It’s clear that AI will change everything, as mentioned in last month’s ‘Last Word.’ In the cement industry, it’s likely that fewer workers will be required, and that they will be doing different jobs - essentially supervising the AIs that are doing the work. In this issue’s article on the Cemex Miami plant, we can already see this trend underway. If you are not already adept at using AI to boost your own productivity, then it might be time to look into it (or into a career change to something that can’t be done by AI, like ballet dancer or professional football player).
Years ago, I told the joke of the cement plant control room of the future, staffed by a human and a dog. The human was there to feed the dog. The dog was there to bite the human if it looked as if he was going to push any important buttons. Maybe in the future the dog can be trained to supervise the AI, barking if anything seems amiss, to summon the plant manager from the golf course. We may all dream...
On the other hand, it might become easier for the cement industry to recruit new workers - since it’s likely that there will be a wave of unemployment that washes over the previous white- and blue-collar workforce in other industries. I’m not saying that it helps for potential employees to be slightly desperate for work in order for them to consider working in our industry, but, then again, maybe I am.
AI doesn’t have to replace 100% of your job - if it only replaces 50% of your job and 50% of your co-worker’s job, then the laws of capitalism will eventually see to it that one of you will be spending more time with the family. Say that it’s just 10% of your job, and 10% of everyone else’s job - well, that means you can plan for a spike in unemployment (which we are already seeing in a number of developed economies). That will have major political impacts, coming on top of relatively high unemployment rates - and particularly high (and largely unacknowledged) youth unemployment rates. Large numbers of unemployed people often lead to political instability. As Bob Dylan sang in 1962’s ‘Talkin’ New York,’ “A lot of people don’t have much food on their table, But they got a lot of forks, a lot of knives, And they gotta cut something.”
An alternative view might be that employers will keep on their workers, but work them less hard (and at lower rates of pay), perhaps for four days a week. Or fewer. That suggests a redefinition of what it means to work - and what is leisure. Could you exist on 80% of what you get paid now? What about 60%? We might all have to revise our lifestyle expectations. I think back to the Covid days, when we were obliged to stay at home, and had to enjoy the simpler things in life, such as walking in nature, quieter skies, spending time with family and catching up on movies and books that we’d missed. Hmmm... it was enjoyable for a while. Having that simpler lifestyle imposed on us by an AI-powered wave of unemployment might be different.
As I mentioned in last month’s ‘Last Word,’ if we are put out of our jobs by AI, where will the governments go to raise taxes for the services we demand? Could it be that they will be obliged to raise taxes on the profits of the companies that are now using AI to do the work that we used to do? How high could those taxes go? Following controversy about multinationals seeking countries with the lowest-possible tax rates in which to incorporate (Ireland, I’m looking at you, at 12.5%), more than 135 countries have now agreed to a 15% minimum effective tax rate for large multinational enterprises. As more countries sign up, and loopholes are slowly closed, I believe that corporation taxes will rise, probably to at least the US level, of 21% federal tax plus local taxes. With governments desperate to generate tax revenues, expect those rates to climb higher.
If AI is really the revolution that has been forecast, perhaps the unemployment level (or perhaps the ‘under-employment rate’) will be higher. It may be that governments will need to redistribute some of the profits of the AI-powered companies to the under-employed populace, partly to allow them to afford to buy some of the things that the economy needs to sell to them in today’s consumerist society. After all, if no-one can afford to buy anything, the economy comes to a screeching halt. Universal Basic Income, UBI, a guaranteed regular cash payment from the government has already been trialled (in fact, for centuries1), and has been found to reduce poverty and to provide a safety net against unemployment, however basic.
There have even been calls for states to nationalise or appropriate the AI-powered means of production, although a simpler solution would be to tax them at 100% of their profits. How ironic would it be for the tech titans of Silicon Valley to labour to produce god-like AI technology in the capitalist society, only for them to effectively usher in a system - with UBI and nationalisations - that looks oddly like communism?
