AI will replace millions of workers. Drivers, customer service agents, accountants. Creating good jobs for those laid off people is one of the most important things we can do. 

I used to think the displaced workers would find new jobs on their own and wind up better off. I no longer think that.

What happens when a huge number of people lose their jobs, suddenly? To find out, let’s take a look at what happened in 2008 in my home state of Wisconsin…

Learning from Janesville

Janesville, Wisconsin. Two days before Christmas, 2008. 

Last vehicle rolls off the line. Black Tahoe.

85 years of history and thousands of jobs, gone. I lived just up the road when it happened, in Madison. 

The GM plant employed 7,000 people at its peak. They all lost their jobs.

Many years later, those workers have never fully recovered.

What happened to those hard working people is the subject of an excellent book called Janesville. 

Trying and Failing to Adapt

After they were laid off, many of the former GM workers signed up for job training. This is what you’re supposed to do, isn’t it? 

And yet, the workers who signed up for retraining actually made less than the workers who didn’t.

Five years after the factory closed, 3/4 of the workers said they were worse off financially than before.

Proud People Struggling

Unemployment in Rock County, where Janesville sits, reached 13%. Half the families hit by the layoffs struggled to afford food. 

Janesville, once a prosperous community, began to have homeless children.

The laid off workers were not lazy people. They had worked hard, year after year.

But that didn’t matter anymore. 

The economy had moved on, and they were no longer needed.

What the Heck Does This Have to Do with AI?

What happened in Janesville is about to happen everywhere.

Millions of people will lose their jobs.

In 2008, it was a financial crisis and offshoring. This time, the cause will be AI and robotics.

The displaced workers will look for other jobs, and many will probably find them. But the new jobs will pay much less.

We’ll also create new jobs that pay a fortune: Machine Learning Researcher, Robotics Engineer. But the displaced workers won’t be qualified for those.

This means a permanent loss of income for the workers whom AI replaces.

Kicked Down the Economic Ladder

Let’s say you’re an accountant…

Accounting is probably your best skill. If you had a better one, you’d use it and make more money, right? 

In 5 years, software may replace most of what accountants do. That means many accountants will be laid off.

What will these laid off accountants do? 

Any new job will probably pay less. Their most valuable skill isn’t valuable anymore. They’re forced down the value chain to lower paid work.

Maybe the former accountant will find himself at Wal-Mart or taking care of a disabled person as a home health aide.

Those jobs are honorable. But they don’t pay very well. 

Wrap-Up

The AI revolution is a foregone conclusion. Our most important job today is figuring out how to deal with the fallout. 

How to create jobs for displaced workers. How to help humans find meaning in a world of machines.

If we do that successfully, we can reap the benefits of AI without creating instability.

But if we fail, America is headed for a dark future.

More on tech: 

The End of Human Drivers: 7 Million Jobs at Risk

Meet BMW’s New Factory Workers

The End of Human Food Delivery

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