AI in relation to wealth distribution
The gap between the rich and the poor has been steadily growing but with the advancements in AI and automation, is it likely that this gap will get even wider?
One of the main benefits of using AI is that tasks can be completed faster and more efficiently than ever before. Businesses are lapping it up because it saves valuable time and money.
However, it is feared that what may seem a great thing may actually further disconnect the wealthy and everyone else.
Advancements in artificial intelligence mean that jobs are being replaced by intelligent systems. This has actually been in place for a number of years now, with machines replacing workers in factories on the assembly line for example, but obviously, now things are much more advanced.
Automation has been hitting manual labour jobs hard because employers can save a lot of employment costs and ensuring the jobs are doing with minimal errors.
The difference nowadays is that the machines are getting smarter. Smart technologies are everywhere, from TVs to security systems to kettles. Technology is starting to eliminate even the most basic of tasks such as boiling water.
There is a history of advancements
AI will continue to develop to where it will replace jobs that do not require much training in order to function necessary tasks.
But this is not anything new.
Human civilisation has always found a way to improve efficiency.
Take the industrial revolution for example. Machines were implemented to improve production output.
A number of inventions were made that saw the improvement in the textile industry and the rise steam powered engines.
Modern history is no different.
The invention of the internet has seen people switch from doing everyday things in person to doing them online.
One of the big benefactors of this has been online retailers. The normal shopping experience of visiting the local supermarket or high street is being replaced with internet spending.
Why? Because it is so much easier.
Doing things from your own home is less stressful and takes a lot less time.
AI on the workforce
The main issues that surround this is fear of the unknown. Will AI end up costing everyone their job and only the rich can survive?
While it may be likely that automation will end up replacing a lot of untrained and lower skill-based jobs, people will be able to learn an entirely new skill.
Automation systems that have machine learning abilities will not be able to replace everything a human can do. It can be trained to think like a human but it won’t be on the same level.
Think about it from the perspective of Kallum Pickering, an analyst at Berenberg:
Producers will only automate if doing so is profitable. For profit to occur, producers need a market to sell to in the first place.
Keeping this in mind helps to highlight the critical flaw of the argument: if robots replaced all workers, thereby creating mass unemployment, to whom would the producers sell?
Because demand is infinite whereas supply is scarce, the displaced workers always have the opportunity to find fresh employment to produce something that satisfies demand elsewhere.
As you can see, automation will have to increase the number of jobs in order for companies that create and develop the technologies to sell their product.
The more jobs created, the fewer unemployed and so the gap between the rich and poor should close.
The flip side
What is really interesting is that in the UK, the rate of unemployment has been falling over the last number of years.
However, wages do not seem to be rising as fast as they should be.
Is this because of automation? Perhaps.
With the rise in machines being used to replace jobs, the ex-workers have to find some other form of employment.
AI is strong in logic and complex thinking but struggles with basic tasks. For example, a computer will be able to easily solve difficult mathematical equations but won’t fare as well as a postman without being embedded into a movement device.
It most likely pays less to deliver letters but because a computer can’t do it, the unemployed have little option but to take these jobs.
So if this were to happen, it could be said that AI will increase economic inequality because jobs will cease to pay well based on the low skills that are required to do them.
The less money in circulation, the less wealth can be distributed.
How to manage the spread of wealth
The more that technology replaces humans in the workplace, efficiency will increase which in turn, increases wealth.
The current problem we have is that when we start to see the benefits, they should be available to everyone.
This is the major point that needs to be tackled to solve the wealth distribution problem.
The fewer people that are in work, the more the government will have to support the unemployed with extra welfare programmes.
At the same time, the jobs that are created must reflect economic sustainability in order for workers to maintain a worthwhile lifestyle.
There are schemes that are being trialled now in order to prepare for the robots age such as the universal basic income. This has been rolled out in Finland and is being said to make people want to go out and get a job.
But this is just one potential route that can be taken and governments across the globe will have had discussions about how to keep up with advancements.
There must be a genuine attempt at sorting this out so we are not left behind.
Inequality, without a sustained attempt at the redistribution of income, wealth and opportunity, will increase.
If used properly, integrating AI into modern life will only help society advance to levels we have never experienced before.
However, using too much too soon could put too many people out of work and increasing the gap. It is important that those that could be threatened by the integration are educated on how they can stay in work but not have to settle being worse off because of a robot.