JD Lasica/Flickr



Labor Day in the Age of Automation

A lot has changed in the more than 100 years since Labor Day was first celebrated. To most of us, Labor Day’s origins and meaning are long forgotten. In the context of our modern society, on the cusp of a Fourth Industrial Revolution, what does Labor Day mean now?

The Labor Day holiday we celebrate has its origins in the violent struggle between industrial workers and industrialists/capitalists in the late 1800s, during the 2nd Industrial Revolution. This was a period of workers and skilled craftsmen (small business owners) being replaced by machines via mass production. Workers competed with machines by putting in long hours and working in hazardous conditions, only to turn their money back over to their employers though company towns. Within this context we have the triggering event for Labor Day.

It was the spring of 1894 that saw the Pullman Strike shutdown of most of the U.S.’s rail system, the deaths of 30 workers and over $80 million in damage. Beginning on May 14, 4,000 workers for the Pullman Company began a strike in response to wage reductions resulting from declining rail business. Confounding the wage cuts was the company town, where there Pullman Company also owned the housing and stores. While wages decreased, living expenses remained the same, causing significant financial hardship for the workers.

By June 26, 1894 the American Railway Union became involved with its members refusing to work on trains that contained Pullman cars: 125,000 in 27 states were involved. The strike later spread to 250,000 railway workers from 27 states, crippling rail transportation west of Detroit, MI. President Grover Cleveland received a court injunction for strikers to stop interfering with the delivery of U.S. Mail by rail. When strikers refused, the president called in the U.S. Army to put an end to the strike. More violence between workers and government forces broke out, but eventually the strike ended.

Today we are at the beginning of the Fourth Industrial Revolution. Mass automation is projected to eliminate jobs across entire sectors of the economy while a variety of new, yet unknown jobs are likely to be created. In manufacturing, we’ve already seen robots take the place of people on the assembly line. New forms of automation are being developed to take on more skilled tasks that involve human thinking.

Driverless trucks could eliminate 3.5 million jobs in the U.S. alone. Artificial intelligence is now doing legal analysis, marketing and much more. Robots are increasing their presence in warehouses. Amazon Go may be leading the way to the cashier-less store.

Of course, like in past industrial revolutions, many new jobs will be created as well. However it’s hard to imagine and prepare for what those jobs may be, especially when they depend on emerging technologies like virtual reality, blockchain or artificial intelligence. What happens if newly created jobs are not aligned with the skills or location of those who lose their jobs?

In a November 12, 2015 speech, Andy Haldane, the Bank of England’s Chief Economist, indicated that 15 million jobs in the UK and about 80 million jobs in the U.S. are at risk of being replaced by robots.

The sharing economy also has created tensions between the owners of traditional services, like taxis and hotels, and those looking to improve their well-being by participating in the sharing economy. Protests against Uber, Lyft and other ride sharing services have even turned violent around the world. Battles are being fought through regulations and lawsuits brought by traditional providers against sharing economy provides, like Airbnb.

Movements like Occupy Wall Street and the growing rhetoric against the 1% add to the mix of economic tensions between the workers and the owners of capital. The 2016 U.S. presidential election was largely driven by a theme of people getting a fair shake and rising up against “the system.” Wealth in the U.S. is increasingly becoming concentrated. Political lines are being redrawn. Could we see a 21st Century version of the Pullman Strike?

The issues that led to the creation of Labor Day were complex. Many of these issues are still familiar today — a living wage, affordable housing, and politics. Tensions are sometimes high, and understandably so when your economic future is at risk. As you enjoy your day at the beach, your backyard barbeque or other fun filled Labor Day activity, here are a few points to ponder.