Yes the Robots are Coming, But Take a Deep Breath and Calm Down

Yes the Robots are Coming, But Take a Deep Breath and Calm Down

In recent times we’ve seen a number of reports about the devastating impact that technology and automation will have on the future of work.  Many are predicting enormous changes, with many jobs replaced or radically altered by AI, casting a large proportion of the labour force into unemployment.  A global underclass of people is emerging, “the Unnecessariat”, which is of no use to an increasingly automated economy. 

These rising fears have led to a growing call for a Universal Basic Income to help cushion the blow when it arrives, including from Silicon Valley tech entrepreneurs busy investing in the same technology such as Mark Zuckerberg, Elon Musk and Richard Branson. 

But lately, some more sober and considered assessments of the impact of technology on jobs and the need for a UBI have begun to emerge. 

In a recent blog, the University of Newcastle’s Professor Bill Mitchell has pointed out that while some occupations disappear due to technology, new occupations emerge.   Particular occupations grow, reach a peak and then decline sharply as new occupations evolve and replace them.  Many occupations today didn’t exist 30 years ago, and were created because technology made them possible.  But Mitchell is concerned that new occupations aren’t emerging fast enough.  He examines the rate at which new occupations are being created while older occupations are destroyed, and points out that the rate of occupational churn in the US in the last few decades is the lowest since at least 1850.  This means that the biggest challenge for the living standards in advanced economies today is technological change and resulting productivity growth not happening fast enough.  To address unemployment, instead of relying on transfers through a UBI, governments need to create jobs.  Mitchell is also a fierce critic of UBI advocates because they fail to acknowledge the link between employment status and wellbeing.  

Others commentators as Andrew Charlton and Jim Chalmers have also pointed out that automation is not a zero-sum game.  As improvements in technology allow machines to perform a growing number of tasks once done by humans, we are relentlessly creating new, complex tasks and inventing new jobs, such as financial advice and wealth management.  Compared to machines, people also have a comparative advantage in occupations where personal service and human interactions are an important part of the job.

But as employment service providers would know, unemployed people whose jobs have been displaced by technology can find it very difficult to transition from a declining occupation to a growing one.  Charlton and Chalmers acknowledge that workers need help to adjust to new jobs, and new approaches will be needed, including job training, skills-matching and relocation assistance. 

According to Charlton and Chalmers, automation, artificial intelligence and robotics offer the opportunity to reimagine what it means to work, and we need to approach this task with a sense of optimism.  It allows us to create new jobs where humans and machines can complement each other, with robots doing routine and physical tasks, and humans focussing on interpersonal, creative and problem-solving task.  This will involve expanding the definition of “job” to include many more activities that deliver value to society than under current arrangements.  This means we need to embrace technology and boost skills, which are the raw ingredients of new job creation.  More automation is needed, with an overhauled education system that equips young people with the skills they’ll need to succeed at work in the near future. 

Their optimism is also accompanied by some warnings.  We will need to ensure that the productivity gains of technological change will be fairly distributed to workers.  A UBI would be regressive and worsen inequality, while missing a great opportunity to continuously reinvent work and find new jobs.