OECD: Job Loss from Automation May Be Less Severe than Feared, but Still Painful

OECD: Job Loss from Automation May Be Less Severe than Feared, but Still Painful

A recent report from the Organization for Economic Cooperation and Development finds that the number of jobs at risk of displacement due to automation in the coming years is probably smaller than previous forecasts have estimated. Nonetheless, the tens of millions of workers in developed countries are still at risk of having their jobs replaced or radically altered by AI and robotics. The Verge’s James Vincent summarizes the report’s findings:

The researchers found that only 14 percent of jobs in OECD countries … are “highly automatable,” meaning their probability of automation is 70 percent or higher. This forecast … is still significant, equating to around 66 million job losses.

In America alone, for example, the report suggests that 13 million jobs will be destroyed because of automation. “As job losses are unlikely to be distributed equally across the country, this would amount to several times the disruption in local economies caused by the 1950s decline of the car industry in Detroit where changes in technology and increased automation, among other factors, caused massive job losses,” the researchers write.

The analysis from the OECD, an inter-governmental organization representing the world’s 35 richest countries, is considerably less disconcerting than previous studies that have calculated the risk of automation at anywhere from 30 percent to fully half of all the work currently being performed globally. One difference between this study and previous ones, Vincent explains, is that it pays greater attention to details like whether a job can be fully or only partly automated and the variations among jobs that may have the same title but whose work differs substantially:

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Ben & Jerry’s, McDonald’s Serve Up Transferable Education Opportunities

Ben & Jerry’s, McDonald’s Serve Up Transferable Education Opportunities

McDonald’s and Ben & Jerry’s may not have a lot in common in their corporate philosophies, but both companies have recently begun offering their low-skilled employees significant educational opportunities that will help them wherever their career paths may take them.

Eighty percent of employees at Ben & Jerry’s ice cream shops are in their first-ever job. The Vermont-based company is now offering them skills training through an online program called Core Academy, where employees can take one of four courses: Beyond the Job parts 1 and 2, Activism Academy, and Social Equity & Inclusion. These topics jibe with the company’s stated commitment to social responsibility.

“We started thinking about what are our responsibilities to this entry-level workforce,” Collette Hittinger, the ice cream company’s global operations and training manager, told SHRM’s Kathy Gurchiek earlier this month, “and we decided we had plenty of programs about how to run an ice cream store,” but nothing to develop skills that would enhance workplace and customer interactions, such as emotional intelligence. The training opportunity also prepares their workforce, 75 percent of which is aged 18-24, for leadership down the road.

Ben & Jerry’s developed the program in partnership with the local Champlain College and California-based Story of Stuff Project. The coursework draws from Champlain’s MBA programs for its content and project-based structure. Participation in Core Academy is voluntary, but the program has been very well-attended and received. It also allows Ben & Jerry’s to stand out in attracting workers for their minimum-wage service industry jobs.

McDonald’s is offering a more traditional education credential, as participants in its “Archways to Opportunity” program can earn a high school diploma through the fast food titan’s partnership with Cengage Learning. Since the 18-month program launched in 2015, roughly 100 employees have completed it and over 800 are currently enrolled. Amanda Eisenberg at Employee Benefit News has the details on the program, which is designed for adult learners:

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US Senators Unveil Plan for Points-Based Immigration System

US Senators Unveil Plan for Points-Based Immigration System

Republican Senators David Perdue of Georgia and Tom Cotton of Arkansas introduced a bill this week that would reform US immigration procedures to implement a skills-based point system that gives preference to prospective immigrants with skills needed in the American labor market, while reducing the number of immigrants admitted each year by as much as half. The legislation, an updated version of the Reforming American Immigration for a Strong Economy Act, or the RAISE Act, Perdue and Cotton first proposed in February, has secured the endorsement of President Donald Trump, the Washington Examiner reported on Wednesday:

The revised RAISE Act steals a page from Canada and Australia, whose immigration laws prioritize high-skilled workers for employment-based green cards. The number of skills-based visas would increase under the proposal though businesses could rely more on outsourcing jobs to cheaper employees in other countries.

Trump argued that accepting job-qualified immigrants will increase wages for U.S. and immigrant workers, but the change could prove challenging for corporations who benefited from a steady flow of low-skilled workers. Trump said the change would reduce the amount of government welfare being paid out because immigrants are increasingly working good-paying jobs. …

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Will ‘Brickie Visas’ or ‘Barista Visas’ Solve Brexit-Induced Labor Shortages?

Will ‘Brickie Visas’ or ‘Barista Visas’ Solve Brexit-Induced Labor Shortages?

The UK think-tank Migration Watch has issued a new report containing a set of policy recommendations regarding immigration from the EU after Brexit. A centerpiece of the report is a proposal for a new visa program, dubbed the “brickie visa” after bricklayers (one of several occupations expected to experience labor shortages after Brexit), which would allow EU nationals to live and work in the UK temporarily, as Annie Makoff explains at People Management:

Under the proposed temporary scheme, the visa would be issued for one year but could be extended for an additional year, up to a maximum of three years, to encourage businesses to train local staff for unfilled roles. The Migration Advisory Committee would decide which sectors and occupations would be eligible under the scheme, the think tank suggested.

