Technology's impact will not be an immediate end of jobs, but an increasing stress on wages and work environment. You will continue to be paid less for doing more.
Owning income-producing assets (real estate, businesses, IP, etc) is key.
Your future as a worker looks bleak!
http://www.theepochtimes.com/n3/2176159-technology...
Agree? Disagree?
Okay, 25+ year veteran of the tech industry. Was in before the first website existed and have done the bubble and burst.
If I wanted to take the time, I could probably find you this same scare story written in the 1980s, 1990s, and 2000s. The AI and robots are going to take our jobs theme has been around a long time but in 40 years . . . the impacts has been rather subdued.
And while AI has many practical applications, the predictions of the mass extinction of need for humans tends to forget we still have so few actual needs for AI at the moment. I mean, look at this story citing a single example of the burger bot over and over again to stress how easy it is to kill 3 million jobs. But the number of people who cook only burgers is not 3 million. It's not an article written to give one a realistic look at the potential impact of AI and bots, rather it's purpose is to scare you.
There really are a lot of holes in this story. Like noting that there was an economic shift in the 1970s but back in the 1970s computing was a negligible blip in terms to contributing to that change. Yet it then quickly forgets all of the other economic factors which lead to wages being flat vs. productivity and somehow attributes nearly everything to technology after that.
Not that I'm saying that AI won't change our lives or that many jobs will be automated. But someone here suggested we're not that far away from computers being able to write sophisticated applications . . . I don't see that. Right now, AI can barely write very structured copy like stock market reports and sports scores where it's mostly MadLib style plugging in of data. "The market [rose] today [75 points] on [strength in industrials]." Writing quality consumer oriented software would be like extrapolating this neat little copywriting trick into writing a novel. That, I'm fairly confident, won't happen in my lifetime.
But should computers take the job of somebody who was writing market recap reports like a mindless machine anyway? I don't see any harm in that for the job market other than we really should be taking a very close look at how we educate people for the future. Probably 60% of college majors should be done away with or at the very least, no public funds (student loans) should be put towards funding educational paths that will lead to people with skills that have near zero value to society.
I've hired hundreds of college grads over my career and it's so sad to see someone dump tens of thousands of dollars and four years of their life into a degree that makes them less qualified for an entry level job than someone who at least has held a job at McDonald's for four years.
In the past just having a piece of paper from a four year university was enough to guarantee middle class membership. But that's not true anymore. Train people to move up the value ladder so they can get jobs that aren't easily replaced by AI or robots.
One of the causes of income inequality (but far from the only cause) is that there's a shortage of labor in the highest paying fields (which is why they're the highest paying fields). We keep graduating people with degrees, and charging them tens of thousands of dollars, that are over saturating the market with college educated people who aren't prepared for a career path that will lead to middle class incomes. Those that actually get a degree in a field with high demand end up making magnitudes more income than everyone else.
I also find it amusing that the theme of this post was that jobs are going away so invest in RE. Except, evaluating deals is a pretty automatable job. Even property management can be highly automated. Why can't you have a self-serve, totally automated system to place ads, screen tenants, collect rents, and file eviction notices?
If the OP's thesis is correct then the ultra wealthy will simply employ an army of AI bots to scour the market for deals 24/7 and purchase it the same way that bots trade the stock market with little human input. The market will become highly efficient and spreads will become so thin that you'll be lucky to be making $1 a door.
Sorry, you can't have it both ways. If bots are going to automate us all out of jobs your job is just as automatable as everyone else's.
Whenever a tenant moves out, I personally inspect the property to see if there are any damages that should be deducted from their security deposit.
Can your proposed automated property management system do that?
Bill R.
Screen tenants? You can write something that crawls into every aspect of a tenants life and scores them for you. Isn't that what a credit score is anyway, except only on limited level. What if a bot would tell you about what they post on FB or Twitter about? Gathered up data on who they were friends with and gave you an idea of what kind of social circles they associated with?
This already exists in a beginner phase... https://m.youtube.com/watch?v=kSR8G8mfp84
Yes, many employers are starting to use similar tools. Hope people remember to delete those photos of themselves passed out at a college frat party because either in employment or housing it could come back to haunt people.
