POLITICIANS TAKE NOTE: JOB PROMISE NOT EASY

AUTOMATION AND ROBOTICS COULD MAKE LOW-SKILLED WORKERS JOBLESS, AND AFFECT POLITICAL FORTUNES OF THE RULING PARTIES IN THE COUNTRY AS IT HAS DONE ELSEWHERE.

While the extinction of jobs may happen slowly in India, the immediate threat would be slower job creation. In a country with the second largest population, fewer jobs would have several socio-economic and political implications. A faster pace of job creation was one of key promises made by Prime Minister Narendra Modi during the 2014 Lok Sabha election campaign. Job creation has been one of crucial electoral planks of most parties, as they seek to project themselves as development-focused entities.

Slower job creation could affect political fortunes of the ruling parties in the country as it has done elsewhere.

One of the reasons for the victory of Mr Donald Trump in the US Presidential elections was job losses caused by automation and robotics.

While Mr Trump focused on jobs shipped to China and India, he avoided speaking about job losses caused by modern technology.

While governments or political parties can do little to speed up job creation, ruling parties could change the job-seeking mindset of people and encourage them to move towards entrepreneurship, after providing them a social security net.

With automation and robotics affecting mostly low-end process-driven jobs, the most affected would be the less educated low-skilled labour, who are already economically vulnerable. It could lead to an unequal society, with the lowest strata earning dismally low incomes and the top rung getting obscenely high salaries or larger share of profits.

Wider use of robotics and automation would result in lower revenue for the government as workers, whom robots or automation replace, would have paid income-tax, consumption tax and added to the size of the domestic market by their purchases.

The immediate solution to this problem, according to Microsoft co-founder and world’s richest person Bill Gates, is robots tax.

He proposes that governments should tax companies that use robots to at least temporarily slow the spread of automation and to fund other types of employment. “A robot tax could finance jobs taking care of elderly or working with kids in schools,” Mr Gates has said. This proposal, while it sounds good for high population countries like India, won’t please business owners and developed countries with low population growth.