In contemporary economic parlance, there is a multitude of ways in which unemployment as a concept is described and defined, given your school of thought. Contemporarily, it’s the cardinal business, up for discussion and debating at the global high tables of diplomacy and policy making and it’s gotten everyone’s attention as well given the scope of cascading ramifications. Continuing from the first part of the two-essays series, herein we take a look at the larger emerging trends in the employment outlook across the globe and societal and political ramifications of the same.
When India’s longest bridge was inaugurated in Assam earlier this week, the fact that went unreported was that the opening of the bridge meant loss of livelihood for more than 2,000 boatmen and their families on account of their services not being needed anymore. In no way do I intend to discount the vitality of the infrastructure addition, but my emphasis here is on the fact that the jobs temporarily created by say the construction of the bridge, in a sense had been at the expense of the sudden loss of means of sustenance for more than 2,000 poor households, a fact which remains no matter how you look at it. That’s not where it stops. An entire industry of boat manufacturing, repair and servicing had spawn in the region over time given demand. All had to shut shop in a flash, resulting in loss of means of employment for thousands more. This is just one such example.
Today, there are innumerable threats to the most prevalent conventional, low-skill requiring, sustainable employment avenues of all hues. 3D printing, manufacturing efficacies, increased automation, self-driving vehicles, mechanization of farms and so on. We mustn’t undermine the fact that the disruption cause by the emergence of newer, profound technological advancements affects fields which have traditionally employed a majority of Indians, especially the emerging low-skilled ones; be it in agriculture (which employs half of our workforce), or chauffeurs or even factory wage workers in the field of manufacturing and allied industries. Just to cite one example, Amazon today employs more than 45,000 robots (that number is almost doubling every year) in its fulfillment centers across the US, at the expense of an estimated 90,000 human laborers who’d have been required for the same job otherwise.
Interestingly, there are counter theories offered to job losses arising out of automation. For example, during the Industrial Revolution more and more tasks in the weaving process were automated, prompting workers to focus on the things machines could not do, such as operating a machine, and then tending multiple machines to keep them running smoothly. This caused output to grow explosively. During the 19th century, in the US, the amount of coarse cloth a single weaver could produce per hour increased by a factor of 50, and simultaneously the labor required per yard of cloth fell by 98%. This made cloth cheaper and increased its market demand, which in turn created more jobs for weavers. Cascading, their numbers quadrupled between 1830 and 1900. Technology, in this case, gradually changed the nature of the weavers’ job, and the skills required to do it, rather than replacing it altogether.
Though the example cited and the rationale behind it seems rather convincing, one must keep in kind that the machinery interventions of today are a lot more wholesome. These are replacing human intervention in the fields of usage and not merely complimenting it. Their nature and scope of application and effect is wholly different and hence merits scrutiny as such.
Automation and overt mechanization indeed is the new normal in sectors like engineering, manufacturing, automobiles, IT and banking. As their adoption increases, all high transaction and labor-intensive jobs will take a hit. It is the new norm across sectors and will affect the bottom of the pyramid so much so that four out of every ten jobs globally would be lost due to this by 2021. The effects will be secularly disastrous for most stakeholders, especially emerging economies like India with a young and lowly skilled labor force. More focus has to be given on long-drawn needs such as converting more than half of India’s labor force, which is informal and unaccounted into an increasingly formal one. At a separate level, reskilling of the existing workers who are at the perils of such industry trends is the key so they can be absorbed by the new jobs being created as offsets of automation which have needs for different, more advanced skill-sets altogether.
The larger structural shifts in the labor markets and subdued hiring prospects across the globe have serious social and political ramifications. Politicians and their politics are increasingly geared towards a convenient advocacy of protectionism and populism. Supra-national transfer of services and capital continues but that of human resources is under severe scrutiny. Prolonged unemployment can have disastrous consequences for a human society. Idling, unproductivity of its human resources, lower spending capabilities, increased crime rates, loss of faith in administration and lowering of incentive for societal stability, recession, insecurity, lower standards of living and so on. Given its scope of implications, it’s far too important that unemployment is tackled sustainably and on a war footing for global stability and growth at large. A job at hand, indeed.