Automation leads to Unemployment? Labour shortages are more likely

Labour Shortage (Strack, 2014)

People are worried.

They are worried about being replaced by automation, and about becoming irrelevant. But as technology writer, Matthew Yglesias states, as technology has increased, so too has the work available. He says that "for society as a whole, [technology change creates] huge leaps forward. Specific individuals did in fact lose jobs and oftentimes ended up with lower wages. But on average, job growth continued and living standards rose." New tech opens up new opportunities.

We no longer need night-soil men. But we do need plumbers. We no longer need candle snuffers. But we do need electricians.

We refine our skills to fill the gaps.

Yes, some people will be pole-axed by the loss of their profession. But most of us will up-skill and move on.

Homo sapiens is a switching predator: we constantly go for the easy, low-hanging fruit. When we sense our effort is no longer worth our reward, we will switch to something else. This is our collective nature. We are the "spray and walk away" animal, so taking positive action on Climate Change, pollution and environmental degradation is difficult (NB: that doesn't mean we shouldn't work hard to take action).

Rainer Strack has predicted that Germany is headed for a labour shortage in the 2020s, which will become a labour crisis by 2030.

In his TED talk, Rainer provides data on the German labour supply, showing the bulge heading for retirement. He says, "So what we know [is...] that the labor supply [...] will go down in Germany, and will go down significantly. Now, what about labor demand?"

He continues "We looked at the GDP and productivity growth of Germany over the last 20 years, and calculated the following scenario: if Germany wants to continue this GDP and productivity growth, we could directly calculate how many people Germany would need to support this growth. And this is the green line: labor demand. So Germany will run into a major talent shortage very quickly."

Germany will run short to the tune of seven million people by 2030. The graph that Rainer provides in the TED talk shows that Germany will be struggling to fill the positions they have by 2017 (and in 2018 had the lowest rates of unemployment since reunification in 1991; Deutsche Welle, 2019).

In fact, it looks likely that regardless of however much automation we put in place, we are going to be short of bodies to do stuff.

I find that VERY interesting, and quite contrary to the current media viewpoint.


Sam

References:

• Chui, M., M., James & Miremadi, M. (2015). Four fundamentals of workplace automation. Retrieved from http://www.mckinsey.com/insights/business_technology/four_fundamentals_of_workplace_automation
• Deutsche Welle (2019). Germany's 2018 unemployment hits record yearly low. Retrieved from https://www.dw.com/en/germanys-2018-unemployment-hits-record-yearly-low/a-46957682
• Strack, R. (2014). TED: The surprising workforce crisis of 2030 — and how to start solving it now. Retrieved from https://www.youtube.com/watch?time_continue=51&v=ux1GxExRUUY   
• Yglesias, M. (2015). The Automation Myth. Retrieved from http://www.vox.com/2015/7/27/9038829/automation-myth