Last month, unemployment in Canada reached a record low of . Alongside low unemployment, many industries saw — and are still seeing — a worker shortage, with the number of job vacancies in Canada reaching 900,000 in January.
Both of these things are good for workers, right?
Prospective employers, desperate for new recruits, are “.” Many lower wage jobs have even seen an , like the for truckers recently announced by Walmart.
The pandemic is partially responsible for this labour shortage, as the immigrant workforce supply dried up throughout the lockdown. However, the in Canada has also been a factor.
Is automation the answer?
The solution to the worker shortage proposed by the is .
Advocates and critics have long argued over the impact of automation on employment. Advocates believe automation can be used to perform or jobs, freeing up workers to learn new skills and take on better jobs.
Recent supports the argument that automation creates jobs. The study found that investing in robots boosted the efficiency and quality of work while reducing costs, increasing productivity and creating more job opportunities. Similarly, a 2020 report from Statistics Canada also found that .
The impact of automation on work can only be assessed over the longer term and according to whether vacancies are created by those leaving their jobs or retiring and whether the activities of those departing are fully automated.
But critics have argued that automation and advancements in technology create an where opportunities only exist for highly and lowly skilled workers, leaving less work for semi-skilled workers who must either increase their skills or take .
A common example used to illustrate the detriment of technology to employment is the case of . Once a titan of physical video rental with 60,000 employees, Blockbuster was unable to compete with Netflix’s (who only had around 2,500 employees) new streaming services and . Netflix automated the video rental business while Blockbuster retained its physical labour-intensive model until it was too late.
Automation might not be so bad after all
The reason why automation hasn’t had a more detrimental impact for workers can be explained by two factors. Firstly, employees are also consumers. To reduce employment is to reduce the market for products, which is bad for .
As a management professor, I often use an incident that supposedly occurred between , leader of the United Automobile Workers trade union, to illustrate this point.
While showing Reuther the new automated assembly lines at his car factory, Ford subtly threatened the future of the union: “How are you going to get those robots to pay your union dues?” Unfazed, Reuther replied: “How are you going to get them to buy your cars?”
Secondly, firms can easily resolve issues with new technology by employing human workers to take over. Take for example, the failure of automation in the fast food industry and the tale of , that lasted a single day, only to be replaced by human workers when it couldn’t keep up with demand. Such instances reveal the way in which workers offer an easy substitute for automation that fails to cut the mustard (or flip the burger).
The current situation is different because employers are struggling to source workers. The reliance on automation is becoming a necessity, rather than a source of competitive advantage. Moreover, the labour shortage means that turning to workers as a substitute for failing technology is a less viable strategy, so firms are more likely to persevere in introducing new technology.
The future of automation
It has been argued that about half of the activities undertaken by workers could be . This does not mean that all of these activities will be automated. Nor does it mean that 50 per cent of jobs will necessarily disappear in the next 30 years without other jobs emerging as a result.
However, current circumstances, especially the shortage of workers, is a powerful motivation for automation. We could see a significant increase in automation use in the workplace over the next few years.
The challenges of filling worker vacancies may be good news for workers now, but the longer terms consequences still remain to be seen.
Geraint Harvey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
