Read The Times Australia

Daily Bulletin

We can't blame the loss of mid-level jobs purely on robots

  • Written by: The Conversation
imageFriend or foe to the job-seeker?Robot with pencils by Kirill__M/www.shutterstock.com

Several developed countries including the US, UK and Germany have seen their labour markets polarised in recent decades as the number of middle-skilled jobs has declined relative to that of low and high-skilled ones. Technology has been singled out as the main culprit: computers and automation have reduced the demand for mid-level skilled workers in production lines as well as offices, increasing that for high-skilled managers, professionals and technicians. But there has been little or no impact on the demand for low-skilled service occupations.

There is a perception that the range of tasks that can be automated is rapidly expanding thanks to fast technological development. This has exacerbated concerns on the impact of technology on the quantity and quality of jobs. But does the evidence support the view that the future of the labour market is entirely in the hands of the robots?

In the simplest version of this story, as advancements in technology lead firms to demand fewer workers in mid-skill occupations, these jobs should see both employment and wages decline relative to low and high-skill jobs. This should show up in economic data as what we might call “double polarisation”: when both employment and wages grow more in high and low-skill occupations than they do in middling ones. This double polarisation was indeed what happened in the US in the 1990s, but it did not continue into the 2000s. More broadly, wage polarisation has generally not been detected in other countries that have experienced job polarisation, such as Germany and the UK.

The simple story blaming technology alone for taking mid-skilled jobs cannot explain what we see in the data. Other factors are likely to have played an important role, as I have explored in my ongoing research on the situation in the UK.

UK boom in high-skilled jobs

The UK has seen a steady decline in middling occupations since at least 1980. As the graph below shows, growth in top occupations exceeded that in bottom ones in each of the last three decades. This has resulted in a substantial shift of employment from middling to top occupations: out of 100 employees, 19 fewer could be found in middle-skill occupations in 2012 than in 1979. Of these, 16 had moved to higher-skill occupations and only three into lower-skill ones.

imageJob polarisation in the UK.Author provided

This is noticeably different from the US experience, where growth at the bottom has progressively outpaced that at the top, culminating in the 2000s when employment growth was concentrated in low-skill occupations.

A distinctive change that took place in the UK since the early 1990s is the expansion in university education which led to a threefold increase in the share of graduates among employees. The expansion of graduates in this way is different to the US, which saw no comparable increase in the share of graduates over the past 20 years. This increase in the educational attainment of the UK workforce accounts for the entire growth in top-skilled occupations and a third of the decline in middling occupations.

There is no indication that wages in middling occupations have been decreasing in the UK, as one would expect if demand was declining due to the spread of automation. It is instead the performance of wages in high-skill occupations that has deteriorated over time relative to middling ones. It was the worst in the 2000s when wages in the 10% highest-paid occupations grew 10% less than those in median occupations.

During this period, the supply of graduates in the UK continued to grow at the same time as the growth of top occupations in other similarly developed countries such as the US and Canada stalled. This stalling elsewhere suggests that there may have been a wider slow down in the (technology-led) demand for high-skill occupations in the 2000s.

These facts are highly suggestive that the improvement in the education of the workforce has contributed significantly to the reallocation of employment from mid- to high-skill occupations in the UK.

Clerical wages going up

But the evidence from the UK also highlights another possible limitation of the story in which technology simply replaces mid-skilled workers. Since the 1990s, the share of mid-level, clerical jobs in the UK has indeed slowly declined, consistent with the idea that technology reduces the need for people in these occupations.

However, over the same period the wages of clerical workers have grown at a rate similar to that of professional occupations, such as lawyers and doctors, a fast-growing group whose real wages increased by about 64%. Similarly, other studies have also found that in the US, clerical occupations have seen their wages increase in spite of the decline in their relative number.

One of the early proponents of the idea that computers displace mid-skilled workers, MIT scholar David Autor, has argued that, within the same occupation, technology might replace workers in certain tasks while complementing them in others which are more cognitive and difficult to automate – or even expand the range of tasks they can perform. So, while much of the filing work once done by secretaries might now be done by computers, the remaining secretaries are supported by computers in their other tasks and perform a range of new organisational ones that were once the domain of managerial staff.

While there is no doubt that technology is a major force at play in the labour market, the differences in experiences across countries suggests other factors play an important role as well. For the UK, several pieces of evidence indicate that the expansion in university education has contributed to changing the occupational structure of the labour market.

