The new technologies are different from the older ones that displaced low-skill labour. The new ones are displacing mid-level management jobs or skill levels, individuals who have good quality education. Some research even shows very low incomes gaining, especially in services, but middle incomes are the worst affected. In my university the mid-level jobs done by administrative employees with university degree are vanishing (preparing research reports for publications, dealing with student admission, classification, grading and examinations, dealing with correspondence and telephone enquiries etc.). We are doing them ourselves with our advanced laptops and software. Mid-level jobs are also vanishing in banks, as internet banking becomes more common.
A wealthier society should be able to create enough jobs to spread the benefits from technological advances. It might need government help to do so, especially in the transition. The best help that government can give is to interfere as little as possible with the free market in job creation; government’s role should be to support incomes and provide health and other basic services to those who fall through the net. This could range from the limited extent that they are provided in Britain (except for the NHS, which is a time bomb) to the much more elaborate system of support provided by the Scandinavians. But south-Europe style red tape for small enterprises is a disincentive to job creation that ultimately hurts the poor more than the rich.
Job creation will inevitably be in service sectors that cannot be automated. Usually the companies in these sectors are SMEs, and need to be supported with tax incentives and minimal administrative burdens. They should also be supported in the provision of finance, in the way bankruptcies are dealt with and the like. The sectors that are more likely to expand and create more jobs are:
– Health and care
– Hospitality industry – leisure
– Education
– Personal services
– Household services
– Real estate management
We can see where these are coming from. Health and care spending will expand more than incomes because of ageing populations and because good care is a “luxury” that is demanded more and more as societies become richer. The leisure industry will grow because we will have more time, mainly through longer annual leave, and with increasing wealth there will be more travel and more demand for unusual activities. Education will become increasingly a consumption good rather than just an investment in the children of the well-off. Personal and household services are already employing large numbers of employees, as people turn away from these time consuming chores. The history of household work is one where in the beginning there were lots of domestic employees, as young people left the countryside to work in middle class homes in the city. Work was mainly manual. Then household appliances came along, the refrigerator, vacuum cleaner, electric oven etc., and the housewife could do these jobs instead: domestic employment declined to near zero levels. But with rising incomes domestic employees are hired again to work with these machines, making the jobs better paid and more respectable.
One may justifiably ask, are these jobs that will employ people who have good education and are they well paid? The answer is that some will be good jobs and some will be jobs for the lower-skill workers, just as there have always been jobs for lower skills in industrial employment. But most of the new well-paid jobs will come from raising the standards in many jobs that traditionally were considered to be unskilled and poorly paid. Chefs replacing cooks is a good example. Personal trainers are another good example of a well-paid new type of job. Good carers with some medical qualifications replacing unskilled nurses is yet another.
Overall, with the new technology and automation our societies will be richer and more competitive internationally. It is up to us and our governments to discover the ways to spread the benefits widely and make our societies richer, more equitable and better places to live in.
