Automation revolution to hurt blacks even more

Country not prepared to deal with future scenario of massive job losses.
Country not prepared to deal with future scenario of massive job losses.
Image: 123RF/ dolgachov

Businesses around the world are cottoning on to the value of transferring labour from human workers to machines. Automation can increase efficiency and decrease labour costs. It helps employers to avoid complex challenges such as wage increases, labour protests and strikes. Consumers also benefit from automation when products and services become cheaper because of reduced input costs.

But, while there are numerous benefits to automation, recent economic trends in the developed world suggest that it may also be a key driver of economic inequality.

Scholars have warned that this technological revolution could change the relationship between labour and capital in a big way.

Their concern is how smart technologies exacerbate economic inequality by devaluing low-skilled labour and hollowing out the middle class. The US has already experienced this in productivity and median household income.

Limited work has been done to study the potential impact of automation on economies in the developing world. That's what prompted me to investigate the situation in South Africa. I used data collected by Statistics South Africa for its quarterly labour force survey and an automation index produced by academics from the University of Oxford. From this, I was able to estimate that occupations performed by almost 35% of SA workers - about 4.5 million - are potentially automatable in future.

But the country appears ill-prepared for this reality. There is little discussion at policy level. No research has been done on possible future scenarios. There's also uncertainty about how the uptake of automation may further drive inequality and preserve the asymmetry in the country's economy.

The data I worked with indicates that roughly 14 million South Africans work in around 380 different occupation types, whereby 64 of these, estimated to employ about 3.6 million workers, have a 90% or greater probability of being automatable in the near future. These include cashiers, tellers, secretaries and telephone salesmen, among others.

Workers of all skills levels are at risk, but those in low and medium-skilled occupations are generally more at risk.

So, the country's previously disadvantaged population groups are more exposed to job losses due to automation than their white counterparts. Half of all black workers are in occupations with an 80% or greater probability of automation; so are 47% of coloured workers. For whites, the proportion is only around 30%.

These differences are indicative that technological advancement upholds the status quo by favouring skilled workers and those who can afford higher education.

Despite these risks, it seems SA businesses will seize the opportunity to limit dependency on human labour.

There seems to be no answer to how South Africa plans to navigate this wave of technological advancement.

US presidential candidate for 2020 Andrew Yang's campaign is promising to introduce universal basic income, through which every American above 18 years will receive $1000 per month from the government to provide security and enable mobility for workers displaced by automation.

*Le Roux is a senior lecturer at Stellenbosch University. Article courtesy of The Conversation.

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