The Fourth Industrial Revolution

July 23, 2020

By: Tim Vong

We are on the brink of a technological revolution that will fundamentally change the way we work, live, and relate to one another. The “Fourth Industrial Revolution” is coming and we are not prepared to deal with the economic impact of automation as AI is projected to take over the workforce. It is difficult to predict the impact automation will have on our society, and it is even more difficult to come up with a comprehensive and effective plan to counter the economic downfall that we are prone to have. As technology is evolving at an unprecedented pace, it’s important that the world braces itself for change in the global economic environment.

Who will be impacted and what will happen?


The Fourth Industrial Revolution is projected to take over the global economy, but one country in particular that will be impacted greatly is the United States of America. 30% of jobs are subject to automation, meaning that 30% of the American workforce will be at risk of losing their jobs to the development of technology. The top jobs in the USA are in industries relating to retail, food service, administration, transportation (including truck driving), and manufacturing. Being a retail clerk is the most common job in the country, what will happen when they are replaced by self-serve checkouts or when truck drivers are swapped for self-driving trucks? The Feds say that the majority of jobs in America are either repetitive manual or repetitive cognitive, which means people in those industries are at risk of losing their jobs in the near future. Secure jobs include ones that have non-repetitive manual work (eg. hairdresser, house cleaner) or non-repetitive cognitive work (eg. designers, coders). 

    It’s important to note that, although the American GDP has been increasing substantially over the past few years, this is a direct result of automation. Sure, automation makes lives easier by producing quicker, but it comes at a cost. The GDP is not an accurate representation of the state of the American economy; people are beginning to suffer as a result of new AI. Large corporations are gaining from the efficiency of automation, but workers are not. 88% of job losses between 2000 to 2010 were because of technological advancements. According to the Council of Economic Advisers in 2016, 83% of jobs that pay less than $20 an hour have substantial parts of their work that is replaceable by AI.

    Robots are silently taking American jobs away, and politicians aren’t catching on. There has been no change in political policy to address the dangerous threat of automation to the US workforce.

    Along with America, Canada is also forced to face the Fourth Industrial Revolution. The top jobs in Canada include retail workers, cashiers, and transport truck drivers; all of which can be replaced by AI. Experts say that 42% of Canadian jobs are at a high risk of being affected in the next two decades. Jobs involving STEM (science, technology, engineering, mathematics) and/or management are projected to be low risk or secure. 

    What does this mean for Canadians? Canada is actually considered by economists to be more confident and prepared for the Fourth Industrial Revolution, than any other country. This is due to Canada’s true strength, social programs; our country’s willingness to create social programs is what experts say will lessen any future pain automation could inflict. Our country’s social and re-training programs provide a form of insurance to Canadians, resources that aren't available to Americans. Maybe there’s a reason why Stanford economist, Raj Chetty, found that it was twice as easy to achieve the “American Dream” in Canada than in America?

    Ontario’s new math curriculum, announced on June 23, is a step in the right direction as it prepares children for the jobs of tomorrow. Students in grades 1-8 are now taught about financial literacy, coding, and technology. These are fundamental concepts that need to be taught, as we face intelligent automation. 

How do we prepare?

As championed by breakthrough 2020 US presidential candidate, Andrew Yang, implementing a universal basic income (UBI) is vital. Yang's platform proposed a UBI, he calls it the “Freedom Dividend”; a check of $1000 a month for every American over the age of 18. His campaign called for human-centered capitalism, meaning that instead of Americans serving the market, it is the other way around- the market serves Americans. Putting money directly into the hands of citizens will allow for a “trickle-up economy”, therefore, promoting a boost and job growth in the economy. Providing a UBI would enable Americans to pay their bills, educate themselves, start businesses, be more creative, stay healthy (mentally and physically), relocate for work, spend time with their children, take care of loved ones, and have a real stake in the future of the country. 

    UBI provides guaranteed income, which incentivizes people to leave poorly paid jobs for riskier but potentially more lucrative careers such as self-employment, entrepreneurship, or further education. With more creative and independent careers available, workers will be able to work without the fear of being replaced by AI. The resulting climate of innovation will reduce reliance on low wage jobs and the need to compete with technology. It will also support the economy because Americans will invest their $1000 back into businesses, thus creating a “trickle-up economy”, where everyone benefits from spending. 

    How is the government going to pay for UBI? A Value-Added Tax (VAT). All developed nations in the world except for the US utilize a VAT. With a VAT, big companies will have to pay taxes, without any loopholes. Large corporations such as Amazon or Google are good at funneling billions of dollars worth of assets around and overseas, which helps them avoid paying taxes. In fact, Amazon paid zero dollars in taxes last year, because of loopholes. A VAT ensures that companies like Amazon aren’t benefiting from the American people, automation, and infrastructure, without paying their fair share of taxes. With the contributions from these trillion-dollar tech companies, America would be able to afford a Universal Basic Income. 

    Along with this, we can also use education as a tool to prepare us. Education systems worldwide are often outdated. Both Canada and the United States can do better in regards to educating the youth; it’s important we start teaching the right things. Investing in a more modern education system will allow us to train the youth to work along with technology, not against it. Without a curriculum that covers subjects such as coding or financial literacy, youth entering the workforce will be displaced by automation. 

    There is a precedent that suggests changing the education system will benefit the working class. In the 1930s, America changed its school curriculums to focus more on preparing students for the industrial economy, rather than an agrarian one. This adaption put the USA far ahead of Europeans, in terms of the efficiency and skills of workers, as well as the overall economic growth. 

    As we prepare to enter a new economy that will be dominated by AI, it’s important we start training the next generation to be able to handle the rigors of the future economic climate. Jobs that don’t require degrees, such as a cashier or transport truck driver, will be replaced by robots. This means we need higher graduation rates from both secondary and post-secondary schools. As well, we need curriculums that will allow the youth to understand how to work with robots, meaning that students should be learning more about technology in school.

Closing Remarks

    As technological advancements increase, the dangers of the Fourth Industrial Revolution expand. Without a doubt, the evolution of AI can be good in terms of efficiency, but humans are going to be out of jobs. GDP will rise as production rates soar, but the people will be suffering. This is a worldwide issue that politicians aren’t paying attention to. Capitalist countries such as the USA need to implement more social programs to support their citizens in the wake of this technological revolution. Economists suggest that Universal Basic Income is the most efficient way of doing so. Others also suggest that a change in the education system is needed. Automation poses a real threat to the global economy; millions of jobs will be lost in the near future. It’s important we act quickly to lessen the burden AI will have on the economy.


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