Positive And Negative Impact Of Automation On The Job Market

Automation has experienced significant growth in recent years, permeating various industries.

While concerns about job displacement due to AI’s ability to perform tasks previously handled by humans have arisen, the impact of automation on the job market is both positive and negative. On the positive side, automation brings the advantage of job creation and increased productivity. However, it also leads to job displacement and polarisation, where there’s a gap between low-skilled and high-skilled jobs.

Understanding how automation can simultaneously create and eliminate jobs may seem perplexing. This article thus aims to shed light on the subject by providing a comprehensive overview of automation, its advantages, disadvantages, and feasible solutions to ensure there’s a balance.

What Is Automation?

Automation refers to the utilisation of technology, such as artificial intelligence and robots, to replace human involvement in tasks that were traditionally performed by people. It is widely recognised for its ability to enhance efficiency in various sectors, including healthcare, transportation, and construction. Automation finds application in diverse areas, such as employing software to automate repetitive business transactions, analysing content, and storing information.

What Is the Job Market?

The job market, also referred to as the labour market, is a non-physical concept that encompasses the collective conditions related to employment opportunities, including the interaction between supply and demand for labour.                               

Demand and supply serves as the most essential element in the job market. It’s influenced by various factors such as skills, economic conditions, the need for labour, and geographical considerations.

Advantages of Automation on the Job Market

1. Reduced cost: Companies can lower business expenses through the use of automation. By replacing human labour with machines and software, businesses can cut down costs associated with wages, maintenance and other overhead expenses.
2. Increased productivity: The introduction of automation, whether through AI or putting in place software to carry out specific tasks, reduces repetitive and tedious tasks. This in turn allows employees to focus on more meaningful and valuable work, resulting in expanded productivity and efficiency.
3. Job opportunities: Automation has the potential to generate fresh employment opportunities. As these technologies are implemented, there may be an increased need to hire additional personnel to maintain and manage the different software or machines installed. Thus, automation may directly result in the creation of new job opportunities that necessitate creativity and expertise.     
4. Reduced risk: Automation can directly reduce the risk of work-related accidents, which are too common. By designating hazardous and tedious work to machines, humans can be protected from risks posed by these tasks. According to the International Labour Organisation, approximately 2.3 million women and men around the world succumb to work-related accidents or diseases every year (World Statistics). Industries such as construction, manufacturing and mining particularly benefit from this approach.
5. Accuracy and precision: Machines are less prone to errors. Automation not only reduces the errors made during the manufacturing period but also facilitates quick and accurate analysis of results, thus effectively detecting errors in the current processes that might otherwise go unnoticed.
6. Economic advancement: Through automation, businesses can undertake tasks at reduced cost, while generating higher output. This in turn benefits the consumers by offering goods at a reduced price due to the lower operational cost incurred by businesses. Ultimately, automation contributes to economic growth by fostering cost efficiency and increased productivity.

Disadvantages of Automation on the Job Market

1. Loss of employment: In some cases, replacing manual labour with automation can potentially displace employees who were previously responsible for tasks that are now handled by automated systems. And In other cases, it may result in reduced wages for workers
2. It can contribute to disparities in both employment and compensation: Jobs replaced by automation often transition into low-paying roles or may be out of demand. However, newly generated jobs stemming from automation are high in demand. They also tend to be high-paying jobs that require advanced skill sets.
3. Need for new skills: Automation in the job market necessities the development of new skills such as the ability to manage, develop and supervise new technologies across various industries. With each technological advancement, the acquisition of new skills becomes important. Consequently, previously relevant skills may become irrelevant and undervalued.
4. Mental health effects: The use of automation in certain sectors can result in reduced demand for employees’ skills and subsequent loss of jobs. These sudden displacements without prior planning may have adverse impacts on the mental well-being of the affected workers.

Other negative impacts of automation on the job market are as follows:

• The absence of human effects as software lacks emotional intelligence and therefore cannot totally and perfectly replicate or replace human elements in certain tasks.
• Too much reliance on technologies
• Power imbalance as employers may have an advantage over employees.

Promoting a Healthy Balance: Effective Solutions

1. Businesses can empower their employees by facilitating skill development programmes that align with automation trends. This can involve organising several workshops on skill acquisition or sponsoring relevant courses.
2. Creation of more job opportunities that cover emerging industries that are influenced by automation.
3. Implementing effective measures to minimise work-related injuries is essential. This includes maintaining a safe working environment and adhering to occupational safety standards.
4. Formulation of several policies that protect the interest of employees from undue displacement. This implies putting in place measures to prevent undue displacements and policies for support after job loss.

It’s important to remember that automation has both positive and negative impacts. Adapting to these changes involves learning new skills, empowering employees and maintaining a balance between the demand and supply curves in the job market.