Retraining workers needs to be a priority
Machines will soon do most of the world’s work.
Companies are automating their processes and eliminating jobs at a staggering pace, according to a new Future of Jobs Report from the World Economic Forum. Half of the top executives surveyed said they expect to employ fewer humans and more machines in 2022.
The survey confirms that absent retraining, millions of people will find themselves unemployable. For those with the right skills, however, opportunities will abound.
Last year, the McKinsey consulting firm predicted that automation could eliminate 800 million human jobs by 2030. That estimate may have been too conservative. The forum’s study found that the 300 global companies surveyed plan to eliminate 75 million jobs by 2022 alone.
To understand why, consider that this year humans will do 71 percent of the world’s work when measured in hours. By 2025, machines will perform 52 percent.
“As technological breakthroughs rapidly shift the frontier between the work tasks performed by humans and those performed by machines and algorithms, global labor markets are undergoing major transformations,” the researchers concluded. “These transformations, if managed wisely, could lead to a new age of good work, good jobs and improved quality of life for all, but if managed poorly, pose the risk of widening skills gaps, greater inequality and broader polarization.”
Technology, by definition, eliminates the jobs of the past. The internal combustion engines made farming easier. Assembly lines allowed for mass production, and computers took away jobs by simplifying calculations and communications.
The widespread employment of supercomputers to analyze massive datasets will allow machines to perform more jobs
The question is how societies will cope with the laid-off workers and the greater demand for highly trained people.
than ever. The most at-risk jobs are data entry clerks, bookkeepers, administrative assistants, factory workers and customer service workers, according to the survey.
Technology also creates the jobs of the future. Those with the brightest prospects include data scientists, artificial intelligence experts, operations managers, software developers and marketing professionals. This fits perfectly with a study last year by technology services firm Cognizant that tied future prosperity to digital skills.
Not all of these jobs will require people to write code, though. Factories will still need people to install, troubleshoot and repair robots. Transportation companies will need people with hand-eye coordination to remotely drive autonomous vehicles when required.
There will be plenty of jobs for kids who enjoy fiddling with Erector Sets and playing video games. But they will need specialized education. Researchers calculate that the average worker will need 101 more hours of learning to perform the jobs of 2022.
Using machines in place of humans will also radically change where companies do business. About half of the executives said they would likely move their operations or value chains by 2022. Instead of looking for the cheapest labor, 74 percent said their top priority now is access to highly trained workforces.
Nothing will stop these trends because companies are compelled to seek the most costeffective means of production to maximize profit. The question is how societies will cope with the laid-off workers and the greater demand for highly trained people.
Already we see most of the new jobs and economic growth in the U.S. concentrated in only a few parts of the country, according to the Economic Innovation Group’s latest survey of Census data. These tend to be metropolitan areas with educated workforces, research universities and strong technology sectors. Places that prioritize education.
Texas ranked near the middle in 2017, with 29 percent of the population living in prosperous zip codes and 23 percent living in distressed areas, which researchers defined as communities where businesses are closing, and unemployment is rising. Mississippi ranked the worst with 43 percent of residents living in distressed zip codes, while Utah had 47 percent residing in prosperous areas.
The key to economic growth, therefore, is more education. We need to raise the bar on public education and make sure colleges and universities prepare people for the workforce. But we must also devise ways to retrain those who lose their jobs to automation before retirement age, something this country historically does poorly.
Politicians will need to rethink tax codes that punish companies for hiring people and reward those that invest in automation. The government will need to eliminate both employment taxes and capital expenditure deductions if it wants to keep revenues flowing.
Employers must also take responsibility for training workers. Companies destroy communities when they demand incentives that cut school taxes, refuse to retrain existing employees and shift jobs around the world seeking a better deal.
Failure to act will create greater income inequality, increase political instability and slow economic growth. We know the old jobs are going away. It’s time to prepare workers for what’s next.