Employers would need to provide evidence of “genuine attempts” to recruit UK nationals, and would be responsible for paying an annual levy, which would rise incrementally, to make it more financially viable for employers to recruit and train local workers. …

While Paul Payne, managing director of construction and rail recruiter One Way, said the ‘brickie visa’ was a “good idea in theory”, he warned that it would just provide a short-term solution to a “deeply rooted, long-term issue” caused by a “dearth of available talent” within the construction and engineering sector.

Home Secretary Amber Rudd has also floated the idea of “barista visas,” also backed by Migration Watch, which would enable young Europeans to come to the UK and work in the hospitality industry, which also expects a post-Brexit labor crunch, the Sun reported last month:

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What’s Eating US Manufacturing

What’s Eating US Manufacturing

Amid a shortage of qualified workers and a dwindling number of well-paid factory jobs, Timothy Aeppel at Reuters delves into how both employers and employees are struggling in the American manufacturing economy:

The problem boils down to a quality issue on both sides: Employers gripe about workers with little work ethic, while employees decry falling pay for the kind of jobs that once fed families. The logical response to a labor shortage is to raise pay enough to attract a quality staff, but many manufacturers say they can’t afford it in an era of rising global competition.

Bremen Casting in August raised its starting wage to $14 per hour from $13 – after raising it from 11.50 earlier this year. The company pays up to $27.50 for its top hourly workers. Brown said he’s nearing the limit of what he can pay because of pricing pressure from his customers. The upshot is that most factory jobs, in the view of many blue-collar Americans, have been redefined as lower-level work. The average wage on factory floors fell below the average for all U.S. workers in 2006 and now sits at $20.57 per hour.

Many make much less. A third of factory floor workers collect some form of public assistance, such as food stamps, according to a study this year by the University of California-Berkeley’s Center for Labor Research and Education. … Many employers are getting what they pay for, said Ken Jacobs, a coauthor of the study. “You can’t both complain about a skills shortage and offer compensation that’s too low to attract workers,” he said.

The sources of this dilemma are complex. In some ways, Aeppel writes, it’s a self-fulfilling prophesy: As manufacturing positions are no longer considered “good jobs,” the most dedicated workers are no longer interested in them. The other challenge for manufacturing workers, of course, is that much of the work they used to do is now being automated. The Associated Press takes a hard look at the impact robots have had on the job market in US manufacturing:

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Automation’s Labor-Market Downsides

Automation’s Labor-Market Downsides

Will the robot revolution destroy jobs or create them, and how can humans compete in an increasingly automated economy? That’s the question that should be on on the mind of anyone thinking about the future of work and the labor market. At the Atlantic, the Obama Administration’s Chief Economic Advisor, Jason Furman, explores how the economists advising the US president think this future will most likely play out:

AI stands to boost productivity growth, and in turn raise incomes and standards of living. For these reasons, AI should be celebrated, and one of the biggest questions should be how to get more of it. But this is not to say that AI will necessarily have only positive effects on labor markets. Recent work by the Council of Economic Advisers (CEA), shows that lower-paying jobs are at much greater risk than those that pay handsomely. Eighty-three percent of jobs making less than $20 per hour are projected to come under pressure from automation, as compared to 31 percent of jobs making between $20 and $40 per hour, and just 4 percent of jobs making above $40 per hour …

Of course, advanced economies have seen vast amounts of innovation in the last three centuries without rendering human labor obsolete. Most of the types of jobs that existed in the 1700s do not exist today, but new types of jobs that no one could have imagined then have taken their place—all because of technological advances. A different trajectory is unlikely to emerge this time around because even though AI has the potential to replace certain human tasks, it will likely also create entirely new fields of jobs.

So 83 percent of the jobs making less than $20 per hour will not simply disappear. But it does mean that during a transition period low-wage jobs could face substantial downward pressure on their wages to remain viable in the face of competition from technological substitutes. …

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UK Labor Market’s Brexit Beating May Be Yet to Come

UK Labor Market’s Brexit Beating May Be Yet to Come

After suffering a shock in the aftermath of June’s Brexit referendum, business confidence in the UK appears to have stabilized. A new report from ManpowerGroup suggests the same, but as Alexandra Gibbs observes at CNBC, there are signs of trouble down the road:

In the latest Manpower Employment Outlook Survey, out of the nine industry sectors surveyed, eight are expected to grow in staffing levels during 2016’s final quarter, highlighting that on the surface, the referendum outcome has “done little to dampen employers’ immediate hiring plans.” … Yet in its survey which looks at U.K. employer responses, despite job prospects having remained relatively stable, Manpower suggests that “cracks in the ice” are starting to appear within the country’s labor market, after six out of nine sectors reported a drop in jobs optimism.

Portrayed as “bellwether sectors”: construction, financial & business services, and utilities showed the biggest declines in confidence, having all reported a four percentage point dip in employer optimism when comparing Britain’s final quarter to its third quarter for 2016. Looking at regions, employers in Yorkshire & the Humber and Northern Ireland expect staffing levels to fall. On top of that, the Manpower outlook survey revealed that sentiment around hiring in the public sector had tumbled to its weakest level in over four years. A sector that according to Manpower, accounts for close to one in 10 U.K. jobs.

I still don’t think the optimistic August numbers are enough to ward off concerns about the future of the UK’s labor market. The sectors showing the biggest increase, according to Manpower, are agriculture and hotels/retail. The agriculture sector depends heavily on seasonal migrant workers from Europe, and just this week, British farmers called on the government to make sure they still have access to that vital labor pool after the UK exits the EU.

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