For years the growth lobby has argued that Australia needs to run high levels of immigration in order to alleviate so-called skills shortages and to mitigate an ageing population, despite the Department of Employment showing that Australia’s skills shortage “remains low by historical standards” and Australia’s labour underutilisation rate tracking at high levels:
One factor the immigration boosters continually ignore is the risk that the rise of robotics and artificial intelligence could replace many of today’s jobs, leading to an even larger pool of underemployed and underutilised workers.
Back in July, Seek’s chief executive, Andrew Bassat, warned of an “employment crisis” whereby not enough jobs will be created to replace those expected to be lost through the rising use of robotics, especially in areas like mining, hospitality, accommodation and transport.
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Around the same time, it was revealed that the construction sector is gearing-up, with FastBrick’s Hadrian X bricklaying machine capable of laying up to 1,000 bricks an hour:
Fastbrick is building a commercial version of its robot bricklaying machine, Hadrian X, which will cost about $2 million when it goes into full production in 2019.
The Hadrian X requires little human interaction and works day and night, laying up to 1000 bricks an hour, which is about the output of two human bricklayers for a day…
Continuing this theme, The Telegraph has published an article forecasting that robotic bricklayers, among other tasks, will decimate employment in the UK’s construction sector:
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Almost one in three construction jobs could be eliminated over the next two decades as advances in robotics and digital technology mean human builders are replaced.
New research from Mace predicts 600,000 of the current 2.2m positions in the industry could be automated by 2040 as the “Fourth Industrial Revolution” turns the sector on its head.
One of the hardest-hit jobs in the industry is forecast to be bricklaying, with the current 73,000 people doing the job on UK building sites expected to tumble to just 4,300.
By 2040 there will be just 15,500 carpenters and internal fitters, down from 263,000 now, and the number of labourers will plummet from 127,000 to 7,500. Painters and decorators will also be driven out with just 6,500 positions expected in two decades, compared with the current 111,000 roles…
Clearly, the rise of robotics and automation debunks the claim that Australia needs to import large swathes of ‘skilled’ workers to overcome an ageing population.
The reality is likely to be the opposite: too many workers chasing too few jobs as robots and artificial intelligence take over. So why, then, is Australia running one of the highest immigration programs in the world, especially given the extreme pressure that it is placing on infrastructure, housing, schools, hospitals and overall livability?
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The more sensible policy option is to restrict immigration and instead better utilise the existing workforce and use automation to overcome any loss of workers as the population ages – as has been utilised in Japan (where unemployment is just 2.8).
As pointed out previously, economists at MIT recently found that there is absolutely no relationship between population ageing and economic decline. To the contrary, population ageing seems to have been associated with improvements in GDP per capita, thanks to increased automation:
If anything, countries experiencing more rapid aging have grown more in recent decades… we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita… on the contrary, the relationship is significantly positive in many specifications.
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Again, the last thing that Australia should be doing is running a mass immigration program which, as noted many times by the PC cannot provide a long-term solution to ageing, and places increasing strains on infrastructure, housing and the natural environment.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
