Labour market

Robot wars: automation and the labour market

Adam Corlett
Adam Corlett

Should we be concerned that robots will ‘take all the jobs’? Certainly there is no shortage of exciting new technologies on the horizon and, although predictions of technological unemployment have never yet come to pass, it is worth assessing what we know about our labour market and automation.

Key findings

  • Looking backwards there has been a strong link between the ‘routineness’ of occupations and their decline.
  • The decline in routine jobs is also associated with the ‘hollowing out’ phenomenon, whereby those jobs that were in the middle of the pay distribution have fallen as a share of total employment. However, there has been little change is the distribution of pay thanks to a counteracting ‘filling in’ of the middle of the labour market. Jobs such as those in secretarial work, administration and manufacturing have been replaced by (or re-categorised as) new jobs in business, management, science, teaching and care.
  • Large sectoral declines in employment – as have been seen in many of the UK’s manufacturing industries over the past 20 years – are in part down to reduced inflows of young people, rather than just increased outflows to unemployment or inactivity.
  • Given high employment, terrible productivity performance and low investment, the UK arguably needs more automation, not less. And public policy may be adding to this need. The welcome National Living Wage is increasing labour costs at the bottom, while the – as yet unclear – nature of Britain’s exit from the EU may lead to reductions in low-skilled immigration. Looking at those sectors with the highest proportion of EU migrants, we find that some (such as cleaning and domestic staffing) face relatively low prospects for automation, while others (such as agriculture, food manufacturing and food and drink services) may see new pressures (or opportunities) to automate.

Further reading

Firm foundations
Understanding why employers use flexible contracts
·
Hannah Slaughter
Labour Market Outlook Q2 2024
Happy 25th birthday to the minimum wage
·
Nye Cominetti, Hannah Slaughter
A U-shaped legacy
Taking stock of trends in economic inactivity in 2024
·
Louise Murphy
Adam Corlett
Adam Corlett Principal Economist