Tube strikes are only the tip of the iceberg

7 August 2015

Yesterday’s London Tube strike caused the usual scenes of chaos and encouraged calls for driverless trains that would cut many of the striking staff out of the service altogether. Driverless trains already run on London’s DLR line and have done for nearly 30 years, so it may be the the shift is only a matter of time. We can expect the march of the robots to be accompanied by intense debate and many more strikes, with the drivers’ unions unlikely to go gently into the night. Furthermore, strikes over the prospect of driverless trains and automated ticket booths may foreshadow a larger battle over the conduct of public services.

A feature of the recent decades of computerisation has been the automation of routine tasks. Economists have observed that many skilled, but repetitive, manual tasks have been automated and are now conducted by robots. The evidence is complex, but suggests that the jobs of middling pay are certainly changing in nature, and may be declining in number.

 

Automation of routine tasks destroys middle-income jobs
Source: University Alliance

 

One of the critical questions facing economic policy-makers is whether the wave of technological change will overwhelm our limited physical and cognitive faculties. Can humans remain valuable in the face of rising artificial intelligence and improved robots? A recent symposium in a leading economics journal was optimistic:

Journalists and even expert commentators tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity, raise earnings, and augment demand for labor. Changes in technology do alter the types of jobs available and what those jobs pay.
…the interplay between machine and human comparative advantage allows computers to substitute for workers in performing routine, codifiable tasks while amplifying the comparative advantage of workers in supplying problem-solving skills, adaptability, and creativity.

As positive a picture as that paints, there is no doubt that some people will lose their jobs as a consequence of the changing labour market. Deloitte estimate that a third of UK jobs are at high risk of being replaced by robots in the coming twenty years. Income, wealth and jobs will be redistributed away from those with manual and technical skills, towards those with excellent social or abstract reasoning skills.

No redistribution of that scale occurs without resistance and unions are likely to be at the forefront of it, as they have been for Tube workers. Union membership in the private sector has fallen to 14 per cent of employees but remains well above 50 per cent in the public sector. As public sector managers seek to follow their private sector counterparts and take advantage of automation, industrial action could become a feature of the UK’s public services.

James Zuccollo, Senior Economist, Reform 

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