Imagining a future where new skills are no help

Questions remain about automation's impact

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In the birthplace of the Industrial Revolution, the Bank of England's top economist is warning about the impact of automation on employment.

Andrew Haldane, the bank's chief economist, said that jobs at risk from automation total about 80 million in the U.S. and about 15 million in the U.K.

The elimination of jobs due to robotics and artificial intelligence with reasoning capabilities is a topic of increasing interest. But there is also a lot of uncertainty attached to this, which Haldane, in a recent speech, acknowledges.

Automation, historically, improves productivity and income, and the lesson of history, said Haldane, is that rising incomes "have ridden to the rescue, boosting the demand for new goods from new industries requiring new workers." During previous phases of growth, workers have moved up the income escalator by "skilling up," thereby keeping one step ahead of the machine.

The need for "skilling up" is an ongoing one in IT, to stay ahead of automation but also in response to offshore outsourcing, where jobs are moved to geographic regions with lower labor costs.

Workers facing displacement are told that they must move to higher-level skills. Theoretically, anyone can improve his or her skills, but the worry is that there will be fewer jobs even for people with these high-level skills.

Coupled with the need to improve skills to stay ahead of unemployment is the "de-skilling" of the workforce, where businesses become increasingly reliant on automation to do professional jobs. Software development is one area where this could happen.

The smarter machines become, "the greater the likelihood that the space remaining for uniquely human skills could shrink further," said Haldane. "Machines are already undertaking tasks which were unthinkable -- if not unimaginable -- a decade ago," such as the driverless car.

"Algorithms are rapidly learning not just to process and problem solve, but to perceive and even emote," said Haldane.

"If the option of skilling up is no longer available, this increases the risk of large-scale unemployment or under-employment," said Haldane. Moreover, the wages for those occupying skilled positions will "explode," and increase the wage gap.

The number of warehouse jobs may decline substantially thanks to automation, but occupations in big data analysis, for instance, may grow. Some economists believe "the job gains and losses will even out over the long run," wrote Darrell West, the director of governance studies at Brookings Institution, in a paper last month about future trends.

West, however, argued that policy makers need to consider the implications of what may be ahead.

"There needs to be ways for people to live fulfilling lives even if society needs relatively few workers," wrote West. "We need to think about ways to address these issues before we have a permanent underclass of unemployed individuals."

This story, "Imagining a future where new skills are no help " was originally published by Computerworld.

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