Each New Robot In Manufacturing Replaces 3.3 Jobs: TOP 5 Trends From The World Of Work

The Massachusetts Institute of Technology (MIT) has published new research titled Unpacking Skill Bias: Automation and New Tasks. Based on a series of studies, it argues that modern technology has affected different workers in different ways. While automation, AI, or robots have benefited many white-collar workers such as designers and engineers, many blue-collar workers have been impacted negatively and their jobs have been replaced. This was not always the case, however. Before the 1980s a lot of the new job opportunities that technology brought benefited low-skill workers but as Professor Daron Acemoglu argues “from the 1980s, and especially in the 1990s and 2000s, there’s a double whammy for low-skill workers: They’re hurt by displacement, and the new tasks that are coming, are coming slower and benefiting high-skill workers”. The research concludes that:

• Across the U.S. from 1993 to 2007, each new robot replaced 3.3 jobs;
• Manufacturing companies that are quick to automate can thrive but the overall employment drops;
• Where automation occurs, lower-skill workers are not just failing to make gains; they are actively pushed backward financially.

Speaking at a virtual conference hosted by Deutsche Bank, JPMorgan CEO Jamie Dimon said he believed the unemployment level in the US would remain in double digits but that by the end of the year it would fall to 10%. According to Dimon, there are signs that the economy is beginning to recover and that the rebound would be rather fast. He cited both the US government’s stimulus package and the strength of the American consumer as primary reasons why he feels upbeat about the country’s economic prospects for the second half of the year.

According to the International Labour Organization, COVID-19 has accelerated the future of work while nudged remote work towards becoming the new norm. That said, Susan Hayter, the ILO’s Senior Technical Adviser is cautious about claims that coronavirus will lead to an end of “The Office”. In high-income countries, only 27% of workers are able to work remotely while the office will continue to play a social role in people’s working lives regardless of the newly found flexibility. However, when it comes to the developing countries, the focus is on securing a decent income rather than remote work as 1.6 billion people working in the so-called informal economy saw their earnings drop by an average of 60% in the first month of the crisis. To that end, and in the face of a dramatic economic downturn as well as surging unemployment figures, Hayter calls on companies to embrace new job-sharing schemes that would allow for both flexibility and saving jobs. This might lead to shorter workweek or work-sharing arrangements to avoid furloughs in lean times, but it would bring more stability and security.

The European Commission proposed this week a €750 billion package of grants and loans to aid the EU’s recovery from COVID-19. The Commission’s president Ursula von der Leyen told the European Parliament that none of the challenges posed by the pandemic can be fixed by any single country alone and claimed that the programme could “kick-start our economy and ensure Europe bounces forward”. The €750bn recovery fund will be complemented by the €1.1 trillion EU budget for 2021-27 and the initial rescue package of €540bn which would bring the total amount to €2.4 trillion, said the Commission president.