I have a client who recently purchased a rental property. I inspected it today and found mostly rinky-dink issues. The fan in one of the bathrooms doesn't work. The garbage disposal doesn't work. A smoke detector is missing from one of the bedrooms (required by law).
I informed the owner and set up repairs of these issues.
Can your proposed automated property management system do that?
Today I inspected a property I manage. The tenant moved out and I had the locks changed as required by law. As I was leaving and locking the front door, I noticed that the dead bolt works perfectly, but the doorknob lock does not. You can lock it from the outside using a key, but you can't lock it from the inside. So I had to call the locksmith to tell them to get someone out to fix it.
Can your proposed automated property management system do that? If so, knock yourself out. If not, STFU.
No, because I never claimed that every single aspect of property management could be delegated to software.
But let's look at some of the things that could be done.
When a tenant tells you that they are moving out, it could set off a chain of events to fill the vacancy. For instance, based on the applications your current tenants have submitted it could create a profile of the type of tenant you're looking for, figure out what places are best to advertise to that demographic, and automatically create advertising for you as well as schedule prospective tenants for viewings from those who respond to the ad.
Of course, you or someone else will actually have to show the unit but finding those prospective tenants is a big part of managing your property, right?
Also, you might even be able to get advanced notice when a tenant is thinking about leaving before they have said anything to you. For instance it could monitor their social media accounts and alert you if they have a life changing event like getting married or divorced or a change in employment status. Ideally you would love to be able to do a soft credit pull and see who else has been looking at the tenant's credit report to see if other property management names show up but . . .
If it thinks a tenant may be moving it might monitor certain economic metrics to determine how tight the rental market is at the moment or it could even post a dummy vacancy listing to determine if it should send an offer to incentivize the tenant to stay based on how long it determines it would take to fill the unit with a new tenant.
I could keep going . . . and this is all stuff that you could with existing technology. If we ever got to the point where AI was so advanced like OP has said it was going to get, you could pretty much automate everything other than showings and inspections. And in many cases, it could do the job better than any human because it works 24/7 and is constantly processing data about your units.
I have a client who recently purchased a rental property. I inspected it today and found mostly rinky-dink issues. The fan in one of the bathrooms doesn't work. The garbage disposal doesn't work. A smoke detector is missing from one of the bedrooms (required by law).
I informed the owner and set up repairs of these issues.
Can your proposed automated property management system do that?
Well, given your demeanor speaking to me, I'm thinking anything that reduced your tenants having to interface with you would be +EV.
And, actually, assuming AI were to the level OP had suggested, yes, you would have smart fans in your units and they would be able to report whether or not they were functional. Same with the garbage disposal and smoke detector.
I mean, right now I have a smart thermostat that tells me everything from how much energy I'm using to whether or not it has detected someone in the house. I have smart locks on my doors that can tell me who and when someone entered or existed the house. I have a smart garage door opener that can tell me if it's opened or closed. I don't have them yet but I'll soon be putting in smart smoke/carbon monoxide detectors too.
Today you can buy smart fans that would be able to update their status. Doesn't seem like a stretch for them to add self-check functions and wifi to a garbage disposal. Many appliances are starting to include smart features in them too like refrigerators, washing machines, etc.
Everything you just mentioned is mostly doable today. We don't even need to wait until burger bots have replaced all of our minimum wage McDonald's employees.
How would you define "middle class income"?
To be honest, I don't know how I would define it. It's going to be somewhat regional. Looks like you're from Hawaii, given the price of real estate there I'm sure middle class income is defined very differently than someone in Iowa might define it.
Today I inspected a property I manage. The tenant moved out and I had the locks changed as required by law. As I was leaving and locking the front door, I noticed that the dead bolt works perfectly, but the doorknob lock does not. You can lock it from the outside using a key, but you can't lock it from the inside. So I had to call the locksmith to tell them to get someone out to fix it.
Can your proposed automated property management system do that? If so, knock yourself out. If not, STFU.
Big language from someone that doesn't even have a screwdriver.
The calling stuff can be automated, Fred. Any idiot can do that.
It's those of us that actually correct problems directly on the spot that cannot.
Your argument is weak. Your attitude, worse.
