Part III - Automation and the Evolving Labour Market


8 July 2018



A combination of automation and artificial intelligence could doom modern economies, causing unemployment to skyrocket and exacerbating income inequality to unseen numbers - that is what a 2013 paper has made many think. An Oxford published paper five years argued that 47% of jobs could be automated within less than two decades. This caused many to panic and to believe that automation would decimate employment.

Not only has unemployment maintained reasonable levels, but new employment has been created, often as a byproduct of new technology. Still, a new, less radical, paper in development by the Organization for Economic Co-operation and Development (OECD), whose members are rich and modern democracies, suggests that 14% of employment is highly vulnerable and 32% vulnerable. Importantly, the richer the state, the more likely their employment will be protected from automation.

While studies vary in credibility and argue differing levels of severity, the increasing consensus that automation will pose a threat to employment must be taken seriously. While the counterargument is that one can date back to the industrial revolution to find technological upheaval that replaced an unprecedented amount of jobs, there has never been a technology that can mimic and improve upon human labour to such a degree.

Thus, this part of The Observer’s special report will argue that, regardless of the degree to which employment is threatened, the transformation of the labour market will create enough disruption that states must prepare and adjust current systems.

There are several policies that states have begun to and need to expand in order to properly prepared themselves for the impending labour market shift that will accelerate over the coming decades. These include alterations to the welfare state’s programs, embracing innovative economic policy, and promoting employment in industry free from immediate robotic takeover.

The welfare state needs two adjusts to prepare for automation. The first is a guaranteed income that was argued for in part II of this report. The necessity of a guaranteed income is realized as automation replaces human labour. There will be a significant percentage of the population without employment even in the most reasonable scenarios.  

Many industries including transportation will undeniably be automated, creating a spike in unemployment by at least several percentage points. It is unclear how quickly and to what degree new job creation can replace this. Thus, a guaranteed income will provide livelihoods for these individuals as they seek new work.

The second is education reform. The next generation of workers must be educated in the fields of relevance. These include basic digital and computational literacy. States like Canada have already begun teaching coding in primary and secondary schools. Beyond this, there must be vocational education and retraining programs widely available.

While education reform for youth is necessary for future, the average trucker does not have enough education to easily find another career path. Examples such as these pose more imminent threats to the labour market. By creating institutions that allow learning and retraining throughout adult life dramatic labour market changes will not affect employment rates as sharply. Such retraining must be in fields of technological relevance, whether it be in information technology, engineering, or programming.

Beyond modifying the welfare state, governments need to change economic policy now to ensure that economies of the future still utilize human labour. Excessive red tape in business and prohibitive visas stymie entrepreneurship and the fruition of tech companies. If governments do not improve these policies, they are neglecting the economy of the future and will be faced with rapid unemployment rate rises.

They also must focus on creating jobs that automation is less likely, or will take longer to automate. This means non-routine, creative, and social employment. Specifically, in healthcare, human care, and the service industry. Machine learning has proven exponentially worse in these sectors and will take many decades to replicate the complexities of both multitasking and human interaction.

These adjustments should prepare governments for impending technological changes affecting the labour market. Luckily, there are a few trends already underway that will help modern democracies. A shrinking working population has already added a preventative measure against unemployment, Japan is even facing a shortage of human labour due to its dismal birth rate in recent decades. Further, urbanization rates are increasing, easing the already existing difficulties in finding rural work.

Of course, these policies ought not prolong an enviable mass unemployment that will destroy current systems of democracy and capitalism. Rather, they are meant to propel the citizenry into a new age of technological advancement that will eliminate some of the most dangerous, boring, and impoverishing work. Artificial intelligence and automation are neutral forces; the policies and programs that governments enforce provide the key to whether these forces relegate the masses to impoverished and tedious lives or liberates them to a level of economic freedom yet to be experienced on a global scale.

As this special report contends, modern democracies face a complex path of newfangled threats and dilemmas, but they will emerge greater and freer than before if they choose the right path. This path, which will become a common theme, is towards the future and not the one winding back to the past.