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Employment situation remains precarious coming out of the pandemic

The post-pandemic economic recovery – already underway, despite the pandemic being in the present rather than past tense – is already showing signs of a labour shortage. That could lead to higher wages in some cases as employers bid for more workers, but it could also see an uptick in automation as companies look for both predictability and cost-savings.

We’re already travelling down that path. A much-cited 2013 Oxford University study, for instance, predicted that machines might be able to perform half of all jobs in the next two decades. Others have followed up the study with research of their own, with the pandemic putting a spotlight on the future of work, along with the likes of remote working, shifting demographics and housing.

A McKinsey Global Institute (MGI) study from earlier this year hones in on the pandemic’s potential impact on how and where we work. The group predicted that a quarter of the U.S. workforce, some 45 million people, could lose their jobs by 2030, up from the 39 million predicted in 2017. The increase is linked to COVID-19.

“COVID‑19 accelerated three groups of consumer and business trends that are likely to persist: remote work and virtual interactions, e-commerce and digital transactions, and deployment of automation and AI. Our research suggests that the disruptions to work sparked by COVID‑19 will be larger than we had estimated in our pre-pandemic research, especially for the lowest-paid, least educated, and most vulnerable workers,” MGI notes in the study, The Future of Work after COVID‑19.

Such conclusions reflect a generally negative view of technology and the nature of work. Technological change has long had an impact on how we work, displacing many jobs and changing the workplace, for better and for worse, at an accelerating pace since the advent of the industrial revolution. Some jobs are eliminated only to be replaced by new ones we never imagined existing.

Advanced technology is the norm today. Automated transportation, from cars to airplanes, is safer, more efficient and much less costly to operate – computers don’t fall asleep, take bathroom breaks, drink on the job or a host of other human foibles. For all those reasons, driverless is the future of transportation.

This isn’t science fiction anymore. It’s here, and the technology’s spread is inevitable. The same transformation will migrate to many fields. Not just McJobs, but into accounting, medicine, teaching and host of other jobs that now pay well, and are typically considered safe.

Once upon a time, automation was a panacea that was to lead to a mythical leisure society – the machines would do the work, while we reaped the benefit of reclaimed time to do what we wanted rather than the drudgery of work. As we’ve seen so far, technology has extended workweeks and displaced people from high-paying to lesser jobs. There’s no reason to believe that will change as technology continues to change the way work is done.

But it’s not all doom-and-gloom.

In looking at the McKinsey research, Slate’s Kevin Carey reports there is perhaps less reason for alarm than such studies would indicate.

He notes that the last 150 years has seen the U.S. go from a nation of farmers to a nation of factory workers to a nation of white collar and service employees, with the change driven by automation – new inventions create new markets and jobs to go with them.

“The soberest predictions of automation job loss still rely on a lattice of interlocking predictions that may not come true. Five years ago, it seemed like we were on the cusp of robot taxis and freight trucks becoming widespread. Today, we’re stuck on the cusp. The last mile between ‘almost good enough’ and ‘good enough’ can be very long,” he writes.

“Even the simple, routine tasks that are the heart of most job loss scenarios can be fiendishly difficult to automate. Amazon uses hundreds of thousands of cutting-edge robots in its warehouses. But they’re not androids that pick items off of shelves. The robots are the shelves, which move to humans, who still do the picking.”

That more optimistic bent is reflected in a new study from the Vancouver-based Centre for Future Work (CFW), Bargaining Tech: Strategies for Shaping Technological Change to Benefit Workers.

Given that the report’s author is  CFW director Dr. Jim Stanford,  an economist and former director of policy for Unifor, the optimism in part stems from the prospect of technology enabling workers rather than today’s reality where technology is driven for and by the wealthy and employers.

“Overblown and gloomy predictions that new technologies will cause large-scale technological unemployment are misplaced. Properly managed, in ways that are accountable to all stakeholders (not just employers and owners), many emerging technologies could improve jobs and working conditions, lift living standards, and support sustainability,” he writes in the report co-authored with long-time labour policy researcher Kathy Bennett.

“But technology can also be misused, applied in ways that undermine working conditions and living standards – especially when employers are given free rein to control the direction and implementation of technology solely in the interests of their own profits. This is why it is essential, if a more harmonious and inclusive high-tech future is to be realized, that workers have countervailing power to advance their own interests and concerns as technology evolves.”

Some technologists have forecast that automation will lead to a future without work, while other observers have been more skeptical about such scenarios.

MIT economists Daron Acemoglu and Pascual Restrepo take a middle-middleground approach in a 2020 paper, Robots and Jobs: Evidence from U.S. Labor Markets.

“We find fairly major negative employment effects,” Acemoglu says, although he notes that the impact of the trend can be overstated.

From 1990 to 2007, the study shows, adding one additional robot per 1,000 workers reduced the national employment-to-population ratio by about 0.2 per cent, with some areas of the U.S. affected far more than others. That means each additional robot added in manufacturing replaced about 3.3 workers nationally, on average.

That increased use of robots in the workplace also lowered wages by roughly 0.4 per cent during the same time period, the study found.

“We find negative wage effects, that workers are losing in terms of real wages in more affected areas, because robots are pretty good at competing against them.”

Optimistic or not, jobs will be lost, certainly. Some new ones will be created, of course, though likely not enough to offset the losses. And there will be skill set mismatches that will add to the challenge – it’s one thing to say people will need to train for new careers, but another altogether to actually do that for millions of displaced workers.

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