An Ignored Factor in Job Loss and Job Change: The “Working Consumer”

The McKinsey Global Institute’s November, 2017 report deals with the future of work (including job loss and change) through 2030, especially in light of automation (and AI). While the report covers a wide array of causes of job change and loss, it, as is usually the case in economic reports, has nothing to say about the role of unpaid non-marketized “working consumers” (a kind of prosumer) in these changes. This omission is especially striking because the report does discuss the implications of the shift from unpaid non-marketized occupations (those that do such domestic work as “childcare, early childhood education, cleaning, cooking and gardening”) to others that are presumably paid and marketized (e.g., workers in the previously non-marketized occupations who are employed by agencies that sell their services in a broader marketplace). The non-marketized unpaid work performed by prosumers is far more important economically than that of the occupations discussed by the report. Further, unlike domestic workers prosumers are not likely to be marketized any time soon.

Among the many examples of the working consumer are prosumers bypassing the services of tellers and doing their own banking via the internet or on ATMs, doing all of the work involved in making purchases (of all manner of goods and services; for example, buying airline tickets online and bypassing travel agents), serving as their own wait- and bus-persons in fast food restaurants, pumping their own gasoline at self-service stations, and so on. While it is the case that this shift to the working consumer leads to the creation of new paid jobs (computer-related occupations relating to the burgeoning online sites), it is likely, at least in the short run, that job loss far exceeds those gains.

The source of the problem lies in the fact that the McKinsey researchers, as well as other economists and technicians associated with these kinds of reports, lack the concept of the prosumer. As a result they are unable to see, let alone analyze and quantify, the prosumer’s role in job change, primarily job loss. While the concept of the prosumer is gaining increasing attention in sociology (and other fields), it has yet to be noticed by economists. Yet, prosumers are doing infinitely more unpaid, non-marketized work than, for example, domestic workers.

It is also worth noting that advances in automation and IT will bring with them an increase in “prosuming machines” that produce and consume largely on their own. Such machines are likely to lead to significant job loss in the future.  For example, autonomous vehicles will be a cause of job loss for Uber, taxi, truck drivers, as well as those in associated occupations. However, far greater job loss will result from the interaction of working consumers and prosuming machines (e.g. the use of ATMs rather than human bank tellers).

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Prosuming Machines: Some Recent Advancements

In 2015 I published an article on “prosuming machines”, or those that are able to produce and consume more-or-less simultaneously and increasingly without the intervention of human prosumers. While the human prosumer has recently been rediscovered in the academic literature and much attention has now been devoted to the topic, the irony is that the human prosumer is in the early stages of being supplanted by prosuming machines. A few recent developments in this area are worth mentioning.

The most advanced prosuming machines, at least the ones that seem closest to wide-scale acceptance and use, are self-driving automobiles (including taxis), as well as trucks. Automobiles are difficult to automate since they must be able to navigate crowded and complex city streets. However, since much of their time will be spent on straight, often nearly empty, highways, it is proving to be much easier to automate trucks, especially those devoted to long-distance hauling. Furthermore, trucking companies have a huge incentive to bring self-driving trucks online since they will lead to a dramatic reduction in various costs associated with human drivers such as pay, insurance, and other expenses (e.g. lawsuits) associated with accidents caused by human error. Of course there will be other kinds of losses associated with the automation of trucking, such as jobs (especially long-haul truck drivers) and those now to be had in truck stops.

In the area of Artificial Intelligence (for example, Google’s AutoML), we will see the elimination, at least some extent, of highly skilled human prosumers. This will occur as a result of automating the production of new forms of AI (and algorithms) based on algorithms that learn (a form of consumption) on their own. This development is driven, in part, by a shortage of humans (as prosumers) skilled enough to do the work.

Then there are the advancements in smart (or digital) pills (e.g. anti-psychotics such as Abilify). Such pills have built-in sensors that are not only consumed by humans to, hopefully, produce the desired effect on them, but more importantly to produce information on their use to be consumed by other interested parties (relatives, doctors, etc.). The goal is to help insure that people, especially the elderly and the mentally ill, not only actually take the medications prescribed for them, but that they use them in the appropriate manner (dosage, timing, etc.). Another objective is be sure that patients (e.g. those who have just had surgery) do not abuse the use of drugs such as opiods. Also in the works, as well as in limited use, is the “exercise pill” (or “exercise-in-a-pill”). After such a pill is ingested (consumed), it produces biochemical changes with the beneficial effects (lower blood pressure, lower cholesterol, and weight loss) associated with exercise, but without the need to move a muscle.

There will continue to be dramatic advances in prosuming machines further limiting, if not eliminating, the human prosumer.