Monday, January 20, 2014

US and Australian Employment Trends and the Future of Jobs?

Reading "The Future of Jobs" from The Economist I came across this graph showing the trends of sectoral employment since 1948.

The situation in Australia since the 1980s is this:

Agricultural, Manufacturing and Mining Employment
Percentage of Total Employment 1984-2013

Total service employment in Australia has increased as the decline in manufacturing and agricultural employment has gathered pace. (Remember that the graphs show percentage of the total rather than absolute employment levels.

The decline in manufacturing employment is not only due to technological change but the decline in its contribution to GDP and the growth of other forms of employment.  A successful and growing manufacturing sector in Australia might not necessarily employ a lot of people in the future because of increasing automation. The mining sector is also increasingly shifting to automation so there'll be fewer jobs in that sector as well.

The trend towards increased service sector employment is likely to continue, but perhaps we're heading towards a world where the wealthy and time poor pay more and more for services that mostly need to be performed by humans, creating opportunities for some and low wages for others.
So technological progress squeezes some incomes in the short term before making everyone richer in the long term, and can drive up the costs of some things even more than it eventually increases earnings. As innovation continues, automation may bring down costs in some of those stubborn areas as well, though those dominated by scarcity—such as houses in desirable places—are likely to resist the trend, as may those where the state keeps market forces at bay. But if innovation does make health care or higher education cheaper, it will probably be at the cost of more jobs, and give rise to yet more concentration of income.
Generally, however, I'm not a technological pessimist or a Luddite. That doesn't mean the transition towards new forms of employment will be smoothe or easy for large sections of the population.

The Economist makes a list of the jobs most vulnerable to computerisation:

Incidentally, The Economist argues that technological change eventually produces new employment after periods of often painful adjustment.
Even if the long-term outlook is rosy, with the potential for greater wealth and lots of new jobs, it does not mean that policymakers should simply sit on their hands in the mean time. Adaptation to past waves of progress rested on political and policy responses. The most obvious are the massive improvements in educational attainment brought on first by the institution of universal secondary education and then by the rise of university attendance. Policies aimed at similar gains would now seem to be in order ... 
Everyone should be able to benefit from productivity gains—in that, Keynes was united with his successors. His worry about technological unemployment was mainly a worry about a “temporary phase of maladjustment” as society and the economy adjusted to ever greater levels of productivity. So it could well prove. However, society may find itself sorely tested if, as seems possible, growth and innovation deliver handsome gains to the skilled, while the rest cling to dwindling employment opportunities at stagnant wages. 

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