be mass produced. And yet things that have meaning to people will take larger chunks of the economy.
Now artists who sell their handcrafted jewelry, knitted clothing, or reclaimed wooden furniture on Etsy can actually make a living. No need to open up a risky retail location. And it offers consumers of all stripes the ability to have a real piece of art, without spending millions at an auction.
Art has been democratized. Anyone can access the market now–buyer or seller. You don't have to appeal to a dealer or get lucky with an agent.
Ironically, the move towards unique art and decor will take a chunk out of the market for mass-produced items that you can get anywhere.
Sure, you can mass produce art. But the market is already reflecting that people want more meaning and uniqueness to spruce up their surroundings.
Automation means more free time. And humans love entertainment. But that doesn't mean you have to get a role on Broadway or move to Hollywood to try to make it big. Entertainment is another industry that has been absolutely democratized by new technology.
Youtube stars are case and point. How many people now make a living from creating videos, or posting beautiful pictures on Instagram?
Perhaps it will become harder to make millions as an author. But it is already much easier to make a living as an author. If you love to write, could you imagine yourself waking up every morning and putting pen to paper for a few hours? Earning the same as you earn currently sitting in a cubicle, doing a monotonous task you hate?
Others are able to supplement their income with popular blog posts or videos. For example, the guitar player who teaches lessons on video. If he gets the views, he could earn some money. But the video also helps him promote his business. It is free marketing!
And this blurs the line between entertainment and education. That is a great thing! Educators can become entertainers and vice versa.
What if you could make a living playing in a band for bars and parties? Or making movies for local film festivals? Or competing in video game competitions? The people in these categories are already growing. This trend will only continue with the automation of mundane jobs.
Moving forward expect more professional athletes. They certainly won't all be making millions. But so what?
These opportunities will only expand as automation increases everyone's disposable income. The standard of living for even the poorest people has increased exponentially with the technological revolution.
So what will the next invention be to spawn a new industry of pros, and a new boom in business?