Rapid Automation Poised to Create an Epidemic of Global Employment or Unemployment?


Today’s global workforce is facing an epidemic of unemployment and displacement by new technology.  According to the McKinsey Global Institute, rapid advances in artificial intelligence and robotics could result in 73 million USA redundancies by the year 2030. By 2030, rapid automation could displace 236 million Chinese jobs, 18 million Mexican jobs and 120 million jobs in India.  Japan could lose as many as 30 million jobs, while Germany could experience a displacement of 17 million workers.

Within the United Kingdom, new technologies including online retail have caused the extinction of many well known leading brands.

High street retailers have struggled to compete with the ongoing dominance of Amazon and independent online resellers, especially in electronic goods, which without the expense of high street stores, can significantly undercut their rivals on price.

The obituary of retail attrition looms large, but here are just a few examples:

Maplin, formerly one of the last electronics supplies of it’s kind within British high streets was founded in 1976. It went into administration in February 2018, causing the closure of 200 shops and the loss of 2,500 jobs.

The biggest brand of its kind in the UK, ‘Toys R Us’, was founded in the USA in June 1957.  It went into administration in February 2018 with the loss of 105 stores closures and 3,000 redundancies.

Blockbuster, film and video-game rental firm was outcompeted by the rapid rise of video streaming services like Netflix and Lovefilm.  It filed for bankruptcy in September 2010, causing the closure of 9,000 shops in 25 countries and laying off 60,000 employees.

Kodak, the well-known USA photography film giant, was founded in 1888. At it’s peak, it had 145,300 employees dominating two-thirds of the global market. Unable to compete, it’s demise came with the advent of digital cameras, Instagram, smartphones and digital printing.  It filed for bankruptcy in January 2012.

Clinton Cards, founded in 1968 at one time had twenty-five percent of market share.  It went into administration in May 2012, unable to compete with rivals such as Moonpig and Funky Pigeon, who provide customisable cards posted online.

Woolworths, once familiar in every high street, closed it’s shops in January 2009, leaving 27,000 people redundant.

The jobs most at risk of automation are physical and predictable.  They include: Telemarketer (99%), Loan officer (98%), Cashier (97%), Paralegal and Legal Assistant (94%), Taxi Driver (89%) and Fast Food Cook (81%).

The safest jobs that are difficult to automate are generally less predictable.  They require social skills, emotional intelligence and require a level of human interaction that may take many years for computer programmes to replicate.  Such professions include: managers, engineers, doctors, scientists, nurses, teachers and plumbers.

Education, health and social care are seen as the two sectors least threatened by robots because of the high proportion of tasks seen as hard to automate.

It is important to understand that artificial intelligence and robotics are not the same thing.  Your job may be at risk of being replaced by one but not the other.  In the foreseeable future, it is unlikely that we will see artificial intelligence reaching beyond the bounds of computers, smartphones and webpages.

Automation will affect one in five jobs across the UK.

Change is coming and it’s scale and scope will be unprecedented, impacting different geographies, genders, and socioeconomic classes in many different ways.

The highest levels of future automation are predicted to be in areas of former deindustrialisation and areas of high unemployment such as the Midlands, the north of England, and industrial centres of Scotland.

Automation will eliminate many jobs and create others.  New technology will eliminate many jobs that are repetitive, difficult or dangerous, replacing them with higher value occupations that are better paid, more rewarding and creative.

Whatever this ‘Brave New World’ has in store for humanity, it is time to consider the consequences now.  Will it result in a greater disparity between the rich and the poor?  How will huge numbers of displaced workers unable to earn a living and with no jobs available, support themselves and their families?

With a financially impoverished population, who will buy the goods and services that the robots provide?

We are on the cusp of a new economic revolution.  Visionaries like AI. Robert Schiller, a Nobel-prize winning US economist, and Elon Musk, US entrepreneur, suggest that a ‘robot tax’ should be introduced.  Without the taxable income from displaced workers, tax the robots instead that have taken those jobs.

A universal basic income is a possibility – paying people not to work.  Would such an experiment be effective?  To provide a universal basic income for every citizen within North America to live, would cost the equivalent of a quarter of the U.S. military defence budget, so it is feasible.

The robots would work and create taxable incomes to support us, just like our parents worked, paid taxes and provided for us as children.

Alaska already has it’s own state-run cash handout program in the form of a dividend from oil revenues.  Important lessons can be learnt from this program.  The dividend averages $1,000 (or more) per person, which as Mark Zuckerberg, US entrepreneur, said in a Facebook post: ‘can be especially meaningful if your family has five or six people’.

A note of caution:  With the prospect of a glamorous future where we are paid to enjoy our leisure time while the robots work and provide for us, may seem ideal.  However, areas of high unemployment and government handouts in the form of social security, historically tend to be rundown with high crime rates.

People need to feel valued by participating within and contributing to society in meaningful ways.  If we can make this economic and social experiment work, unburdened from the financial stress of living, people might find it much easier to be creative and have more time to pursue their goals.

Do people want to be dependent on government handouts?  People ideally want to be financially independent, unshackled from the restrictions that government handouts may bring.  It is not simply about the money; it is also about the freedom and independence that money gives you.