It seems almost every day we are presented with more evidence that automation is having profound consequences on the nature of work in America—in expected and unexpected ways.
In a report issued at the end of June by Oxford Economics, researchers estimated that up to 20 million manufacturing jobs could be replaced by robots—roughly 8.5% of the global manufacturing workforce. As detailed in the report, the use of robots worldwide has tripled over the last 20 years to 2.25 million machines—but the global stock of robots in industry has more than doubled since 2010, and roughly one-third of the robots now being installed are in China. While the impacts of these changes will be felt nationally, the report identifies specific regions that are likely to be hardest hit in the manufacturing sector.
More recently, an analysis of Bureau of Labor Statistics (BLS) data conducted by the non-partisan Pew Research Center indicated that the number of teens holding summer jobs continues to decline. As the study indicates, this summer roughly only one-third of teens will hold a paying job—down from an over 50% summer employment rate in 2000. While there are numerous reasons suggested for this decline, the lack of lower-skill entry-level jobs—some of which are precisely the jobs subject to being replaced by automation—is at least one factor.
Finally, in California, the state legislature is considering a bill that would potentially devastate the gig economy by reclassifying millions of independent contractors as employees under state law (and thus bringing them within the scope of the state’s burdensome wage and hour laws). It is not surprising that a number of ride-share companies are concerned with the potential impact of this legislation on their industry model. What is surprising was the response of California Governor Gavin Newsom, who, in declining to take a position on the pending bill, was quoted as observing that “the vast majority of [the ride share] business model is going to be automated” in 10 years such that extending employee status to drivers is merely “an interim conversation.”
As the Oxford report notes, the rise in the use of automation and artificial intelligence will boost productivity, increase economic growth overall, and create new jobs in new industries in the long term. That said, millions will face job loss in the near term. We have identified this phenomenon as the coming TIDE™—the Technologically-Induced Displacement of Employment. As detailed in our recent white paper, our workforce must prepare itself for TIDE or risk being overwhelmed by it.