Low Skilled Jobs and High Skilled Jobs and Nothing In Between?

In a report from Swedish Foundation for Strategic Research (http://strategiska.se/app/uploads/varannat-jobb-automatiseras.pdf) from 2014 the author Stefan Fölster warns that more than half of all jobs in Sweden are at stake due to automation during the next ~20 years. If this really means 50% unemployment remains to be seen. It is not the first time for Sweden to have structural conversion. This has happened before and every time it has been possible to create new jobs to assimilate the unemployed. It may be difficult to see now which new jobs will appear. A follow up report from Swedish Foundation for Strategic Research in 2014 (http://strategiska.se/app/uploads/de-nya-jobben-i-automatiseringens-tide...) by the same author discusses which the new jobs are.
Note that here automation can include digitization and computers and computer software.
It is of course difficult to be specific about future jobs that are not threatened by automation but something can be said.
Carl Benedict Frey och Mikael Osborne
(2013) at Oxford University in the “Programme on the Impacts of Future
Technology” systematize in detail the operations performed in different professions in the first place to understand to what extent people with disabilities can continue to work in their professions. Applying the same approach for future jobs as a whole it was possible to define eight dimensions that computers will continue to have problems to perform,
In the table below the eight dimensions are listed with their original formulation:

Finger Dexterity: The ability to make precisely coordinated movements of the fingers of one or both hands to grasp, manipulate, or assemble very small objects.

Manual Dexterity: The ability to quickly move your hand, your hand together with your arm, or your two hands to grasp, manipulate, or assemble objects.

Cramped Work Space and awkward Positions: How often does this job require working in cramped work spaces that requires getting into awkward positions?

Originality: The ability to come up with unusual or clever ideas about a given topic or situation, or to develop creative ways to solve a problem.

Fine Arts: Knowledge of theory and techniques required to compose, produce, and perform works of music, dance, visual arts, drama, and sculpture.

Social Perceptiveness: Being aware of others’ reactions and understanding why they react as they do.

Negotiation: Bringing others together and trying to reconcile differences.

Persuasion: Persuading others to change their minds or behavior.

Assisting and Caring for Others: Providing personal assistance, medical attention, emotional support, or other personal care to others such as co-workers, customers, or patients.

Other researchers have formulated more sweeping statements like: The only jobs in the future will be three kind of duties: To solve new problems, Work with information, and Perform non-routine manual operations.
Digitization/automation also creates new jobs. Data specialists like system analysts, developers and programmers will most probably continue to be a big category with a growth rate of about 2000 persons per year. The trend to move IT- and software-professions to low cost countries have not made any significant impact in Sweden.
Add to this all engineers that construct and build digital hardware.
New business models developed using new technology or demanding new technology and vice versa may have a significant impact on new jobs.
New material technology or the insight to develop old well known material may also have a great impact. One example is the observation that glass can be very transparent and in 1965 it was suggested that hair thin fibers could be used for digital communication thus paving way for
today´s vast communication volumes both for industry and persons.
New digital platforms created by companies also contributes with new jobs directly related to the business. Here it is generally quite few persons (examples are Spotify, Blocket).
Regarding e-trade, companies creates jobs also in the distribution and delivery and returns to/from the customer.
Digital technology makes it easier for companies to reach a bigger market and sell in other places.
Digital technology also makes it easier to diversify a company’s product and thus more market people and sellers are needed.

This picture looks positive but a more thorough analysis in the two categories:

    The employment potential to create digital technology including robot technology and the potential by dealing with digital platforms including follow up jobs, e.g. deliver e-trade goods and service diversification.
    The employment potential due to increased incomes.

Show that this is not enough to compensate for the effects of the automation. The total effect of digitisation, increase in income, automation and trend gives a negative employment effect which is shown in the report.

All this can contribute to a gloomy description of the future on labor market. However the report shows that new jobs can be created. An attentive insight is that digitization gives an increased complexity in goods and services which in turn creates many new jobs. With digitization many branches can produce and handle a much larger assortment. All those new and different variants of goods and services shall be sold, distributed and be served. This will increase the demand for different jobs from sellers to repair persons. Small companies can also reach the market simpler and to a lower cost than earlier which creates new job possibilities for craftsmen, self-employed, consultants etc.
Add to that the demand for jobs due to increased income. One example is in the food industry where cashiers will decrease but jobs in bakeries, delicatessen counters and similar will compensate for that. Tourism related jobs, environmental jobs will increase including entertainment and security services. Time will be more and more important – at least for the high skilled jobs with high salaries – will call more and more for jobs like Hemfrid (house cleaning), Linas Matkasse (food delivery) and personal trainers.

If all these are high skilled jobs with high salaries can be questioned. Most of them are probably on the low-skilled side, but still requiring basic skills like ability to count, speak and read the language.

Obviously there may be a return to a situation where the demand for human workforce is not particularly high. In this situation the welfare (pensions, caring for elderly, healthcare, children’s daycare, education etc.) may be at risk for countries that want to continue to maintain welfare by burden on human work instead for seeking other tax basis.

To change tax basis is, however, a delicate matter. E.g. let’s assume that real estate is taxed instead of human work. It would require that those who own the real estate have enough income. That is the case if most workers and service providers live in the country, but with the possibilities to work remotely, they may live abroad and pay tax in another country. A Value Added Tax is probably part of the solution, but it cannot be too high without affecting e.g. the tourist industry. Perhaps it is time to reconsider Bill Gates proposal that robots that take your job should pay tax.

Comments

The proposal that robots should pay tax is actually a replacement of the Payroll Tax (Arbetsgivaravgift). Such a replacement will probably be necessary to keep up the income of the state, if that is regarded to be necessary. It may be integrated in the VAT.