Technology, Jobs and the Future of Work

The workplace is uncertain, causing significant anxiety—and rightfully so. There is an increasing polarization of labour market options between high- and low-skill jobs, unemployment and underemployment, particularly among young people, stagnant salaries for a vast population segment, and income inequality. In many developed economies, migration and its consequences on jobs have become a contentious political topic. The advancement of automation facilitates by technology such as robotics and artificial intelligence, which promises increased productivity (and economic growth), efficiency, safety, and convenience. However, these innovations pose questions about the more significant impact of automation on jobs, skills, pay, and the nature of labour.

At the same time, job-matching sites like LinkedIn and Monster are changing rapidly. Also, increasing the way people hunt for work and recruit talent. Independent workers rapidly use digital platforms such as Upwork, Uber, and Etsy. Such platform provides their skills, disrupting traditional beliefs about how and where labour in the process.

Employment, earnings and skills changes

Labour market challenges are mounting, household earnings in advanced nations are stagnant, and worker skill inequalities widen. Labour markets strained, and skilled workers are underutilized.

Unemployment and underemployment are at record levels throughout the world. There are 285 million adults in the United States and the 15 core European Union countries (EU-15) unemployed, with at least 100 million of them wishing to work more. In a survey, about 20 -45% of human resources are unused globally. It can be due to unemployment, inactivity or under-employment.In the United States, the United Kingdom, Germany, Japan, Brazil, China, and India alone, this translates to around 850 million individuals.

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Officially, about 75 million young people are jobless. Women are one of the most underutilized labour pools globally, with 655 million fewer women than males working. In a developed region scenario, all the countries have a high rate of improvement in terms of gender gaps (in labour force participation, hours worked, and employment sector mix) of the best-performing country in their region.

Household earnings in industrialized economies have remained flat or have decreased, fueling public dissatisfaction. Jobs provide money to the vast majority of individuals. Market incomes (from salaries and capital) stagnated or decreased for around two-thirds of households in the United States, Western Europe, and across advanced countries from 2005 to 2014, a period characterized by profound recession and gradual recovery following the 2008 financial crisis. It was the first time earnings have stalled on such a large scale since the 1970s stagflation crisis, and it may have fueled public opposition to globalization. The recession contributed to the abrupt end to income growth. Still, other longer-term variables also played a role, such as a decrease in national income paid to workers, known as the wage share. Despite increased productivity, it has declined in advanced economies, implying a decoupling between productivity and earnings.

The reduction can be attributed to higher corporate profits as a percentage of national income, rising capital returns on technological investments, reduced labour returns from increased trade, rising rent revenues from homeownership, and increased capital depreciation. During the slump, policymakers in the afflicted nations made steps to compensate for the income squeeze, such as lowering taxes and increasing transfers. But these were essentially one-time measures to boost disposable income in response to the crisis, and they were not sustainable.

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Globalization has delivered many benefits, including bringing millions of individuals in developing countries into the middle class. However, it has influenced some industries, such as manufacturing in industrialized economies, with some jobs, moved abroad. Better assistance is provided to affected workers to help them develop new skills and transfer into different industries or vocations.

The impact of technology on the workplace

Much of what we know about how people operate could be turned upside down by new technologies. However, given the promise of digital talent platforms and new alternatives for independent work, disruption is both an opportunity and a threat.

Since the Industrial Revolution two centuries ago, technological development has continually transformed the workplace. Still, the speed with which automation technologies are growing now, and the extent to which they could disrupt the world of work, are entirely unprecedented.

MGI’s research on the world economy’s automation potential investigated over 2,000 labour activities. It quantified the technological feasibility of automating them, focusing on 46 countries that account for nearly 80% of the global workforce. The percentage of computerised jobs using currently available technology is relatively small—less than 5%. Another significant result is that, even if entire occupations are not automated, partial automation (automating only a portion of the activities that make up an occupation) will affect almost all domains to some extent. Not only industrial workers and clerks will be affected. Workers from different backgrounds, such as dentists, fashion designers, salespeople, etc., will be impacted.

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Most vocations will change as a result, and more individuals will be required to work with technology. Those that work with technology and are highly skilled will benefit. While low-skilled individuals who use technology will produce more in terms of production and productivity, they may face pay pressure due to a potentially more significant supply of equally low-skilled people unless demand for the occupation develops faster than supply.