Longer working lives could end retirement hopes, claims Carney
PEOPLE may not have the option of retiring because of longer working lives, the Bank of England governor has warned.
Rapid and seismic change is likely to lead in the interim to unemployment, dislocation and rising inequality, Mark Carney added.
Increasing automation of jobs represents a Fourth Industrial Revolution which threatens a tenth of UK posts and 15% in Ireland, Mr Carney told an audience at the Republic’s Central Bank in Dublin.
He said: “Unlike in the previous industrial revolutions, the more rapid pace of adjustment and longer working lives means workers may not have the option of retiring.
“This raises risks of substantial skills mismatch, leading to increased structural unemployment and adverse macroeconomic outcomes.”
He delivered his lecture after warning British Government ministers that house prices could crash by more than a third in
the event of a disorderly, no deal Brexit. His comments in the Republic focused on the challenge to traditional employment posed by technology and the use of artificial intelligence.
He said those without the skills to exploit the move towards roles geared to originality or emotional intelligence could be left unemployed.
Employers and societies will also have to deal with the decrease in the labour supply produced by an ageing population.
The governor raised the role of innovation in education to try to prevent a skills mismatch. He said: “The biggest issue may be how to institutionalise retraining in mid-career and to integrate it with the social welfare system.”
Mr Carney said in the long run the revolutionising of work practices would boost productivity and wages, while creating new jobs to maintain or even increase overall employment. “But that is in the long run.
“In the interim, if it is similar to previous industrial revolutions, it seems likely there will be a period of technological unemployment, dislocation and rising inequality.
“Given that it could happen more rapidly, the challenge of workforce adjustment could be more difficult. The shifts required in employment from jobs involving heads to those with hearts and hands could be far greater each year than seen in previous episodes.”
He said rates of pay growth in the UK were below pre-financial crisis averages of a decade ago, largely reflecting continued weakness in productivity growth, and said Brexit uncertainty has had a dampening effect.