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Will Automation Raise Pay?

Topics: Career Profiles
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Are robots really coming for your job? Technology has been changing the way we live and work since the time of the Industrial Revolution. However, automation has created more jobs than it’s destroyed, historically. But there is some debate about whether this will continue to be the case going forward.

There is some evidence to suggest that automation could raise wages while shifting the economy in other ways. Could automation raise pay but also reduce the expansion of some sectors of the job market?

“A little-appreciated rule of automation: Robots require people skills, but while the jobs working next to them may pay better, their numbers are fewer,” writes Christopher Matthews at Axios.

Automation Equals Efficiency

Automation often means improved efficiency. How a company applies that benefit is up to them. The concern is that companies may raise pay as a result of the increased productivity automation brings, but that workers won’t win in the end. Eventually, employers may opt to expand without hiring workers (human workers that is) at their previous rates.

What’s happening at Boxed is an example of this. The online retailer has boasted that it’s brought automation to its warehouses without laying off any workers. The company has even increased salaries. But, as the company expands, it isn’t hiring at the rate that it used to. Axios reports that in order for Boxed to triple its business, it will only need to hire 33 percent more workers. They also cite a study from earlier this year by MIT economist David Autor that found that automation reduces jobs within automating sectors.

Manufacturing Jobs Will Change

It stands to reason that automation could have a major impact on the manufacturing industry, given the shifts we’ve seen so far. While technology does allow companies to raise salaries, it also allows them to gradually reduce hiring rates, so that jobs in the industry slowly decline. Autor tells Axios that automation is just one of the reasons these changes occur. Trade also has a significant impact on the changing manufacturing job market, too.

How Can Workers Prepare?

Manufacturing work is changing due to factories relocating offshore and because of automation. Any way you slice it, there’s certainly a possibility that there will be fewer jobs in this industry going forward. But robots are probably not going to take away all the manufacturing jobs.

“Instead, automation will steadily force labor upstream, with human work becoming more specialized,” writes Andrew Powch at Observer. “The future manufacturing workforce won’t be working with the products themselves — manufacturing employees will be designing robots, writing sophisticated programs, directing machine learning algorithms, coordinating the installation of the advanced machinery, and troubleshooting equipment.”

In other words, manufacturing jobs will change, and that will have the biggest effect on lower-paid, lower-skilled workers. Jobs in the industry will require more skills and specialized training. On the upside, they’re also likely to pay more. The question is, will there be enough of these more specialized, higher paying jobs — and will workers have access to the training they need, in order to compete?

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