Automation isn’t a threat to our economy

Will robots take my job?’ is a frequently asked question today. So frequent, in fact, that there is even a website – willrobotstakemyjob.com – attempting to answer precisely that question with a statistically accurate calculation. It suggests that a credit analyst, for example, is running a 98 per cent chance of being computerised, while an editor at an online magazine stands only a 5.5 per cent chance of being replaced by a robot.

There is little doubting that automation is already having an effect in the UK. In a 2015 report by Deloitte, researchers found that while automation has resulted in the loss of 800,000 existing jobs, it has also created nearly 3.5million new ones. Deloitte also estimated that the new jobs pay on average £10,000 more than those they replaced, resulting in a boost to the economy of £140 billion. Not all UK regions have benefitted to the same extent: Northern Ireland’s economy has benefited by less than £5 billion; Scotland’s by £10 billion; and London and the south-east’s by £30 billion. Nevertheless, no region has endured a decline in economic performance.

These figures contradict the scaremongering media reports about automation, such as: ‘Robots to take two out of five jobs in some parts of UK with the north likely to be worse off’; or ‘Almost 30 per cent of jobs in towns including Sunderland and Wakefield at risk by 2030 due to automation and globalisation’. These stories focus one-sidedly on the negative effects of automation, and ignore the immense economic benefits it brings.

Now, of course, automation does not affect different income classes in the same way. Jobs paying £30,000 or less have shown to be five times more likely to be replaced by automation than jobs paying £100,000 or more. So since 2001, there are over 200,000 fewer personal assistants, 83,000 fewer bank clerks and 72,000 fewer retail cashiers. These job areas are at an automation risk of 85 per cent, 98 per cent and 97 per cent respectively. However, over the same period, there are over 250,000 more care workers, over 200,000 more teaching assistants and over 100,000 more chefs, despite having automation risks of 50 per cent, 56 per cent and 57 per cent respectively. So the effect of automation really does vary according to job type.

Overall, however, automation looks set to raise employment levels. Almost 75 per cent of business owners in the UK have indicated that they expect technology to have a significant or very significant effect on their businesses’ performance, and that they will employ more people as a result. This is confirmed by the Office for National Statistics, which reports that employment numbers have been increasing virtually uninterrupted since 2011.

Yet still automation concerns some. The Guardian’s economics editor, Larry Elliott, writes: ‘To ensure that, as in the past, technological change leads to a net increase in jobs, the benefits will have to be spread around and the concept of what constitutes work rethought.’ Over in the US, the approach to automation seems more nuanced, with the New York Times reporting on how Amazon’s storage workers are adjusting to the automation of their facilities. The robotic arms that manage the moving and stacking of wooden pallets might have replaced the workers doing this job manually, reports the NYT, but the robots are now managed by these exact same workers, who describe their new tasks as ‘challenging’ and ‘not repetitive’. The same report also contains the following snippet:

‘Many people, including President Trump, blame [Amazon] for destroying traditional retail jobs by enticing people to shop online. At the same time, the company’s eye-popping growth has turned it into a hiring machine, with an unquenchable need for entry-level warehouse workers to satisfy customer orders.

So we need to practice optimism about the opportunities provided by automation. The past shows that technology has often improved our living conditions, and raised employment levels. We need to allow it to do so again.


This article was first published by Spiked Online.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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