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

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

When Should You Speak to a Lawyer About a Legal Issue?

Legal issues can begin with a simple question, then become harder to manage once formal steps are involved. Many people wait until a matter feels urgent before seeking guidance, even though earlier ...

Daily Bulletin - avatar Daily Bulletin

The strategic rise of Bali as Australia’s next essential healthcare support hub

As Australian healthcare providers grapple with unprecedented operational bottlenecks, a new nearshore model is quietly transforming patient care delivery. Forward-thinking organisations,  including...

Daily Bulletin - avatar Daily Bulletin

Cost Savings and Benefits of Using Used Pallets in Logistics

In today’s competitive logistics and supply chain industry, businesses are constantly looking for ways to reduce operational costs without compromising efficiency and reliability. One of the most prac...

Daily Bulletin - avatar Daily Bulletin

How Fulfilment Services in Australia Help Businesses Scale Efficiently

The growth of e-commerce and modern retail has transformed customer expectations. Consumers now expect fast shipping, accurate order processing, and seamless delivery experiences regardless of where...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

How to Choose a Reliable Hot Water System Installer on the Gold Coast

Choosing a reliable installer is just as important as choosing the right hot water system. A qualifi...

How Microtask Platforms Support Modern Digital Promotion

Digital promotion has become increasingly complex. Businesses communicate with customers through w...

Cosmetic Dentistry Options From a Brisbane-Based Dental Team

You cover your mouth when you laugh. You skip the group photo. Maybe you edit pictures to soften a...

Essential Steps to Handle Sudden Tooth Pain and Dental Crises

A sudden, throbbing toothache can totally stop your whole day, with no warning. When severe pain, ...

Different Types of Power Poles Used in Australia

Power poles are easy to overlook until one needs replacing, starts leaning, or sits directly in the ...

From Application To Court: How Family Violence Orders Work In Victoria

Most people don't learn how the intervention order process works until they're already inside it. So...

Why Businesses Are Choosing Virtual Reception Services

In today’s fast-paced digital world, businesses are constantly evolving to meet the needs of their...

Why Concrete Pools Offer Endless Design Possibilities

Imagine stepping into your backyard and being greeted by a stunning pool that reflects your person...

How Legal Advice Can Help with Driving Offences

Driving is a part of everyday life for many people. It allows us the freedom to travel, commute, a...