New research from job search website Adzuna estimates that around one-third Australian jobs could be lost to automation by 2030, with lower-skilled and manual labour jobs most at risk. From Business Insider:
“We run the real risk of mass unemployment in our regions and over-population of our major cities,” says Raife Watson, CEO of Adzuna.
“As it stands, Australians who work in manual jobs in regional Australia will face high levels of unemployment over the next decade and will have little choice but to up-skill and move to cities like Sydney and Melbourne”…
Risk of Automation:
To reach these conclusions, Adzuna used the findings of a 2015 report entitled “Future workforce trends in NSW: Emerging technologies and their potential impact”, taking the probability of jobs in New South Wales being automated and applying the results to the whole of Australia…
While, for the most part, Adzuna found that lower-skilled roles were at most risk, it said that white collar workers will not be immune to the rise of the machines, noting that accountancy roles ranked within the top 20 professions at risk of being automated.
The risk of widespread job losses from automation has been a growing theme over the past several years, with various reports emerging – both domestically and locally – projecting widespread impact.
For example, Bernard Salt has previously predicted that up to half of Australian jobs could be at risk from automation and digital disruption, whereas in July last year, 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. And earlier this month, Atlassian’s Mike Cannon-Brookes warned of “massive job disruption” from automation.
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While the estimates of the impacts vary, most agree that Australia’s future labour market could be hit hard, with significant labour oversupply emerging.
This directly contradicts Australia’s ‘growth lobby’, which has for years argued that Australia needs to run high levels of immigration in order to alleviate so-called skills shortages and to mitigate an ageing population. The growth lobby’s claims come despite the Department of Employment showing that Australia’s skills shortage “continue to be limited” and Australia’s labour underutilisation rate tracking at very high levels (almost 14%).
Indeed, the Department of Employment’s latest Skills Shortages report explicitly concluded that “significant shortages are unlikely to re-emerge in the short term” because “new supply of qualified workers from the higher education system is likely to remain high” and “there will be softer demand for some Professions resulting from weaker activity in key sectors and changes to work arrangements, such as offshoring and automation of some routine tasks“.
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So, the reality in Australia is likely to be the very opposite of what the growth lobby argues: too many workers chasing too few jobs as robots, artificial intelligence, and digitisation take over.
So why, then, is Australia running one of the highest immigration programs in the world, especially given the extreme pressure this is placing on infrastructure, housing, schools, hospitals, the environment and overall livability?
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 below 3.0%).
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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.
Again, the last thing that Australia should be doing is running a mass immigration program which, as noted many times by the Productivity Commission 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.