Across countries, there is generally little evidence to support the idea that automation has been dramatically disrupting the labour market in recent times. Instead, there are clear indications that the story is likely to be a nuanced one, where the complex interaction between changes in the skills of the workforce, technology and the way different tasks are bundled into jobs means that the fate of those occupations that might appear most at risk might not be quite sealed yet.

Andrea Salvatori receives funding from the Economic and Social Research Council and has previously received funding from the Department of Work and Pensions and the Low Pay Commission.

Authors: The Conversation

Read more http://theconversation.com/we-cant-blame-the-loss-of-mid-level-jobs-purely-on-robots-42015

Business News

How Telematics Helps Australian Companies Improve Productivity

Operating a commercial fleet in Australia is a uniquely demanding endeavour. Between the sprawling urban sprawl of cities like Sydney and Melbourne and the immense, unforgiving stretches of the Outb...

Daily Bulletin - avatar Daily Bulletin

Inside the Icon: The BridgeMuseum Officially Opens at the Sydney Harbour Bridge

A bold new way to experience one of Australia’s most recognisable landmarks has arrived, with BridgeClimb Sydney officially opening the all-new BridgeMuseum.  Located inside the Sydney Harbour Brid...

Daily Bulletin - avatar Daily Bulletin

Is Your Brand Showing Up in AI Search? Most Melbourne Brands Aren't.

The New Front Door Nobody Told You About Something changed. Quietly. Without a press release. The way buyers find businesses in Australia has been rewired. Not replaced, rewired. Google isn't dead...

Daily Bulletin - avatar Daily Bulletin

How Australian Businesses Can Measure SEO ROI

SEO can feel vague when you are staring at a dashboard full of numbers that do not clearly connect to revenue. The key is to measure the right signals in the right order, then tie them back to outcome...

Daily Bulletin - avatar Daily Bulletin

How Commercial Roller Shutters Improve Site Security Without Slowing Operations

Security upgrades can be frustrating when they make everyday work harder. A door that takes too long to open, creates bottlenecks at shift change, or fails at the worst time can turn “better protectio...

Daily Bulletin - avatar Daily Bulletin

Why a Document Destruction Service Still Matters for Modern Businesses

Businesses generate large volumes of information every day, from staff records and contracts to invoices, reports and customer files. While attention often focuses on how documents are stored, the way...

Daily Bulletin - avatar Daily Bulletin

Bicycle Rack Safety and Space-Smart Storage

Bike storage problems usually show up as small annoyances first: tangled handlebars, scratched frames, and bikes that topple when you pull one out. Over time, those issues become safety risks, especia...

Daily Bulletin - avatar Daily Bulletin

How to Tell if a Childcare Centre Is a Good Fit for Your Child

Choosing childcare can feel like you’re making a huge decision with limited information. Tours are short, centres are often on their best behaviour, and your child might act differently in a new space...

Daily Bulletin - avatar Daily Bulletin

Car Import Timeline: What Usually Happens at Each Stage

Importing a car into Australia can feel confusing because multiple agencies and checkpoints are involved, and the timeline is shaped as much by paperwork quality as it is by shipping speed. The most u...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Gold Migration Lawyers in Liquidation: How the Closure Affects Your ART Appeal

If your appeal was with Gold Migration Lawyers, a recent change to how the Tribunal decides cases ...

The pressure cooker: life in urban Australia in 2026

Australian cities have always been demanding. Long commutes, rising housing costs, busy schedules a...

What Actually Makes a Good Criminal Lawyer in Melbourne

Most people only think about this question once. That is usually too late. Most people charged wi...

Why Working With A Chatswood Tutor Can Improve Academic Performance

Academic expectations continue increasing for students across primary school, high school, and senio...

Is It Worth Getting Solar Panels in Melbourne?

The real question is not whether solar works in Melbourne. It works. The question is what it is co...

How A Diploma Of Project Management Builds Practical Skills For Modern Work Environments

Developing the ability to plan, execute, and deliver outcomes efficiently is a key requirement in to...

How to Choose the Right Football for Every Level

Choosing a football may seem straightforward, but the right option depends on who will be using it a...

What to Ask a Wedding Photographer Before You Book

Booking a wedding photographer can feel deceptively simple: you like the photos, you like the vibe...

Why Stress Relief For Dogs Is Essential For Emotional Balance And Long-Term Wellbeing

Managing emotional health is just as important as physical care when it comes to pets, which is why ...