Every year the amount of technological hardware one can buy for one US dollar doubles. This is the trend our society has followed for the past two decades and it is called Moore's Law. It is this phenomena that will bring our society into a second industrial revolution. In this article, I shall look at the interaction of this exponential growth in technology and analyse its effect on the labour market.
The effect of the rapid improvement of technology on the labour market is polarisation both in skill sets and in income.
Machines are improving and are indeed replacing tasks once done by humans, however, not in the way they were ten years ago. Advanced capital now has the capability to replace not only low skilled manufacturing, but also high skilled. Intricate software could soon outdo well-educated analysts and secretarial personnel. This is due to the way capital is changing: machines can now not only do, but also think. Careers such as economists, who are undoubtedly skilled labourers are rivalled by software which can analyse huge amounts of data in a much faster time. Organisational jobs such as secretaries and logistic officers may well have the tasks in their jobs automated: timetables, diaries and scheduling can be substituted by a morphing software, which can now take into account thousands of different variables to accurately complete such tasks.
It is clear that members of the labour market who once had well paid, middle class jobs, which required high amount of skills are now changing to lower skilled industries as they are being replaced. The labour market is now being divided into two very well defined groups. At one end there will be a small amount of irreplaceable labour, for example, management and leadership based careers and at the other end there will be mass unskilled labour. This huge divide in the labour market will see the eradication of the middle class from society. As we can see, one is either doing a low income or a high income job, a high skilled or a low skilled job, and has had their job hugely transformed by technology’s rapid success.
However, as a student it is daunting to think that such a drastic change is happening to the labour market - a labour market I am about to enter. Having read ‘The Second Machine Age’ by Eric Brynjolfsson and Andrew McAfee, it seems that the skill set one should desire to attain through education is one that is complemented by technology and not replaced by it. For example, a degree in engineering or computer science would serve one well in a technological boom. Many individuals whose skill sets have already been developed will be looking to institutions as they must look to manage a labour force that will be susceptible to the great bounty of technology.
It is almost certain that technology will present problems to those tackling inequality, however, this change can be minimised by two things. One is intervention from a governing institution through wealth distribution and changes in education. Another is through the growth of labour intensive industries; growth inspired by technological change. The industries and jobs that I am attempting to depict here are unknown to all of us at this current moment in time, in the same way some of the jobs at Microsoft would have been unimaginable only decades ago.
The future of the labour market is a challenging one for society but it is institutions, not technology that will decide the final outcome.