Robot tax could stunt innovation, entrepreneurship

A new study by the McKinsey Global Institute about the potential of automation should serve as a stark warning to all world leaders that they must prepare for what may well be the biggest societal and economic upheaval in our lifetime.

The report builds off this core finding: In about 60 percent of occupations, at least one-third of job tasks could be automated and performed much more cheaply by robots or algorithms. As a result, McKinsey estimated that at a best guess 400 million people worldwide would need to change their occupations by 2030, with the number increasing to 800 million if the transition to automation in many job categories occurs faster than expected.

As many as one-third of all U.S. jobs could disappear.

But McKinsey doesn’t see this as the death knell of employment. Labor markets adjusted to past technological advances, the study noted. And history suggests that by 2030, nearly 10 percent of new jobs will be in categories that didn’t previously exist.

“(With) sufficient economic growth, innovation, and investment, there can be enough new job creation to offset the impact of automation,” the study noted. “A larger challenge will be ensuring that workers have the skills and support needed to transition to new jobs. Countries that fail to manage this transition could see rising unemployment and depressed wages.”

This gets to a point The San Diego Union-Tribune Editorial Board has made for years: Technological advances will keep disrupting one industry after another. That’s why it’s crucial for our government to make it much easier for younger and older workers to have access to job-skills training. To achieve this goal, though, America needs wise leaders.

Which brings us to San Francisco Supervisor Jane Kim. An Associated Press story in September about her interest in taxing companies that use robots or algorithms to replace humans caused a stir, and recently The Wall Street Journal reported that Kim wants to have a statewide ballot measure on such a tax. Kim’s Jobs for the Future Fund says the revenue could “be used on education, retraining and targeted investments in new industries. This modest tax will help smooth the transition for our workers, providing them with better opportunities.”

Kim deserves credit for appreciating the coming disruption with a clarity that few politicians seem to have and her proposal has a superficial appeal. It’s worth noting that Microsoft founder Bill Gates also thinks a robot tax of some kind might be good idea.

But what Kim wants is in effect a state tax on efficiency and innovation — one borne uniquely by California companies. The San Francisco Bay Area has become the de facto tech capital of the world because of bold, disruptive technologies. The last thing these communities should do is to punish their entrepreneurs for their brilliance.

And the idea of the revenue from this tax being use for “targeted investments in new industries” is ominous. The state government must not be in the business of picking economic winners and losers.

If Kim’s idea jump-starts a debate about job skills in the coming automation era, that would be great. But in these angry, emotional times, it’s also possible her idea could morph into a Luddite populist uprising that paints tech innovators as tools of the 1 percenters. That would be the worst way to deal with the automation revolution. Being smart about this revolution is the challenge of our time.

— The San Diego Union-Tribune