There was a time when ‘robots taking our jobs’ stories were coming out with such frequency that the only people safe from our robotic overlords would be the soothsayers warning us of our impending doom. The torrent has become something of a trickle since those halcyon days, with a distinct lack of any kind of jobs Armageddon resulting from the somewhat lacklustre progress made by technology in the past few years.
Alas, the trickle does nonetheless still provide space for new attempts to shed distinct light on a crowded space. The latest of these comes from a Dutch team who have attempted to provide a quantitative analysis of the impact of automation on the Dutch workforce.
The researchers trawled through 16 years of government data on around 36,000 firms and 5 million workers to discover that roughly 9% of workers were employed at firms who had made a big investment in automated technology. Despite this investment, a pretty small number of workers had actually been affected, with the researchers putting the figure at around 2% who had left their job as a result (although the researchers readily admit that they couldn’t distinguish between those who were fired and those who voluntarily left.
Should we be worried?
You might look at those stats and believe them to be nothing to worry about, but the researchers aren’t so sure. They reveal that those who do leave the workforce tend to have a difficult time re-entering it again.
This should perhaps come as no surprise however, as there is a significant library of research showing that lower skilled people struggle to re-enter the workforce when their livelihood has been disrupted. Indeed, after the mining industry fell in the UK, research suggests that as little as 20% of miners had found new work up to a decade after their mine shut down.
The Dutch study emphasizes this nicely, as workers who are regarded as highly-skilled managed to find new work relatively easily after their old job was automated. Despite highly skilled jobs tending to be those most affected by automation, the biggest impact was overwhelmingly on those with less skills.
It’s perhaps also important to note that the authors find that the impact on workers is much greater from traditional layoffs than it is from technology-induced redundancies. Whereas just 0.8% of workers lost their jobs due to technology, up to 7.2% lost their jobs as a result of mass layoffs.
“Moreover, while plant closings or mass layoffs affect a large number of workers all at once, the effects from automation happen more gradually, giving workers more time to react and adjust,” the authors explain.
Measuring the impact
The authors believe that the biggest impact of automation is in the lost income of those displaced, and the time they spend out of work. The data showed that after a spike in investment in automated technologies, workers can lose out on around €3,800 over five years.
Interestingly, those hired most recently suffered a much lower drop in earnings, with the authors suggesting this is because the lower barriers to adaptation being new in the job presents. When people had been in the job for a longer period of time, they struggled to re-enter the workforce again.
The researchers also examined the income of those ‘left behind’, ie still employed at the firm, and they noticed very little change as a result of the technological investment. Likewise, those who were quickly re-employed elsewhere also suffered no noticeable drop in their long-term income levels. Nearly all of the pan of technological investment centred on those who were unable to find new employment having been made redundant.
The paper reinforces the notion that it is vital to provide support to help people re-enter the workforce as soon as possible, whether through retraining or other interventions. What’s more, this support is especially important for people who have been in their job for a long period of time, as they struggle to move on as easily as the recently hired. Sadly, as I’ve written before, this group are often those who don’t get such support at the moment, and haven’t done during previous periods of economic turmoil.
The last few years have given clear enough warnings about the peril of leaving this group behind as technology drives the economy forward. It really is about time government, and society more broadly, start taking notice.
