JOBS NEVER RETURN – THEY CHANGE

Will the horse and the buggy ever return to our roads? Riding on a tanga was a great fun in childhood, but they all faded away with our childhood. The manual rickshaw is getting replaced by the E-rickshaw and the three wheelers. Now if the tanga-walas and the rickshaw-walas complain that automation is killing us and starving our children to death, is it a fair criticism? When the world was changing, those who were intelligent enough saw it as an opportunity to progress in life and took to the change as fish takes to water, but those who chose to stay as complaining bystanders then are marginalized and poor today! Who is at fault for their plight? Surely not development! And those obsolete jobs are never going to come back. People have to modify their skills to learn to do new things that are in demand in the job market or they have to learn a whole new set of skills.

So when the Left and Left of Centre Thinkdom (LLCT) laments that the government of the day is not creating new jobs and across seven seas Donald Trump and Bernie Sanders sing the same tune and shout from every available rooftop that they will bring back the jobs to America, they are missing the big picture. Those jobs are never going to come back………..simply because they are of no use.   

In economics, productivity—the amount of economic value created for a given unit of input, such as an hour of labor—is a crucial indicator of growth and wealth creation. When productivity and employment are plotted on a graph the two lines historically closely tracked each other, with increases in jobs corresponding to increases in productivity. The pattern was clear: as businesses generated more value from their workers, the country as a whole became richer, which fueled more economic activity and created even more jobs. Then, beginning in 2000, the lines diverged; productivity continued to rise robustly, but employment suddenly wilted. By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation. Brynjolfsson and McAfee of the U.S. call it the “great decoupling.” And Brynjolfsson says he is confident that technology is behind both the healthy growth in productivity and the weak growth in jobs.

So has rapid technological change been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the world today? If the answer to this is yes  then what do we do? Do we stop technological advances for the sake of retaining jobs? Surely not. We need to learn newer skills, which will be in demand in the new world.

People are falling behind because technology is advancing so fast that our skills and our organizations aren’t keeping up. While in India we do not find robots replacing factory workers regularly, but changes are happening all around us. A less dramatic change, but one with a potentially far larger impact on employment, is taking place in clerical work and professional services. Technologies like the Web, artificial intelligence, big data, and improved analytics—all made possible by the ever increasing availability of cheap computing power and storage capacity—are automating many routine tasks. Countless traditional white-collar jobs, such as many in the post office and in customer service, have disappeared.

Globalization – the process by which ideas, people, money, goods and services cross borders at unprecedented speed, has fired the second salvo. It has allowed industries in the developed world to shift their manufacturing units to the developing countries where labour is comparatively cheaper. This has resulted in drying out of the blue collared factory jobs of the ‘drone class’ in the industrialized west and given a shot in the arm of developing economies whose workers today enjoy a better standard of living. But what is palpably missing is any attempt by the so called developed world to re-train their now idle work force to learn newer and useful skills. Environment is the biggest challenge to the very existence of our being today, and the industrialized nations have the largest carbon footprints. When automobile, textile and pharmaceautical factories were shutting down and the economy was staring down the crater of yet another depression then instead of exploiting this environmental challenge and becoming world leaders in Sun and Wind and Water energy by high quality research, Mr. Trump’s and Mr. Sander’s predecessors chose to sell bogus home loans to the those who would never be able to repay and allow fat bonuses for the corrupt bank honchos. What did the U.P.A do in India? They sold national assets – coal, land, spectrum etc for peanuts and pocketed huge kickbacks!

The fact is that unimaginative governments are hollowing out the middle class. Computers have increasingly taken over such tasks as bookkeeping, clerical work, and repetitive production jobs in manufacturing—all of which typically provided middle-class pay. At the same time, higher-paying jobs requiring creativity and problem-solving skills, often aided by computers, have proliferated. So have low-skill jobs: demand has increased for restaurant workers, janitors, home health aides, and others doing service work that is nearly impossible to automate. Even if today’s digital technologies are holding down job creation, history suggests that it is most likely a temporary, albeit painful, shock; as workers adjust their skills. Good and responsive governments are expected to aid, assist and nurture this process and also help entrepreneurs create opportunities based on the new technologies. Only then will the number of jobs rebound.

The silver lining is that higher productivity will eventually deliver cheaper goods and higher disposable incomes, as it did during the Industrial Revolution. Automation will allow for new technologies to develop and allow workers to utilise their inborn human skills, their computing skills and their newly acquired job skills to advantages in ways that are currently unimaginable. Just as we could not imagine what jobs would emerge when the cars replaced the horses, or when computers replaced office workers, so too are we blind to the jobs that will come into existence thanks to 3D printing or artificial intelligence. The global warming will have to be met with a host of all new skills and all these are jobs in the making.

If we remove our bias-tinted glasses and try to see the facts technology has actually been a great job creating machine. Your lone neighbourhood barber shop employing two has been replaced by a hair styling salon, with perhaps a spa and a sauna employing eight people in two shifts!  Hard, dangerous and dull jobs are on decline like in agriculture but and manufacturing but they are being more than offset by rapid growth in the caring, creative, technology and business services sectors. But then again…..these skills have to be learnt.  Weavers, knitters, typists, secretaries have fewer options today but teachers, domestic helpers, welfare, housing, youth and community workers – electricians, plumbers, furnishers are all in high demand!

Our educational system is not adequately preparing us for work of the future, and our political and economic institutions were, till recently, poorly equipped to handle these hard choices. This needs urgent attention. Driven by revolutions in education and in technology, the very nature of work will have changed radically—but only in economies that have chosen to invest in education, technology, and related infrastructure. Hence the success of ‘Skill India’ is non negotiable.

We need a holistic action plan that covers every base — one that includes a skilling and re-skilling programme to increase employability and productivity, incentives for smaller enterprises that absorb a greater number of workers, and the embedding of job generation in the massive infrastructure upgrade that India requires. Jobs must be the pivot for social and economic policy and key to the promised ‘Acche Din’!