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The tech revolution that Trump’s economic plan can’t stop

Technologies such as Uber’s self-driving car are going to render traditional human jobs obsolete in coming decades, and no amount of rhetoric from the president-elect – or anybody else – will stop them.

Jared Wickerham/The Associated Press

On the campaign trail, with his signature bluster, he promised millions of new jobs. Manufacturing jobs. Coal mining jobs. The jobs that once made America great.

In economically devastated regions such as the Rust Belt and rural Pennsylvania, Donald Trump's nostalgic message resonated, evoking a time when workers with relatively little education could earn middle-class wages. Support in these regions played a large role in handing Mr. Trump his upset victory on Election Day.

Now comes the hard part. Mr. Trump faces the uneasy challenge of reconciling his past-economy promise with a plan that can succeed in the future. Across the now-globalized economy there is a new world order, a dizzying transformation that is driven by technological change.

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Trade deals can be tweaked, something Mr. Trump says he will do to repatriate some jobs to America's factories. But those factories, and the jobs inside, have been forever changed by a tech revolution. The same forces that have automated the factory floor are helping robots infiltrate industries such as trucking and energy extraction, an evolution that propels businesses to require fewer, more highly-educated workers.

It's a global phenomenon. In a major speech last year, the Bank of England's chief economist warned the United Kingdom is at risk of losing 15 million jobs to robots and machines that replace the work of humans.

In the United States, millions already lack jobs. About one in six men between the ages of 25 and 54 is out of work, and the proportion of the male population that has dropped off the employment radar – not working, looking for work or in school – has doubled over 50 years, according to the new book Men Without Work, by American Enterprise Institute scholar Nick Eberstadt. All of this despite an ever-healthier and better-educated population.

Part of the issue, experts argue, is that Western leaders misdiagnose the problem.

China has been the major target of Mr. Trump's scorn, but it's American companies such as Uber and Google that are developing driverless cars. The technology that powers these vehicles is already being tested to create driverless trucks, a scary evolution for the country's 3.5 million truck drivers. Transport truck driver was also the second-most common occupation for men in Canada in 2015.

"It's always easier to blame someone else, rather than look inward," explained Andrei Sulzenko, an executive fellow at the University of Calgary's School of Public Policy and a former diplomat with Industry Canada. Calling out foreign forces such as China is catchy, too. "It's an easy bumper sticker."

It also takes time to spot the trend. "One of the tricky things about this process is that it doesn't end up working out the way people think it ought to," explained Ryan Avent, a senior editor at The Economist who just released the book The Wealth of Humans, which studies how technology is changing the way we work.

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When we think about dramatic technological change, we often assume it will put people out of work, he explained. But the social safety net isn't so generous that people can afford to not work, particularly in the U.S.

"Instead of mass unemployment, we look around and see a lot of people doing work for crummy jobs for low wages," Mr. Avent said. "The pressure really isn't on employment – it's on wages."

Not recognizing this difference has dramatic consequences. To outsiders – and to global investors – the U.S. economy looks like it is roaring, with an unemployment rate below 5 per cent and stock markets near all-time highs. The reality: Many people in Rust Belt states are employed, but working jobs that don't pay much.

Skeptics argue Western countries have been here before. During the 20th century, the proportion of the United States work force employed by farms fell to 2 per cent from 41 per cent, yet gross domestic product kept rising and unemployment fell to 4.1 per cent by the end of the 1990s.

The worry this time is that it's all happening much more quickly. "Technology appears to be resulting in faster, wider and deeper degrees of hollowing-out than in the past," Andy Haldane, the BoE economist, said in his 2015 speech. "Why? Because 20th-century machines have substituted not just for manual human tasks, but cognitive ones too. The set of human skills machines could reproduce, at lower cost, has both widened and deepened."

Canada is in on the revolution. Ottawa-based Geordie Rose, a theoretical physicist, is developing robots that perform factory and warehouse tasks still reserved for humans, such as sorting and manipulating items. After that, the goal is to build robots with human-like intelligence.

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Our memory of the industrial revolution is also a problem. "We have this idea in our heads that it was a period of great progress, in which everything got better," Mr. Avent explained. "But it really was very, very messy."

Although there definitely was progress, it took decades – or even centuries – to emerge. The first stirrings of the revolution cropped up in mid-18th century England, but from then to the mid-19th century real wages barely moved. And to benefit from the revolution's job boom, people had to move to cities that were hellish to live in – they were crime-ridden and full of diseases.

"It really wasn't until the middle of the 20th-century that we had an industrial economy across advanced countries in which most workers were really benefitting in a significant way," Mr. Avent said. That means it took roughly 200 years to truly benefit, and prospering required the rise of trade unions and the development of the social safety net.

The lesson here is that the type of dizzying change futurists started to predict in the 1960s could disrupt developed economies for decades – if not centuries. And in the process, there are scores of questions for governments about how to deal with all of the displaced workers.

Mr. Sulzenko has a summer home in Ontario's Prince Edward County, one of the province's most economically troubled regions. It used to be a farming area, but farming is now a much more efficient industry. "What are you going to do with these folks?" he wonders. "They're not all going to get re-trained and go to Silicon Valley. There's a huge social and economic problem."

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