Just my opinion on AI, the day AI gains consciousness, we will lose more than just jobs...
However, I believe in any jobs, if you know how to make yourself irreplaceable, you do not have to worry or being sacked. Whether its some special skills only you can know or do, or just the person who always bring cakes on Monday, you get the gist :)
Very true. Having been through the dotcom boom and bust, I mean, a guy making $75K a year and getting a BMW signing bonus for knowing HTML (which I think I learned in 3 days when Tim Berners-Lee first published the spec) screamed to me that something bad was coming. I used to tell everyone I could, move up the value chain. Figure out how your company makes money and be an integral part of that process or when the axe falls you may find your head on the chopping block.
People who work for an employer really need to look at it in terms of their employer is buying a service. Don't think you're valuable. Be valuable. Can something or someone do your job at a lower cost? Can they outsource your job? Can the burger bot do your job? Can you quantify how much value (i.e. money) you bring in the door for your employer? If you're not bringing in at least 2x what they're paying you, your job is already in jeopardy.
Don't think that because nobody else is available to shuffle the papers or answer the phones that you can't be replaced.
In terms of how a business sees things, you are either a revenue generator or a cost of doing business. Guess which one the business will cut first?
@Jon Q. here too they are opening the micro units and a lot of stuff related to various new uses for space but those are based on an intersection of various trends.
I don't disagree with the sentiment expressed just the timing, predictable effects and outcomes. i just think there will be a lot of changes that make us look back and wonder how we didn't see it coming and how we ever lived differently (like the smartphone today for instance) but it won't be that predictable and the effect will certainly be big over time but not immediate and not as drastic as was implied.
Just because with past trends change came slowly, doesn't follow that these changes will. I don't know if I necessarily agree. Moore's law and thus technological innovation will grow exponentially. That means that you will likely see things begin to change very rapidly.
There has been more technological change in the last 10 years than in the previous 100 years.
Plan for the worst. Expect the best.
Moore's Law is only applicable to certain types of technological problems. If everything could just be boiled down to calculations per second, cancer would already be cured.
At a certain level AI is a people problem. As I stated previously AI is not easy. Even when it becomes more advanced and perhaps even more mainstream, there will be somewhat of an upper limit on the number of people working on problems. AI isn't a magic bullet that figures out how to do everything itself. It is a method of computing that allows a system to learn based on either massive amounts of data or via trial and error.
But ultimately, someone - a human writing the software - needs to understand what problem that they need the software to solve and to understand how to make the computer learn the best way to solve the problem.
Moore's Law would only be applicable after the above criteria have been met, the developer wrote the code, and the computer had to process through many computations to arrive at a solution.
Right now, the bottleneck is:
1. Not understanding the problem correctly.
2. Not understanding how to make the computer solve the problem autonomously.
3. Not enough smart people to solve #1 and #2
For instance, it took an entire team of AI students about 10 years to create a poker AI that could beat a world-class human poker player heads-up.
In the commercial world this exercise would have been entirely unprofitable. First off, the potential profit would be greatly eclipsed by the cost of hiring a team of some of the smartest AI people in the world for 10 years. Second, it would be far more easy and cost effective to teach someone over the course of a year to beat a world-class poker player.
And that was just to beat a poker player playing them one on one at a very specific game of poker. Add a second, third, or ninth player to the mix and they have to go back and and use an entirely different method to solve the problem because certain strategies work well in one environment but will be entirely wrong in a different environment.
Obviously, they will be better able to solve these new problems more quickly but not because of computational power, but because they know what path to take to solving the problem.
So the chance for exponential growth in AI is less tied to computational power and more towards figuring out an efficient method of teaching computers to learn that could be applied across multiple problems.
As @Charles Worth noted, this knowledge is likely to be at an incremental pace rather than an exponential one. Which is why even though people have been talking about AI for 30+ years, and computing power is astronomically greater than it was 30+ years ago, we've only seen incremental AI advancements. Only if there is a breakthrough in AI theory itself will growth become exponential.
Are you sure the breakthroughs you mentioned haven't already occurred?
Uh... you guys are underestimating the power of the unwashed masses.
