WHY ARE THERE STILL SO MANY JOBS?

I can still remember vividly when I got my first job. My red and white checked shirt matched exactly the table cloths. At 14, my first job was as a “Busboy”, that is I cleaned and wiped tables at Pizza Hut…

It was a fun job, greeting and talking to people as I worked. The pace was fast and the time flew. Plus, there was always plenty of Pepsi and Pizza for the hard working staff?!

Try finding a dine in Pizza Hut store these days. Yep they exist, but they are hidden away. See Pizza Hut prefers the more profitable take-away business (think less rent and wages due to the reduced floor space….)

Why Are There Still So Many Jobs

Like many other jobs that have been changed or replaced over the years, my first job has taken another form. As for me, I’m now happily helping people make informed investment decisions.

Many people see the current technological revolution as a threat to their employment prospects and end to the usefulness of human existence.

Destruction. Death. Extinction….

Artificial Intelligence (AI) is growing so quickly that humans will be rendered obsolete as their jobs will be replaced by robots.

Technology is taking our jobs and Arnold Schwarzenegger’s portrayal of the Terminator is really not so farfetched.

If you believe some of the numbers being projected by global think tanks, you may think robots are out to get us. A report by McKinsey & Company said in the US alone, automation could kill 73 million jobs by 2030.

Why Are There Still So Many Jobs

In Australia, it’s estimated about 40 per cent of current jobs will not exist in 10 -15 years due to automation.

That’s a BIG number which scares a lot of people!

From the supermarket check-outs to bank branches (are there any tellers left?) we will soon be dealing with more machines than people.

But is this something to be scared of?

The fact is there are many tasks we don’t want to do that can be done (maybe even more efficiently) by robots.

Do you want to spend time vacuuming when you can get your Roomba robot to do the cleaning automatically? We already have dishwashers and washing machines – so why not a robot to dust and clean the bathroom?

Why Are There Still So Many Jobs

I don’t know about you, but I’d much rather spend my Saturday morning sipping coffee in a café while my robot scrubs the bathroom floor Cinderella style….

Humans have always invented stuff to replace human labour and increase productivity. Over the centuries we have seen some amazing technological advancements -e.g. motor cars replacing horse carriages, printing presses replacing manual writing and many other examples.

Why Are There Still So Many Jobs

But still, people managed to find and create new jobs in response to new technologies.

Why hasn’t automation eliminated human employment?

The answer is human creativity.

We humans are the most creative and intelligent creatures here on earth. We can analyse, reason and are able to use all the available knowledge and information to become more efficient.

We always find ways to get more from less and to maximise the economic output from every activity.

At the same time, we seem to be an insatiable bunch. We want more, better and new things, so we keep on dreaming up new stuff.

Remember when the first automobiles came around? They were minimally built and designed to make the moving of people and goods faster and more efficient.

However, soon creative thinkers realised that Henry Ford’s Model T, often referred to as the “mechanical cockroach”, could be adapted for MANY other applications; even pulling a plough.

Why Are There Still So Many Jobs

They could be converted into powerful tractors able to do the work of many horses or trucks moving goods faster and more efficiently. Often a rear wheel would be removed and replaced with a pully and leather drive belt instantly converting the cockroach into a powerplant capable of milling grain or powering the blade of a mobile lumber mill.

Ford had designed a mobile combustion engine. It was human creativity and ingenuity that enabled it to power ANYTHING that man could imagine.

From those humble beginnings, we now have all types and styles of cars, trucks, buses with a variety of colours and designs.

Driverless cars

And maybe in just a few years we will have driverless cars. No automobile, since the Model T, has had such far-reaching impact upon society and its productivity.

The advent of driverless cars might just challenge that statement.

Why Are There Still So Many Jobs

The impact on your productivity and efficiency that driverless cars promise to deliver will revolutionise travel.

From my point of view, the new technology – automation, robots and AI will contribute to our overall efficiency and productivity.

Ultimately, this productivity will feed back into the “Economic Rent” and Land prices.

Don’t fear automation

To accomplish anything requires an array of skills, planning, technical proficiency, some inspiration, perspiration and plain brute strength.

Automating some of these tasks doesn’t make the other ones unnecessary. In fact, it makes them more important in increasing their economic value.

Why Are There Still So Many Jobs

While many futurists may paint a dire situation on the jobs that will be eliminated by robots (automation), they also acknowledge many new jobs will be created in the process.

Economist Andrew Charlton said: “The nature of work is changing in a way that was improving the competitiveness of the economy but also creating more jobs that were good jobs.”

Why Are There Still So Many Jobs

Why Are There Still So Many Jobs

You are designed for bigger and better things

Technological improvements allow humans to focus on more cognitively demanding tasks.

“As our tools improve, technology magnifies our leverage and increases the importance of our expertise and our judgment and our creativity.” David Autor, Professor MIT Economics

So, the more productive we become, the more possibilities we foresee, the more we want, the more we create.

This requires even more technological advancement.

These feed the continual loop of advancement.

Did I hear you say, “but this time it’s different?”

Rubbish.

Think of Henry Ford’s mechanical cockroach.

In the 1900’s, 40% of the workforce was employed on farms. In 2018, this figure is now just 2% of the workforce.

How scary would have it been for a farm worker of the 1900’s to know this. To have realised that 19 of every 20 farm jobs would become redundant!

  • Where would all these unemployed farmers find jobs?
  • How would we be able to feed everyone?

Yet we eat more, produce more and employ less in the agriculture industries.

If you asked that farmer what jobs will people be doing in 100 years’ time, do you think he would have answered?

  • Environmental lawyer
  • Yoga instructor
  • Barista
  • Drone operator
  • Crypto-Currency blogger etc

Why Are There Still So Many Jobs

Just because you and I can’t envisage the jobs of the future doesn’t mean they won’t exist.

Humans are always striving to produce more with less. To continually increase our productivity. And many of these gains come from technological improvements.

As technology improves, jobs and industries will be abolished BUT new jobs and industries will be created.

Don’t limit your thinking – the world evolves.

As do employment opportunities.

What I can say is this time is not different. We just cannot envisage how it will unravel.

Why Are There Still So Many Jobs

We do not know what the new jobs will be or what technological advancements will occur.

There will be jobs. We just don’t know what they will be.

Many workers will be underqualified and like the 1900’s farmer, will need to upskill or re-train.

The transition might be hard for some. Especially those who resist or deny its occurrence as the Luddites did.

Why Are There Still So Many Jobs

As British brain surgeon Geoffrey Jefferson once said, “Not until a machine can write a sonnet or compose a concerto because of thoughts and emotions felt, and not by the chance fall of symbols, could we agree that machine equals brain – that is, not only write it but know that it had written it.”

In the end – all the new technological advancements will increase our productivity which must manifest back into a boom bust cycle.

IMPORTANT NOTICE

Disclaimer: Any opinions or recommendations expressed here do not purport to Financial Advice but rather should be considered General Advice and does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate to you and whether you should act upon it. Should Financial Advice be sought, we suggest you seek such advice from an appropriately qualified advisor. Any yields, rental income, tax rates, interest rates, depreciation rates, inflation rates Dividends per Share (DPS) and Earning Per Share (EPS) etc shown are estimates only and should not be used as a guide to future performance. Past performance is not necessarily a guide to future performance and should not be relied upon for this purpose. Authorised Representative of PGW Financial Services Pty Ltd – AFSL 384713
2019-02-28T10:14:18+10:00

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