![]() This can be seen say in the fast-food industry (employment levels in this industry peaked with market saturation), as with the mobile-phone industry (again, employment levels in their production peak with market saturation). There comes a saturation point where hot-dogs reach a peak consumption, and the rise of employment in that industry will remain static. Will demand for hot-dogs continue to rise inversely proportioned to their cost? No. Imagine the price of hot-dogs has been reduced so much that the cost of production is now trivial, and hot-dogs are no longer a treat but are in abundant supply. While this might seem like a rosy rationale to explain why technology hasn’t seemed to effect employment numbers to any great degree over the past half century, it falls short on two levels:įirstly, on an economic level – the hot-dog analogy only maintains employment levels or increases the levels of employment when there is latent demand for hot-dogs in the economy. Therefore, the company might actually hire more people in aggregate than it did initially to fulfil the two tasks as yet unautomated. Instead, the result is likely to be that the cost of hot dogs comes down, this is reflected in the price of hot dogs as rival stands also start to automate – and the lower cost of hot dogs creates a surge in demand. Imagining that the company invests in automation to do one of these functions (say preparing the sausage), the result isn’t simply the unemployment of the sausage producers, nor is it the suppression of wages as the former sausage producers move into baking and bun filling. Those that prepare the sausage, those that bake the bun, and those that put the sausage in the bun. This same analysis was neatly captured in an analogy painted by Paul Krugman back in 1997 which he imagines a hot-dog stand that has three types of workers. The optimism the authors feel for the limited (read: 10% unemployment) effects of automation on the economy is that increased automation actually might increase employment in other industries as automation will lead to higher productivity, higher wages, and therefore higher demand for consumption. Reference to this point would have been worth noting in the report, as the long term effects of the transition of these workers is still being felt today. Even taking the most optimistic view of the future that the IPPR hold, that only 10% of jobs will be eliminated through automation, then this would be a much greater number than the 200,000-strong UK mining industry that rose up against Margaret Thatcher in the early 1980s. It’s hard to square these findings with the toned-down response that “jobs will be transformed, not eliminated”. The article also seems to support Artz’ 2016 findings that 10% of UK jobs are at a high risk of automation and that by the mid-2050s (which, to put into context will be when my son will be the age I am now currently) half of current work activities in the global economy will be automated – and that this is likely to be true also for the UK. The conclusion of the analysis is that mass unemployment is a highly unlikely scenario, although makes much of the 2017 McKinsey report that indicates as many as 60% of occupations have at least 30% of activities that are automatable. This is predicated on a lengthy analysis looking at the effect of automation on the workforce and on unemployment rates more generally. The tone of the report can be summarised as “automation will transform the workplace – we need to act now to ensure the impact is fairly distributed”. The report is split into five sections, initially reporting the findings of the analysis conducted by Matthew Lawrence, Carys Roberts and Loren King of the IPPR and then moving on to suggesting measures that can be taken to avoid some of the pitfalls they foresee by the current trajectory of this technology. Where appropriate, the report’s findings have also been critiqued. While the report comes on the back of a wave of activity during 2017 on the subject “Will Robots Steal our Jobs”? It’s refreshing to read a piece that considers a range of factors such as capital v income inequality as well as the ethical regulation of technology and technology companies.įor those who don’t have time to read the full 56 pages, this article is aimed at the lay reader who is seeking a more measured view than The Sun’s “Jobs Terminatored” headline which followed the publication of the report. Yesterday (28th December 2017), the IPPR (a UK think-tank) published their report into the effects of automation on the economy and posited some suggestions as to initiatives that might be put forward to address the problems foreseen ( ). ![]() Managing Automation: Employment, inequality and ethics in the digital age ![]()
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