In recent years there has been an unprecedented increase in technological disruption. At the same time, a Gallup poll revealed a global increase in unhappiness. Gallup's latest Positive Experiences Index showed a decline in happiness
By Siddhartha Bandyopadhyay, Professor of Economics, University of Birmingham
The recent news that BT will reduce its workforce by around 55,000 by 2030, including around 10,000 jobs replaced by artificial intelligence (AI), is part of a growing trend of job losses around the world due to various forms of automation.
Evidence of this is provided by a number of industry reports, including a report by the McKinsey Global Institute (MGI) which acknowledges that approximately 800 million jobs may be lost worldwide due to changes in technology by 2030.
In our book “Work 3.0″, author and business consultant Avik Chanda and Enochi argue that due to automation, as well as newer ways of working, workplaces can become “anti-human” and will instead focus on artificial intelligence and technology.
While the term "anti-human" can be interpreted in different ways, workplace happiness surveys provide compelling evidence of just how unhappy workers are. For example, The Global Workplace 2022 published by Gallup states that in general, workers appear to be significantly worse off in their overall well-being than in 2020. In fact, only 20% of respondents reported that they were involved in and benefited from the changes.
In recent years there has been an unprecedented increase in technological disruption. At the same time, a Gallup poll revealed a global increase in unhappiness. Gallup's latest Positive Experiences Index showed a decline in happiness, even from 2020 levels. "Enjoyment," "smile" and "feeling well rested" have all but disappeared. On the other hand, the negative experience index of the survey continues to register an increase, with "sadness", "stress" and "worry" reaching record levels.
AI will increasingly be used as an assessment and decision-making tool in the workplace, which could be a positive development if it eliminates human error. But, as eloquently analyzed in Cathy O'Neill's book Weapons of Math Destruction, most decision-making algorithms use data that contains biases against historically disadvantaged groups. If these biases are incorporated into algorithms that help determine who gets bank loans or that filter job applications, they can perpetuate an already unjust situation.
However, this is actually the case because more jobs are being created than being destroyed due to automation. The magnitude of the net effect is disputed, but theories suggest that roles complemented by automation will succeed, at least in terms of better pay. However, polls like Gallup's indicate that stress and unhappiness in the workplace will affect nearly all workers.
Perhaps unsurprisingly, those workers who perform tasks capable of being fully automated will lose the most. This latter category of workers includes many blue-collar jobs, although a number of white-collar middle management jobs will also disappear.
A recent study by economists Daron Acemoğlu, Hans Koster and Ceren Ozgen, using data from the Netherlands, supports the conclusions of the theoretical study and reveals that automation affects different groups of workers in different ways. The team claims that "directly affected workers appear to lose from the adoption of robotics, while indirectly affected workers benefit (from it)".
When workplaces become anti-human, they focus on automated processes and the use of technological solutions rather than around employee well-being. This suggests that those with skills suited to this new workplace will thrive, while the future may be bleak for others, whose wages may freeze or decline.
This warning echoes what Brinjolfsson and McAfee predicted in their book The Second Machine Age:
“There's never been a better time to be a skilled worker or the right education, because these people can use technology to create and generate value. However, there has never been a worse time to be an employee who can offer only 'normal' skills and abilities, as computers, robots and other digital technologies acquire these skills and abilities at an extraordinary rate."
This separation of workers into two categories can spread around the world very quickly. As a result, inequality may be more pronounced within countries than between countries. In our workbook 3.0 we noted that inequality between countries accounted for only 32% of total global inequality in 2020, while inequality within economies accounted for a staggering 68%. In 1980, the situation was very different, when inequality between countries was up to 57% of the world total.
decrease in salary
While this trend leads to grim conclusions, governments can have an important impact. In India, which has seen a large increase in inequality in recent decades, policies such as the 2005 National Rural Employment Guarantee Act (MGNREGA) have helped narrow the gap. MNGREGA offers guaranteed employment as well as food subsidy as part of the effort to increase livelihoods in rural areas.
Economists Surjit Bhalla, Karan Bahsin and Arvind Virmani analyzed extreme poverty (defined as an income of $1.9 per person per day, based on 2011 dollar purchasing power) in India and found that it fell to fairly low levels in 2019 and remains low despite the pandemic. This is due to the effect of the food subsidy.
However, other studies have also found a decrease in poverty - although they differ in the extent of the decrease. This suggests that states can manage the worst effects on workers through active government intervention.
But subsidies are a short-term fix to protect workers who are most at risk of losing their jobs or experiencing a drop in wages. Long-term solutions should focus on training workers in new skills to adapt to the changing nature of demand. Educational institutions, from schools to universities, should play a leading role in this regard.
The skills needed in the workplace are changing at a dizzying pace. We claim in Workbook 3.0 that the challenge today for educational institutions is to instill in the employees of the future a highly adaptable mindset.
This thinking will aid in an educational curriculum that is more multidisciplinary and increases traditional STEM skills. This will be a significant step for many educational institutions, as it will force them out of their comfort zone.
However, the effort will pay off by creating an adapted and diverse workforce capable of meeting the changing demands of the 21st century workplace.