AI responsible for 70 percent of wage cuts
The gap between the rich and the poor has been growing steadily around the world. The lower and middle classes have been earning less and less for decades, especially in the US. Some of the most frequently mentioned reasons behind this trend, according to Forbes, are the outsourcing of jobs and the weakening of trade unions. However, in a recent study by the National Bureau of Economic Research, researchers have identified another significant reason: the increased rate of job automation. Robots are responsible for 50 to 70% of salary cuts in the US since 1980.
Machines are taking over human jobs
The researchers examined the change pattern of salaries among certain population groups and the tasks that were automated in different industries between 1980 and 2016. Industrial workers were hit especially hard due to these technical advancements. For men without higher education, the income has fallen by 15% since 1980. On the other hand, employees in offices, in trade or in the service sector and those with higher education have not yet felt these effects.
The World Economic Forum (WEF) has warned that this trend is probably set to continue in the future. In a 2020 report, they predicted that AI could replace human employees in banks, driving vehicles, social media and even medicine. “A new generation of smart machines could take over a large proportion of the existing human jobs,” says the WEF.
AI will soon require additional education and training
Experts at the WEF believe that even though many jobs will be lost to automation, many others will arise with the progress of this new industry. Requirements for these jobs will be on the creative, strategic, and interpersonal sides. Robots will most likely take over the more repetitive jobs.
The WEF estimates that AI will erase around 85 million jobs but will create 97 million by 2025. Half of the workforce will need to be retrained in order to be able to cope with the new tasks. That could compound the very problems that the National Bureau of Economic Research has identified. Again, those with lower income and education might fall by the wayside, while those with higher education are safe. That could further exacerbate class inequality. The researchers see the promotion of education by politics as an essential element in efforts to prevent this trend.