Two-thirds of jobs in Las Vegas automated by 2035? The rest of the U.S. isn’t far behind...

Opinion: Two-thirds of jobs in this city could be automated by 2035
Published: July 5, 2017 4:19 p.m. ET

The rest of the U.S. isn’t far behind Las Vegas

Robots are invisibly invading Las Vegas.

By JESS CHEN & JOHANNES MOENIUS

We are walking down the strip in Las Vegas in the year 2035.

The lights are glaringly flashing, music is pounding your ears, the usual nine Elvis look-alikes try to pose with you for a few dollars. A few robots are crisscrossing between the legs of passersby, offering ticket services, information and to be their guide. Self-driving vehicles bring gamblers from casino to casino. A robot group performs a break dance, and you can compete against Robo-MJ in basketball.

Vegas is still Vegas, so nothing has really changed. Or has it?

Maybe it won’t be visible to the eye, but robots may have taken the place where people currently toil to keep the Vegas machine humming. About 65% of all jobs in Vegas are susceptible to automation by 2035 — a bigger share than in any other part of the country. Across the U.S., 55% (or more) of jobs in almost all metropolitan areas face this same scenario.

Who will be at risk? How many jobs will be lost by then? And what will life look like?

Scientists are heatedly debating whether robots and artificial intelligence (AI) will appear as colossally in our lives as some studies predict. Will we really see mass adoption of robots and AI gadgets?

The reality is both technologies already have seen mass adoption and it is foolish not to expect it to accelerate. Every smartphone already is essentially an AI device, and 1.5 billion of those were shipped in 2016. Some 1.6 million industrial robots operated worldwide in 2015, a total that’s expected to increase to 2.6 million by 2019.

Research shows that if all these 1 million additional robots worldwide are merely as productive as those that already exist, each robot would on average replace the work done by 5.7 U.S. workers, or 5.7 million workers in all.

More worrisome is that if robot adoption continued to grow at the same pace beyond 2019, about 18 million industrial robots would be installed worldwide in 2035 and would perform the work equivalent to about 100 million U.S. workers. Put another way, this robotic workforce would be capable of producing the equivalent of the current manufacturing output on the entire planet.

Then there is the robotic invasion of the service sector, where most Americans work. Machines have already displaced service workers over the last few decades (think ATMs and self-checkout stations in grocery stores), but added intelligence allows machines now to take on tasks from room cleaning to radiology.

How quickly this transition can happen can most easily be seen in household services, where robots can substitute for hired services. In 2015, 3.7 million household robots were sold worldwide — and that is expected to jump to almost 31 million annually by 2019. At growth rates after 2019 similar to those we currently see in industrial robots, we can expect annual sales of about 220 million units in 2035.

Right now, these robots mow lawns and clean carpets. They serve food and mix drinks in bars; by 2019 they will perform X-ray analysis with higher accuracy than the average radiologist can provide.

What could they be doing by 2035? Almost everything routine, including highly paid tasks such as routine surgery, regional economic analysis, and flying commercial airplanes.

So the key to understanding what may happen to Vegas — and the rest of the U.S. service sector — is that the recent advances in robotics and AI make those technologies continuously more affordable. Additionally, hardware in many AI applications is less costly than entire robots. Self-driving cars and trucks don’t need much more than added intelligence, and similarly for vacuum cleaners and lawn mowers.

More than 90% of U.S. workers are in a service job, ranging from cashiers to surgeons. Given the expected high speed of this transformation, it will be a gigantic challenge for the economy to create additional or entirely new jobs at the same pace as robots can replace existing jobs.

What will Vegas look like when you drive down the Strip in 2035? Most of the automatable jobs won’t be in the streets, but in restaurants, offices and retail stores. Some 54% of all automatable jobs in Vegas belong to food preparation and serving, office and sales occupations. Where the robots will really make a difference is mostly in jobs at the lower end of the pay scale. But that’s not going to last.

However, not all jobs that can be automated will be automated. It is hard to imagine a high-end jewelry store or designer boutique without sales clerks or a gourmet restaurant without waiters. However, not only will their back offices be staffed more thinly but their sales strategies will likely also change. Foot and even full-body scanners are already available to find the perfect size for shoes and clothes, which can speed up the sales process. And why not have them made to order right on the spot from a machine? Point of sales and point-of-use production are just around the corner.

Whether we all will be able to benefit from this brave new world will depend on our ability to bring education and lifelong learning specifically to those at the highest risk of automation. Those with less than a high-school diploma face a six times higher risk losing their job to a robot than those with a doctorate, such as a Ph.D. or MD.

Given the uneven distribution of education and jobs across racial and ethnic groups, hispanics are 25% and African-Americans 13% more at risk to lose their job to automation than whites. Twice as many women than men work in occupations that are at an especially high risk of automation, such as tellers and cashiers.

Our political leaders are remarkably silent about this issue, despite its explosive potential for the labor market and beyond. By comparison, the historical effects of trade policies are mere ripples on the water. It is hard to imagine a scenario in which the U.S. can scale education and job creation as quickly as international competition for the robotics market can scale the production of robots and AI devices.

And this prospect sends cold shivers down our spines.


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