Post secondary education, excluding medicine and engineering, is already a complete waste of money, as has already been pointed out in this thread. As we reject The Trades and other skilled (but un-sexy) professions that pay well, and the number of underemployed, college degreed, (and entitled) people exponentially increases, something is going to have to give.
The proletariat will have it's say and will get it's due. It will be ugly.
@Jon Q. smugly believes that he will have outsmarted the system by controlling income producing property. He (and I) are going to be in for a rude awakening.
I thought that I was smart too, so I hedged my bets. First, I moved to California and obtained an obscene, unsustainable, ponzi scheme, CALPERS pension. Second, I obtained residential income producing property.
Both strategies will fail.
The public employee pension will be deemed "unfair" and eliminated and the apartment complex will be "property taxed" out of profitability because the concept of Personal Property is no longer tolerable by the Majority. Ah... democracy. : )
Luckily, I am 52 years old and likely will be dead 20 years from now when it all collapses.
Uh... you guys are underestimating the power of the unwashed masses.
Post secondary education, excluding medicine and engineering, is already a complete waste of money, as has already been pointed out in this thread. As we reject The Trades and other skilled (but un-sexy) professions that pay well, and the number of underemployed, college degreed, (and entitled) people exponentially increases, something is going to have to give.
The proletariat will have it's say and will get it's due. It will be ugly.
@Jon Q. smugly believes that he will have outsmarted the system by controlling income producing property. He (and I) are going to be in for a rude awakening.
I thought that I was smart too, so I hedged my bets. First, I moved to California and obtained an obscene, unsustainable, ponzi scheme, CALPERS pension. Second, I obtained residential income producing property.
Both strategies will fail.
The public employee pension will be deemed "unfair" and eliminated and the apartment complex will be "property taxed" out of profitability because the concept of Personal Property is no longer tolerable by the Majority. Ah... democracy. : )
Luckily, I am 52 years old and likely will be dead 20 years from now when it all collapses.
Interesting perspective. Considering that the U.S. has the strongest property rights on earth, I think it's better to own real estate here than anywhere else in the world.
Please clarify why you own multifamily and are on BP if you think investing in real estate is a waste of time?
Yes today it has great property rights but those go out the window in a world like you described. This is not my thinking. Historically that has been the case and many much smarter minds than me have taken a similar position. For instance, Paul Tudor Jones said (related to inequality), " It (meaning the closing of the gap) typically happens in one of three ways– either through revolution, higher taxes or wars". Course some argue that people will just work less but who supports those people? The govt? You have money, are you going to be ok paying huge tax rates basically to support people doing nothing all day?
Interesting perspective. Considering that the U.S. has the strongest property rights on earth, I think it's better to own real estate here than anywhere else in the world.
Please clarify why you own multifamily and are on BP if you think investing in real estate is a waste of time?
Having spent a good deal of time traveling the world and having either lived in or traveled to many third-world and developing countries, I can say that you gain a whole new respect for just how fragile the whole social fabric is. Until your home has been completely surrounded by anti-government protestors who have seized control of the part of the city you live in or seen tanks rolling down your street being pelted with Molotov cocktails by protestors, I understand it can be difficult to grasp just how quickly things can spin out of control.
What the laws or rights are today is irrelevant. You look young enough (and I mean that as a compliment) to not even be aware of what "rights" have already been stripped away because you never knew they once existed.
I'm not preaching any, "Let's all go live in bomb shelters and stock up on canned goods" philosophy but if you know anything about the historical context of the supposed rights that you think that you have, you would be much more aware that a right is a only a right until the government decides that it is no longer a right.
I'm actually an optimist and hope we'll turn it around but anybody who is under the age of 40 and doesn't at least give a total meltdown of US society at least a 5% chance of happening in their lifetime is either hopelessly blind or hopelessly optimistic.
And despite being an optimist, I give it a 10% chance of total meltdown in my lifetime and I'm much older than 40.
RE is a great investment today. It is one of the best long-term investments. But you are truly foolish if you think millions of people are going to be displaced out of the workforce at that rate of change and that RE is going to be completely immune to the fallout.
