The modern world runs on jobs and labour. It’s how the human race decides how to allocate scarce resources to a specific person or household. Almost without exception, every person that doesn’t depend on someone to provide their needs works to earn money, and then uses that money to purchase resources for survival. But human-made technology is slowly taking jobs away from us. Today, I aim to explain some things about this, including how firms decide between investing in technology or labour, why technology is replacing humans, and what the future of work looks like.
The citizens of the early 19th century primarily used manual labour, with the richest of the public being blacksmiths and carpenters. The late 19th century birthed the industrial revolution, with steam engines, basic electricity and automation, that still, overall, involved humans and manual labour. It is only in the present that technology has developed to the point that work done by machines does not need human supervision at all. Technology has therefore become a very valuable asset. So how do firms decide which to employ?
A firm may choose to employ labour for the following reasons:
The country has a large supply of labour, causing labour to be cheap to employ
The firm is a small firm, therefore not having enough resources to employ capital
The product requires unique creativity or personalisation and the consumers expect this.
Unlike a machine that simply does one thing repeatedly, a worker can be flexible, having and utilising more of their skills for their job.
While many owners may not positively take feedback and therefore prefer machines that don’t complain, worker feedback can be valuable.
A firm may choose to employ capital for the following reasons:
As technology advances, the price of simpler and productive technology becomes more affordable.
A machine can work 24/7 without any days off, therefore being a valuable investment as it produces more with a lower maintenance cost.
Unlike humans, technology has been programmed to not make errors, therefore increasing useful output by a great deal.
Technology removes the need to handle human emotions and wants, such as career growth, salary increases, working conditions/hours, etc.
The biggest reason for firms to switch their employees from labour to capital is that capital is more efficient while not complaining about it. But the machine is only more efficient in jobs that do not require creativity, lateral thinking, a combination of different skills or adapting to a different situation. For example, self checkout in stores and self check in at airports are rapidly becoming popular processes for consumers. Since checkout/in are repetitive processes, a simple algorithm that can loop an infinite number of times can be designed for a machine, therefore making it easy for technology to take over. These machines are also more efficient as their customers cannot argue about prices with them, they cannot disrespect them nor can the machines argue with employers about working conditions. Since 2017, over 200,000 jobs have been lost in retail to machines in the US alone.
But when thinking about jobs that cannot be done by an algorithm and needs human skill, technology can never take over. For example, the careers of songwriters, researchers in science, politicians, economists, actors and others are highly secure because they require lateral thinking or human skill. Each worker in these industries thinks differently than the rest and therefore cannot be replicated by an algorithm. Jobs like drivers, cashiers, manufacturing workers, ticket vendors, travel booking agents and others are not secure since their monotony makes it highly possible for technology to take over.
This situation has both pros and cons. The pros are that we are achieving a world where technology can take over simple things that humans do not need to put their mind to, instead we can put our minds into developing new ways of living using the unique skills that each of us have that machines do not. The loss of jobs that don’t often require experience or training will motivate more people to educate themselves in order to have a job and specialise in the field of their choice. With every country making an effort to educate all their citizens, the world will have an increased number of specialised professionals. The cons are, of course, people losing their jobs. But technology isn’t advancing at a level that the civilisation simply cannot cope with, so kids, go study!
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