Automation risk lies in quality of work

An estimated 60,000 jobs in Northern Ireland are in danger of being automated into obsolescence, with a further 460,000 jobs set to face extensive changes according to a recent report. However, it is predicted that employment numbers will not fall, with the quality of the jobs replacing those lost said to be the real issue.

The Nevin Economic Research Institute (NERI) report predicts that while automation will impact at least 60,000 jobs, “an equal or greater number of jobs will likely be created in the aftermath” and that the true way to analyse automation’s inevitable effect will be to “evaluate not just the jobs lost, but also those that are subsequently created”.

As the report introduction points out: “Just because a worker who has lost their job due to automation technologies finds another job to replace the one lost, does not mean that advances in technology are not having an impact.” It is stressed that the quality of the new jobs gained by those whose old jobs are automated will be the measuring stick of automation’s impact on Northern Ireland.

The danger, the report argues, lies in the “polarisation” of the labour market, where “middle-skilled” job numbers are decreased and the market drifts further towards a binary split of highly-skilled and lowly-skilled employment. The report found that in the period 2001-2018, middle-skilled jobs’ share of the market fell by 6 per cent and warned that the more routine-based nature (i.e. tasks that are easier to programme into a computer) of middle-skilled jobs makes them prime for automation: “While traditionally most new jobs were middle-skill jobs, this is no longer the case. New jobs are predominantly in high- and low-skilled occupations and middle-skilled occupations are being crowded out. This means that workers are more likely to find new employment in opposite sides of an increasingly polarised labour market.

“Because non-routine tasks tend to be dominant in higher-skill and lower-skill occupations and routine tasks tend to be dominant in middle-skill occupations, it appears that the theoretical proposition of the routine-biased technological change model can more accurately describe the impact which advances in technology are having in terms of the skills distribution of the labour force.”

Pointing to vast increases in employment numbers across certain sectors between 2001 and 2018 (including 92 per cent in the number of workers employed in professional occupations, 22 per cent in associate professional and technical occupations, 66 per cent in sales and customer service occupations, and 40 per cent in caring, leisure and other services), the report finds that “technological advances appear to be having a labour-saving effect in occupations whose tasks are predominantly routine and non-routine manual in nature”, while there has been “sharp increases in the number of jobs whose tasks are predominantly either non-routine abstract or non-routine service-orientated in nature”.

The sectors said to be at risk include administrative and secretarial, as well as process, plant and machine operative occupations, which are classified as requiring routine tasks of both abstract and manual natures.

The report stresses that this gives rise to twin needs: to “question whether the overall quality of jobs is staying the same, increasing or decreasing overtime as some occupations are hollowed out and jobs are replaced in other occupations” and to “give consideration to the likelihood that as the occupational structure becomes increasingly polarised, that the quality of jobs also becomes polarised into ‘good’ and ‘bad’ jobs”.

Given that non-standard forms of employment tend to be less secure in nature; offer less opportunities for progression; fewer opportunities for training; possess higher occupational health and safety risks; and lead to lower job satisfaction, there is reason for concern.

It is also said that increased automation could have an effect on the employment arrangements and working hours of jobs it does not directly take. It is reported that those in routine and non-routine abstract jobs such as professional, associate professional and technical occupations are the most likely to be in be in standard employment (full-time and with set hours) and those in non-routine service jobs are the most likely to work in non-standard employment (all other forms).

53 per cent of all of those employed in sales and customer service and 47 per cent of those in caring, leisure and other services are in non-standard employment arrangements. This compares to those in routine occupations whereby 24 per cent of those in elementary occupations and 36 per cent of those in process, plant and machine operative occupations are employed in non-standard arrangements

Economists and authors of the report, Paul Mac Flynn and Lisa Wilson contend that it is likely that we will see a decline in the traditional standard employment model, something they say is “in and of itself, not necessarily bad”. However, they concede that “given that non-standard forms of employment tend to be less secure in nature; offer less opportunities for progression; fewer opportunities for training; possess higher occupational health and safety risks; and lead to lower job satisfaction, there is reason for concern”.

They state that, given that non-standard forms of employment are more likely in some occupations than in others, the overall security of employment is now lower than it would have been had the labour market not become so polarised. This is likely to have a particularly negative impact on workers who are displaced from routine or non-routine manual occupations and who subsequently gain employment in non-routine service occupations as workers in these occupations have been found to be among the most likely to work short working hours and to say that they would like to work more hours.

The report also finds that those who work in non-routine abstract occupations tend to have relatively good earnings quality, whilst those in non-routine service occupations have comparatively poor earnings quality, regardless of which one of the hourly gross weekly pay or the gross annual pay metrics is used in the measurement.

In terms of quality of the working environment, the report finds that “those in non-routine service occupations including caring, leisure and other service occupations and sales and customer service occupations are among the least likely to report that they have autonomy, flexibility and satisfaction with their work, when compared to those in other occupations” and that “those in non-routine abstract jobs including managerial, director and senior official or professional jobs report very high levels of autonomy, flexibility and satisfaction with their job”. Employment trending towards non-routine abstract and service jobs means that work environment quality is improving, according to the report, but “it remains that large shares of those in non-routine service occupations are dissatisfied with their job and have little autonomy or flexibility over their work”.

The report concludes that we are in the “early stages of the technological advancement where it is not yet economical to actually replace the human labour involved in that task, but the threat of technological replacement is imminent”, but the price of technology falling while the cost of human labour (i.e. wages) is rising means that “the threat of automation can lower wages and conditions of employment”. It calls for any policy change in reaction to automation to focus on “the fact that, for a sizeable number of workers, automation may result in job loss or negative job change”.

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