UK’s poorest to fare worst in age of automation, thinktank warns
The rise of the machine economy risks social disruption by widening the gap between rich and poor in Britain, as automation threatens jobs generating £290bn in wages. Jobs accounting for a third of annual pay in the UK risk being automated, according to the study by the IPPR thinktank. Mathew Lawrence, a senior research fellow at the IPPR, said: “Managed badly, the benefits of automation could be narrowly concentrated, benefiting those who own capital and highly skilled workers. Inequality would spiral.” From the collective pay pool worth £290bn, middle-income jobs such as call-centre workers, secretaries and factory workers are likely to be hollowed out. Low-skilled workers could also lose their jobs or face fewer hours from greater levels of automation. At the same time the highest earners and workers able to retrain will gain higher pay thanks to rising productivity – which means more output being generated per hour worked. The research follows similar studies warning of the risks arising from the current rapid advances in technology, which have enabled machines to take on work that was once the preserve of humans. Ministers are also being urged to consider new models of company ownership in the face of increasing returns to asset owners, because rising automation could result in higher profits for those who own companies – at the expense of workers’ salaries. Forcing businesses above a certain size to share their profits with workers. “Government is working closely with industry to ensure the benefits of new technologies are felt across different sectors of the economy up and down the country, while creating new high-skill, well-paid jobs,” the BEIS said. Despite the ability of automation to lift people from menial work into higher-paid jobs, there are fears that advances appear to be resulting in faster, wider and deeper degrees of change than in the past. Advances in technology could help to improve productivity – a measure of the economic output per hour worked – after years of sluggish growth in efficiency levels since the financial crisis, which has held back both GDP growth and also higher wages across Britain. Although the rate of unemployment stands at its lowest level since the mid-1970s, earnings growth has been held back amid a proliferation of low-skilled and low-paid work created in recent years, while there has been a boom in the number of self-employed and those working in the gig economy. If automation is managed poorly, it could lead to greater concentration of wealth for those at the top and a wider gap with the poorest in society. The government has taken some steps to address the challenges ahead, including a partnership with the TUC and the CBI to develop a national training scheme for workers, as well as launching an industrial strategy to drive up productivity.
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