Contributor Post Created with Sketch. Report: “Automation Risk Is Concentrated Among Low-wage, Low-skilled Workers”

 

In my new The Week column, I briefly examine whether my fellow American humans are experiencing a “technopanic” right now, and if Silicon Valley is making things worse. (Spoiler: yes and yes!) Indeed, one look at recent headlines about automation — and by “recent” I mean this week — is enough to at least slightly unnerve any worker who’s not a recreational therapist or emergency management director.

Those jobs, by the way, are the top two least automatable occupations, according to a new Ball State University analysis of existing literature on the subject.

Anyway, Bloomberg gives us “Machines Poised to Take Over 30% of Work at Banks, McKinsey Says,” while CNBC offers “Half of American jobs are at risk from automation, new study suggests.” That study CNBC refers to is the Ball State report, mentioned above. It also looks at the risk jobs being offshored, calculating that figure at 25%. Here is the summary:

These studies reveal that roughly one in four American jobs, across the income and educational spectrum, are at risk of foreign competition in the coming years. Much more critically, approximately half of the jobs are at risk for automation. Thus, considerable additional labor market turbulence is likely in the coming generation.

More worrisome, perhaps, is that there is a considerable concentration of job loss risks across labor markets, educational attainment and earnings. This accrues across industries and is more pronounced across urban regions, where agglomeration economies have concentrated all net new employment in the US for a generation.

Indeed, much of the political rhetoric surrounding these job loss risks misses the major policy worries. Job loss risk to offshoring is spread across income and education, while automation risk is concentrated among low-wage, low-skilled workers. Both types of job loss risk are concentrated within labor markets (which we define as a county and all adjacent counties), and urban places tend to offer more resilience due to existing forces of agglomeration….

The evidence outlined above suggests a much higher share of jobs are susceptible to automation and offshorability in the future than in the recent past.

So the people who should be most worried right now about robots taking their jobs are with lesser skills who live outside cities, a point I also made in The Week. The study also suggests some overlap between communities suffering both offshoring and automation risk.

(Note that the McKinsey banking study refers to work tasks rather than jobs. The positive spin: In many higher-skill jobs, automating specific tasks will enable “staff to focus on higher-value work, such as research, generating new ideas or tending to clients,” as Bloomberg describes the McKinsey’s take.)

I think the proper response here is public policy creativity, not a) neo-Luddism or b) the acceptance of a post-work era that you see among many basic income advocates. And, yes, this is a big challenge! But it is to be hoped that “Automation Will Lead To Collaboration Between Man And Machine,” as it has in the past.

There are 13 comments.

  1. Victor Tango Kilo Member

    So, remind me again why we need to import millions of unskilled laborers from third world countries?

    • #1
    • July 20, 2017, at 3:47 PM PDT
    • 6 likes
  2. I Walton Member

    So we need policy creativity? Like open borders and minimum wages, more controls, more public schools teaching gender studies, longer unemployment insurance and more welfare. Policy creativity is the problem, not the solution. We can adjust to these things as we always have in the past if we get our government and our teachers unions and our public schools out of the way. It will still be painful for some, but we will adjust. Oh and maybe when we stop price controls on wages and eliminate federal welfare we could reduce legal and illegal immigration.

    • #2
    • July 20, 2017, at 3:55 PM PDT
    • 3 likes
  3. outlaws6688 Inactive

    Don’t worry. They should either move or get busy dying. Then we can replace them with the poor of the world.

    • #3
    • July 20, 2017, at 4:09 PM PDT
    • Like
  4. Ed G. Member
    Ed G. Joined in the first year of Ricochet Ricochet Charter Member

    Removed by Ed G.

    • #4
    • July 20, 2017, at 4:16 PM PDT
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  5. David Foster Member
    David Foster Joined in the first year of Ricochet Ricochet Charter Member

    “Machines poised to take over 30% of work in banking”

    Let’s see, now. A whole range of back-office bank accounting was automated by mainframe computers starting in the mid-1950s. Check sorting was automated circa 1960, eliminating vast pools of clerical labor and even jobs for drivers and helicopter pilots (to move the checks around). Automated teller machines were introduced on a large scale in the 1970s. These are only some high points of the bank labor reduction that has already taken place.

    I’d hazard a guess that *far* more than 30% of work in traditional banking as it existed in 1950 has now been replaced. Are the future changes really likely to be more extreme than what has already happened?

    Historical perspective, James. It’s missing from far too many of these kinds of pieces.

    • #5
    • July 20, 2017, at 4:32 PM PDT
    • 3 likes
  6. Instugator Thatcher
    Instugator Joined in the first year of Ricochet Ricochet Charter Member

    David Foster (View Comment):
    Historical perspective, James. It’s missing from far too many of these kinds of pieces.

    Agree – why just last month I was wandering around the office wondering what happened to the secretarial pool.

    Later, when I was at Starbucks, I looked up and noticed the surprising dearth of message-boys and couriers.

    • #6
    • July 20, 2017, at 9:43 PM PDT
    • 1 like
  7. Valiuth Member
    Valiuth Joined in the first year of Ricochet Ricochet Charter Member

    Why more immigrants? Let me pose another one. Why more children? Same economic principle is involved. And birth is a bigger factor in population growth and national expense than adult migration?

    • #7
    • July 20, 2017, at 9:48 PM PDT
    • Like
  8. I Walton Member

    We better be careful about this narrative. It’s growing and it’s totally wrong headed. We should instead look at what slows adjustment, new business formation, new types of job training in shops and on the job. We cannot know what will replace technological innovation but it will happen if we let it and letting it isn’t a passive thing, it means removing barriers, and eliminating parasites in and out of government.

    • #8
    • July 21, 2017, at 4:06 AM PDT
    • 1 like
  9. PHCheese Member

    It’s always been the low wage, low skilled that lose their jobs to automation. It would be significant when an economist gets replaced by AI.

    • #9
    • July 21, 2017, at 6:25 AM PDT
    • 1 like
  10. Fake John/Jane Galt Coolidge

    The problem is not really that automation is taking low and medium wage jobs.

    The problem is that automation is taking low and medium wage jobs and that government policies are such that new enterprises are not be created to allow those people that will lose their job to become employed else where. Change government policy so that the economy can grow and this stuff all goes away.

    • #10
    • July 21, 2017, at 8:48 AM PDT
    • 1 like
  11. Dan Hanson Thatcher
    Dan Hanson Joined in the first year of Ricochet Ricochet Charter Member

    And the absolute worst response imaginable is to short-circuit the need to work by implementing a guaranteed minimum income. That would be a disaster of epic proportions.

    • #11
    • July 21, 2017, at 9:20 AM PDT
    • 1 like
  12. Bob Thompson Member

    Valiuth (View Comment):
    Why more immigrants? Let me pose another one. Why more children? Same economic principle is involved. And birth is a bigger factor in population growth and national expense than adult migration?

    I don’t see how this can be correct when the immigration is unlimited and the birth rate among immigrants is more than double the existing population. That’s where the more children are coming from. Have you looked at the public school system lately?

    • #12
    • July 21, 2017, at 12:01 PM PDT
    • Like
  13. Freesmith Inactive

    Valiuth (View Comment):
    Why more immigrants? Let me pose another one. Why more children? Same economic principle is involved. And birth is a bigger factor in population growth and national expense than adult migration?

    Where in Western Europe is that true?

    Where in the US if you exclude recent Hispanic immigrants is that true?

    Why children instead of immigrants? Because they are our offspring.

    Never before in recorded history has such a basic biological fact needed to be argued. Congratulations!

    • #13
    • July 22, 2017, at 4:19 PM PDT
    • 1 like