Interesting topic - lots of different perspectives here, although I think many of you share a view from the Software Engineering side of things. I'm an Automation Engineer, full-time, which I've been doing for about a decade now. I'm a trained machinist (if any of you software geeks even know what that means :-P) a qualified inspector, and have a BS in Mechanical Engineering. I'm also conversant enough with several types of programming to be dangerous.
Specifically, I design Automation Equipment for factories in the Automotive, Pharmaceutical, Green Energy, and many other sectors. These machines typically replace quite a few employees who have what I would consider pretty miserable jobs, or complete tasks that are extremely difficult, dangerous, and/or time consuming for a human to do.
That said, I'm definitely with @Bill R. on the fact that this is a scare tactic article, although some points may eventually prove to be valid. One of the reasons I'm not generally worried about this (besides being in the perfect position to profit like a madman when it happens) is that I know just how far we are from being able to automate simple, everyday tasks. We've been integrating vision systems into machines for quite a while now, and operations that are thoughtlessly easy for a person to do are still well beyond the capabilities of a machine - and that's in an extremely controlled industrial setting. Out in the open world? I'd say we're quite a ways away, if it's even possible.
That said: buy property anyway :-)
That said: buy property anyway :-)
No, I don't move heavy machinery. I just move data. I like it that way. If a program doesn't do what I want, I can kick my computer. If a machine doesn't do what I want it might kick back :-)
I think your last statement (quoted above) sums it up.
IF AI and robotics were to make the advancements at the pace that the article suggests, the entire economy is at risk and RE will be swirling around the same toilet towards the sewer as everything else.
BUT it's highly unlikely. The article is the same tripe published hundreds of times before. It grabs attention and gets people talking but the technology simply isn't there and these articles always downplay the massive level of complexity to get a bot or a robot to do a single controlled task and then make unrealistic projections about how quickly change will occur in the future.
So buy RE. What was posted in the OP isn't going to happen on the scale or at the pace as suggested. But if Tesla starts selling flying cars, run to your bunker in the hills because all hell is about to break loose. :-)
Interesting perspective. Considering that the U.S. has the strongest property rights on earth, I think it's better to own real estate here than anywhere else in the world.
Please clarify why you own multifamily and are on BP if you think investing in real estate is a waste of time?
Having spent a good deal of time traveling the world and having either lived in or traveled to many third-world and developing countries, I can say that you gain a whole new respect for just how fragile the whole social fabric is. Until your home has been completely surrounded by anti-government protestors who have seized control of the part of the city you live in or seen tanks rolling down your street being pelted with Molotov cocktails by protestors, I understand it can be difficult to grasp just how quickly things can spin out of control.
What the laws or rights are today is irrelevant. You look young enough (and I mean that as a compliment) to not even be aware of what "rights" have already been stripped away because you never knew they once existed.
I'm not preaching any, "Let's all go live in bomb shelters and stock up on canned goods" philosophy but if you know anything about the historical context of the supposed rights that you think that you have, you would be much more aware that a right is a only a right until the government decides that it is no longer a right.
I'm actually an optimist and hope we'll turn it around but anybody who is under the age of 40 and doesn't at least give a total meltdown of US society at least a 5% chance of happening in their lifetime is either hopelessly blind or hopelessly optimistic.
And despite being an optimist, I give it a 10% chance of total meltdown in my lifetime and I'm much older than 40.
RE is a great investment today. It is one of the best long-term investments. But you are truly foolish if you think millions of people are going to be displaced out of the workforce at that rate of change and that RE is going to be completely immune to the fallout.
Bill,
No one said "totally immune". I think in the interim it's a good idea to own income producing assets which would help add stable income and or a complete replacement of W2 income if job market grows increasing more volatile. Clearly, as the article mentions, this isn't going to happen tomorrow.
Years ago (30 -- 40 years), just a high diploma did the trick to have a livable income.
Automation took that away.
In the next 50 years, all the wealth will be with a few of the super rich.
In fact, I believe ---
My grandkids, and your grandkids will be under Chinese control!
There will not be a United States of America.
I find it difficult to compare then and now, with all of the changes to the economy that have taken place since. But I agree that automation did take some tedious, low requirement jobs away.
With all the money we owe them and the way our elections are beginning to look, maybe haha....