wThrough a supermarket and technology is everywhere. Self-service checkouts, electronic shelf labels, handheld barcode scanners and video screens showing you exiting the store – captured by AI facial recognition cameras.
In an economy struggling to grow, the encroachment of these machines into our everyday lives could be an early sign of a new dawn – a tech-driven renaissance in activity after years of stagnant growth in productivity and stalled business investment. Not a bad thing.
On the other hand, it could be a glimpse of a dystopian future that is already starting to take shape. Retailers are using technology with lower operating costs instead of lower-paid but relatively more expensive humans. A surge in productivity. But for whom?
Unemployment in Britain last year reached its highest rate in a decade, except at the height of the Covid pandemic. Economic output, meanwhile, has maintained a reasonable, if pedestrian, pace of growth. Put those two things together and increased levels of productivity – output per hour of work – is the mechanical result.
Most of the gains are due to declines in employment in low-paying sectors – particularly retail, where rising labor costs are leading to job losses and hiring freezes.
The owners have blamed the government. The British Retail Consortium (BRC)’s £25bn increase in employer national insurance contributions (NICs) this year and a rise in the living wage are among the reasons. 10 percent increase in the cost of employing people In full-time entry level retail roles. The trade association also complains about Labour’s employment rights bill and packaging costs impacting jobs.
At this time of year, retailers usually have a rush of employees ready for the festive season. However, this year does not fit the usual pattern.
Data from jobs website Adzuna shows retail vacancies fell by about 6% in November, which is usually a key month for recruitment. are at the inauguration lowest point in a decadeExcept the Covid pandemic.
Much of this is due to weak consumer demand and the boom in online retail. However, the rise of machines is also playing a role. Industry survey After raising prices, investment in automation ranks second as the most common response to Labor’s business tax changes.
Overall, there are no surprises in retail employment fell by more than 350,000 In the last decade. Young people applying for low-skilled, entry-level positions – which are also easy to automate – have suffered the brunt.
There is an unspoken logic to increasing the cost of employment in the labor world. For too long, companies have relied on paying poverty-level wages to turn a profit. UK companies have lagged behind in the G7 investment league tables for decades. Economists believe that part of this is due to the lower relative cost of employing capital versus labor – especially in unstable economic times.
Recently, however, the balance has changed. Employment costs have increased; Access to immigrant workers has diminished, and workforce participation has declined amid rising levels of poor health and early retirement. Much of this is the result of policy choices.
“The higher the risks around your employment costs, regulation and recruitment – the more likely you are to consider options to automate as a business,” says Professor Terra Alas of the Productivity Institute, a research organisation.
So far, the data shows the UK is still at the bottom of the transition.
Business investment has not exploded, but is growing – with a 1.5% increase in the third quarterduring this time Productivity increased 1.1% Compared to a year ago. Although annual average productivity growth is still below the 2% level before the 2008 financial crisis, it is better than the flatlining of investment in recent years.
Successive governments have touted productivity as a silver bullet to Britain’s decades of economic underperformance. However, no one would have campaigned for any gains to be made at the expense of workers.
There is also an irony in the prospect of a “jobs-lite boom” under Labor – a party that traces its roots, no matter how thin they are today, to the struggle of organized labor amid the galloping productivity gains of the Industrial Revolution.
In the early 19th century, productivity skyrocketed as factory owners invested in steam-powered power looms, weaving frames, and mill engines. First, the spoils went largely to the capitalists – later described as “”.Engel’s break“, after the philosopher Frederick Engels, to describe years of wage stagnation as Britain became the world’s richest economy. Many angry workers turned to revolt.
In the long run, as workers moved into new occupations, standards of living rose. The Luddites were on the wrong side of history. However, progress was not without social upheaval, nor was it taken lightly. There were struggles for employment rights and wages through the emerging trade union movement – culminating in political representation and the creation of the modern welfare state.
There are obvious parallels today. This month, Andrew Bailey Warning that job displacement similar to the Industrial Revolution was highly likely – the Governor of the Bank of England called on the UK to put “training, education, (and) skills in place” to help those at risk.
Allas says there are reasons to be optimistic, and not just because new technologies generally help create new forms of work – helping people leave menial jobs. Businesses are also concerned that their pipeline of middle managers will be depleted if all entry-level jobs are automated.
She says, “Humans are infinitely malleable. We have the capacity to learn and we will figure out how to learn in new ways.”
However, if change is not managed well there will be serious problems. Workers will demand to be brought along, not left behind. There are some lessons from history for Labour.
