Automation at work: how it will impact on jobs, skills and wages

Capabilia
Capabilia
Jun 13 · 5 min read

Impacts of Automation on Jobs, Wages, and Skills

Most people see automation and artificial intelligence as a threat. They feel like it is coming for all of their jobs. With working robots, vehicles that can drive themselves, and other machines that can do the jobs humans can do in hours within seconds, they feel like the need for human labor is diminishing. It is hard to predict the future since some people think that jobs are at risk while others feel that robots and machines will only take a small range of tasks in the coming years.

With the many contrary arguments about automation, it would be better to say that it redefines jobs rather than eliminating them. Take an example of airport kiosks whereby they enhance focusing rather than ruining the workforce. The personnel can dedicate most of their time to more complex issues, and still, the stalls will keep running and reduce time wastage and people waiting in the queue. This is just an example of the many occasions where automation and use of robots have helped without eliminating the human workforce.

Another example is the Amazon robots. As they work and help in giving warehouse orders, the human workforce can focus on anything to do with motor skills, unpredictability, and judgments. These are things that robots cannot be entrusted with. In such case, automation helps both the robots and human workers to focus on what they are best in, and this increases productivity. This allows the human and robot productivity to increase by 50%. This cannot be termed as job elimination but redefining.

Impacts of automation on work

Even with the current technological advancement, very few jobs can be fully automated. This makes about 5% of tasks whereby the whole process in the industry can be done without the need for the human labor force. However, about 30% of different tasks carried out in a specific industry can be automated. These sectors may include acconting, preparation of fast food, customer service, packing or areas with high predictability. These are tasks that are better when done with machines.

However, the type of occupation is not the only thing that will influence the rate at which tasks will be automated by 2030. Other factors that will determine automation include the labor market dynamics, the cost of developing and deploying automation, social acceptance and the benefits of automation that exceed labor substitution.

Considering these facts, it is evident that automation may not have significant impacts on work and employment. While machines are being used to carry out some tasks, individuals can participate in other jobs. Automation will have a minor effect on sectors that deal with social skills, management, and expertise. These are areas where machines performance does not match human performance. Also, jobs which are less predictable such as looking after elders, child care, gardening, and plantation will not be significantly impacted by automation by 2030. This is because they are hard to automate and require low wages making human labor a more attractive option than use of machines.

What are some of the scenario possible for employment growth?

Take an example of some unpredictable tasks like taking care of the elderly. There is an estimated increase of about 300 million individuals who will be over the age of 65 in 2030 compared to 2014. This scenario will lead to increase in demand for human labor force creating more vacancies in nursing, health aides, doctors, and other healthcare providers in many countries. These are occupations where machines cannot be entirely entrusted.

Another example scenario is in investments in buildings and infrastructure. The increase in the need to cub housing shortages and increase the number of roads and other infrastructures is estimated to create about 80 million jobs. These job vacancies include architects, designers, engineers, carpenters, electricians and other construction workers by 2030.

With automation at work, the sectors that are likely to register a significant employment growth entail the industries where the use of machines and technology may not be possible. These include; Healthcare providers, IT services providers, organizations managers and executives, engineers, builders, performers, entertainers and other manual service providers in unpredictable environments such as child and elderly caregivers and gardeners.

Will there be enough jobs in the future

There has been an increase in concerns about whether there will be enough tasks for everyone with the potential automation at work. The impact of automation on availability of jobs in different sectors depends on some aspects which include;

  • The level of wage — Most businesses may decide to turn to automation due to a high salary. However, even low wage countries may be affected whereby companies choose to switch to automation at work to boost quality, increase production and move it closer to end users. This may reduce the need for the human labor force.
  • Demand growth — Countries with high economic growth tend to have a high rate of innovation thus leading to more job creation, unlike slowly growing economies which tend to have few job creations.
  • Population growth — Countries with a rapidly growing population may enjoy having a significantly increasing GDP if they create more jobs unlike countries with a low growing population.

These factors will profoundly determine if there will be enough jobs in future for particular countries. However, to determine the general effect of automation on wages and employment, you have to put both dynamic interactions and the economic impacts of automation. Automation has three primary effects, but people tend to focus mostly on its potential displacement of jobs.

The facts are it may also lead to increase in labor productivity. It allows firms to produce more high-quality products with lower inputs. It also leads to improved economy investment thus higher short-term GDP growth. This way, most countries that shift to automation may be at full employment come 2030. However, there is a way to re-employ the misplaced workers very fast. This leads to an overall lifting of the economy while full employment is maintained both in the long and short-term. In cases where re-employment of dismissed workers takes long, it could lead to increase in the rate of unemployment in the short and medium term. The labor market may, however, adjust over time and they will get jobs but with lower wages in 2030.

Impacts of automation on skills and wages

Skills and education requirements in the sectors that require human force may need to be higher than the level needed for the tasks displaced by automation. Automation can easily displace industries that require only a secondary certificate as compared to areas that need a college degree.

People will focus on activities that machines cannot handle like taking care of elders and children and spend less time on predictable activities like data processing. In such cases, there will be a need for enhanced skills such as interaction and cognitive capabilities for them to handle their duties efficiently.

The unpredictable tasks such as teaching, marketing and construction are expected to create more opportunities for middle-wage jobs, unlike the predictable jobs.

Managing the upcoming workforce transition

Artificial automation and job automation comes with numerous benefits to businesses, users, and bettering the overall economic growth of countries. However, to ensure that everything is balanced and that it does not affect individuals due to loss of jobs, all states need to check these aspects;

  • Increase business and labor market energy
  • Provide transition support and income to laborers
  • Maintain a robust economic growth that supports job creation

People will need to be prepared psychologically for the expected changes in the future of work. They can do this by acquiring new skills with high demand and in sectors that cannot be dispersed by impact of automation.

Capabilia

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