Yes, automation can destroy jobs... but it can also create them
Economy Watch by Paul MacFlynn
In recent years, we have become accustomed to seeing doomsday headlines predicting the rise of the robots and the end of work as we know it.
It sounds like the premise of a low-budget science fiction movie, but for many, the forward march of technology is a very worrying prospect.
The first thing to be said is that the current climate of concern surrounding automation technologies and robots is nothing new.
Since the dawn of the industrial revolution, technological advancements have been introduced into the production process in order to replace human effort and each time, similar fears abound.
It was computers in the 1970s and 80s, it was the internet in the 1990s and 2000s. Now it is artificial intelligence and its ability to automate service jobs that is of most concern. It is true that the next wave of automation technologies does have the potential to replace a large amount of work within our economy, but exactly how this will ultimately impact Northern Ireland's labour market is a more complex matter, for a number of reasons.
Firstly, it is unhelpful to think of technology as replacing entire jobs or occupations. New machines or software are developed and designed to carry out specific functions and tasks, not job descriptions. In reality, most jobs require a mix of tasks and while some can be easily automated, others cannot. Looking at the task structure in particular jobs therefore provides an estimate of exposure to automation which is perhaps not quite as dramatic as you might expect.
At the Nevin Economic Research Institute, we looked at Northern Ireland's exposure to automation-related job loss, based on the task structure of occupations. We estimate that around 7% or 60,000 jobs are at high risk of job loss from automation technologies. A further 58% are estimated as being at risk of substantial change to the tasks involved in their job over the medium term.
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While these figures are lower than other estimates, they still imply a large number of job losses. That brings us to the second point regarding automation: yes, it can destroy jobs, but it can also create them.
Looking back over the last 150 years, technology has destroyed millions of jobs, but it has not destroyed employment. The labour that has been replaced by machines and computers has been utilised in other areas of the economy, and it is these new jobs which should concern us most.
Losing any job is painful for those involved, but if it is replaced by new work which is equally rewarding and equally rewarded, then the pain can be mitigated.
Looking at the experience of job creation over the last number of years, this does not appear to be the case. While the quantity of jobs created may have kept pace with the numbers that were lost, the quality of those new jobs is another matter.
As technology began to replace jobs in traditional sectors such as manufacturing, new jobs were created within the services sector. In terms of job quality, the economy has not been replacing like with like. What the data shows is that many people moved to better jobs, but there were also many people who lost out.
This polarisation of the labour market into 'good' and 'bad' jobs is the real legacy of technological change. In much of the policy debate surrounding automation, we have deluded ourselves into thinking that as technology advances it would only replace jobs at the lower end of the distribution and therefore everyone would move up. This has emphatically not been the case.
What technology has shown is that many of the jobs that we consider to be at the bottom of the distribution are jobs that will likely never be replaced by technology.
The question that naturally beckons is; if a job cannot be replaced by technology, surely it should become more valuable as a result? Yes, in theory; no, in practice. Many of these 'bad' jobs are in industries such as social care and they are a growth area for employment.
However, as these jobs have become more numerous and irreplaceable, they have not improved their relative position in terms of pay or job quality. One reason for this, is that much of the work associated with bad jobs is work that is not appropriately valued by the economy.
In particular, much of the work carried out in the care sector is provided by females and is undervalued because it is synonymised with unpaid care work usually carried out in the home.
The policy response to automation should be centred on improving job quality across the labour market, but particularly in those sectors that have been undervalued for too long.
If we have a labour market with strong collective rights and bargaining, it will become easier for workers in 'bad jobs' to fight for and achieve better conditions. If we have a fit and relevant skills infrastructure, we can begin to recognise and reward skills in order to build career progression within these sectors.
Technological change is a good thing. It is key to achieving elevated rates of productivity, something which is desperately needed in Northern Ireland.
Technology can also create better and more rewarding working environments.
However, none of this is inevitable and the policy and institutional approach we take to automation will determine this.
In next week's Economy Watch, we hear from Jordan Buchanan of the Ulster University economic policy centre