Consequences Of Layoffs Due To Automation
Layoffs Due To Automation: Estimations Pouring In, But What About Facing Consequences?

Yes, the technology is advancing. Yes, the wave of automation coming. Yes, there will be job cuts. Yes, they will be immense. Every research firm and experts have been estimating that there be an enormous amount of job cuts due to automation in next few years and decade in different fields including manufacturing, BPO, automobile, and others. There are long-held discussions and debates on discussion forums and online platforms such as Reddit about how automation would replace labor and enhance the production capacity. It seems that there is a lot of focus on discussions about whether automation will take our jobs and what can be done about it. However, there is less focus on what will happen next. The estimations offer the scenario of next five years or a decade. But what needs to be focused on is how we are going to fix the problem. It is favorable to know that a specific amount of jobs will be cut as the wave of automation hits various industry. But more focus needs to be given on how to counter the issue.

The U.S. think tank the Center for Global Development (CGD) has published a paper in which researchers found that people are discussing more about projections and statistics, but less about how to counter those problems. Researchers of the study, Lukas Schlogl and Andy Sumner, argued that it is impossible to determine how many jobs will be cut due to automation. However, they added that the effects will be significant, specifically in developing economies. Countries in which the labor market is inclined toward doing work that requires manual labor would be affected severely by automation. The authors suggest that there will not be mass unemployment, but the polarization of the labor market and reduction in wages.

This implies that there will be employment for some of the people, but it will be very low-paid and unstable. Moreover, there may not be other benefits such as health insurance, paid vacations, or pension. The job security will be in jeopardy and the standard of living will lower as compared to now. This will lead to political dissatisfaction. On the other hand, the businesses will be able to reap benefits of the increase in productivity due to the emergence of innovative technologies.

Experts have suggested various solutions to layoffs such as skill enhancements and learning to work in collaboration with machines. Authors of the study also proposed some solutions. One of the solutions they propose is “quasi-Luddite”. It involves measures to be taken to reverse the trend of automation. These measures involve charging taxes on goods made by robots and implementing regulations that make automating existing jobs difficult. The goods are produced with automation are cheaper than the ones made from manual labor. However, these measures are difficult to implement as customers will look for those goods where taxes are not applicable. The solution to this strategy is to reduce labor costs and benefits.

The other solution involves what authors call “coping strategies”. This involves re-skilling workers whose jobs might be cut or offering economic safety nets to labors affected by automation. However, it is not determined which skills need to be acquired. On the other hand, there is a problem with safety nets that the labor costs will be increased. This tells that enough thinking and discussion have not done to find political and economic solutions. As there are long-held discussions on how many jobs will be cut, there must be discussions on how to counter the issue of layoffs due to automation. Then, it will be possible to stop the global crisis.

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