Ro­bots could hit wages, warns Bank econ­o­mist

The Daily Telegraph - Business - - Business - By He­len Chan­dler-Wilde

IN­CREASED au­to­ma­tion could lead to weaker wage growth and a smaller share of na­tional in­come go­ing to work­ers, the Bank of Eng­land’s chief econ­o­mist has warned.

Andy Hal­dane, who sits on the Mone­tary Pol­icy Com­mit­tee, said the UK had been rel­a­tively slow to adopt au­to­ma­tion. “Were the UK to catch up, this could have sig­nif­i­cant im­pli­ca­tions for wage growth,” he said.

Mr Hal­dane es­ti­mated in­creased use of ro­bots could knock up to one per­cent­age point off rises in pay.

“In­creased au­to­ma­tion and the dawn of a Fourth In­dus­trial Rev­o­lu­tion could, then, re­sult in slower pay growth and work­ers re­ceiv­ing a smaller slice of the in­come pie.”

Mr Hal­dane pointed to re­search from the In­ter­na­tional Mone­tary Fund which had “found a sig­nif­i­cant neg­a­tive ef­fect of au­to­ma­tion on labour’s share”. Speak­ing at a con­fer­ence run by dis­pute-res­o­lu­tion body ACAS yes­ter­day, Mr Hal­dane noted sur­veys had found the UK has 71 ro­bots per 10,000 em­ploy­ees, far fewer than 127 in France or 170 in the US. The UK com­pares even worse to Ger­many, where there are 301 ro­bots per 10,000.

“This might help ex­plain why the UK’s labour share has fallen less markedly than in these other coun­tries,” he said. “If the UK had the same de­gree of in­dus­trial ro­bot pen­e­tra­tion as the US spread over a decade, this would lower wage growth by around 0.4 per­cent­age points per year.

“If the UK in a decade was to reach lev­els of ro­bot use in, say, Ger­many, then this could lower wage growth by around a per­cent­age point each year.”

Mr Hal­dane’s com­ments echoed those made by fel­low Bank econ­o­mist Will Abel at a con­fer­ence ear­lier this week. “One rea­son why we might not have seen this de­cline in the labour share is that we’re pretty rub­bish on au­to­ma­tion,” said Mr Abel.

Mr Hal­dane added that slug­gish pro­duc­tiv­ity im­prove­ments, the de­cline of unions and peo­ple work­ing part-time or on zero-hours con­tracts were also con­tribut­ing to weak pay growth in the UK.

Andy Hal­dane, the Bank of Eng­land’s chief econ­o­mist, said in­creased au­to­ma­tion in Bri­tain could hit wage growth

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