Australians have little to fear from a rise in automation. If anything, replacing manual labouring with machine production will continue to improve our well-being.
The seemingly rapid pace of technological change and process innovations occasionally leads to reports, and sensationalist newspaper headlines, that humans will soon become redundant as robots and other machines take over the economy.
Last month, the federal Industry Department released an Australian Industry Report, providing an overview and analysis of major issues affecting Australia's main industries. It included a synopsis of the effects of automation on the labour market, and arrived at several conclusions regarding which job occupations could be most threatened by the increasing automation of production process. According to the study, machines are said to not only be substituting for labour in performing more lowly skilled, repetitive tasks but they are "increasingly replicating the tasks of medium and high-skilled workers".
Some examples of more intensive uses of technology can now be found in occupations, and industries, perhaps previously considered to be immune to the march of the machines. Computing systems are increasingly being used in the healthcare sector to diagnose diseases and other ailments, and automated dispensing systems accurately measure medicinal dosages for patients.
In the legal profession, automated processes are helping to draft simple contracts, sift through reams of case law, while in some cities, such as New York, there has been some testing of the likes of online parking ticket adjudication systems. There have even been reports of complex computer algorithms used by some media houses to write some newspaper stories, which relate to more matter-of-fact issues such as financial market fluctuations or the outcomes of sporting events.
It is generally agreed that the efficient and effective use of capital has vastly improved our lives, even since the spinning frames and power looms of the 19th century transformed the global textile manufacturing industry despite the destructive protests of the Luddites.
But these views seem to be heavily shadowed by a great sense of pessimism about the long-term effects of automation for human employment, in particular. In a speech last year, shadow treasurer Chris Bowen did point out that "technological advance is a good thing". But he soon qualified that statement by raising the spectre that continuing automation means "employment growth no longer automatically accompanies economic growth", and that machines will hollow out the lower-paid end of the job market "meaning stagnant average real wages growth and increasing economic inequality".
Our culture is infused with many a dystopian image of human impoverishment, or even slavery, at the hands of the machines we ourselves have created, but are these pessimistic narratives well grounded in reality?
I would doubt it.
It must surely be recognised, at the outset, that the process of automation we, in fact, embrace, is a consequence of our own innate desire to maximise the benefits from any exertions we undertake, with the least effort expended. Our nomadic ancestors hunted prey more expeditiously by "automating" foot traffic by inventing the wheel; our mediaeval forebears disseminated knowledge more efficiently by "automating" handwriting with the printing press; and, today, computer software is "automating" manual filing previously performed by an army of unhappy, beige-attired clerks.
It is quite true that some uses of human labour have been redefined, or even rendered irrelevant altogether, by automated production processes, and for those directly affects by such change there is an obvious period of time needed for them to find new working roles. But inasmuch as automation has destroyed some jobs, we have discovered many new uses for labour, and often in previously unforseen roles that involve far less manual hardship, or even danger, for workers than previously.
Perhaps the greatest manifestation of the greater comfort and ease experienced by labourers over time has been the long-run growth and development of the services sector, particularly the professions which provide well-paying, mentally stimulating roles in often comfortable office environments.
The relatively growing importance of women in the services sector is, in itself, a testimony to the role of automation, which has liberated them, though not entirely in all cases, from the drudgeries of household production such as cleaning and cooking.
And the growth in services employment has been fuelled, in part, by the outgrowth of technical service roles, including the ubiquitous "IT worker", whose very role in the labour market has been defined by the onset of automation.
While some economists have harboured the concern that a rise in automation will lead to an increase in inequality, it is not exactly clear cut that this would be an eventuality. If trends up to the present are any guide, and they probably should be, wages will keep rising as workers become more efficient when working in tandem with machinery and automated processes.
Another trend which should be noted is that the real prices of many goods produced, either predominantly or in smaller part, automatically have tended to decline dramatically, providing consumers with a powerful boost in their purchasing power. These price reductions have come about because automation helps to reduce the unit costs of production, and not to mention bolstering the production of goods and services compared against more time-consuming, error-prone manual processes.
There is no sound reason to think this declining-cost trend will come to a halt any time soon. It is true that cost reductions have occurred unevenly with the costs of labour-intensive products, for example education, been kept at inflated levels. But this has been influenced, in some instances, by other factors, such as labour unions and policymakers resisting attempts to reduce costs including through automation and technology uptake.
Even within the optimistic perspective concerning the fate of workers in an automated world, there can still be a role for policy reform to ease any labour market pains associated with structural adjustment. There would still be an important role for human capital investment, particularly for high-end skills, with more competitive and diverse educational options needed so that students can more flexibly navigate future working options. If the relative importance of labouring as a source of income is in decline as a result of automation, then that suggests reforms to encourage greater capital ownership, for example by eliminating income and capital taxes.
But whatever we do, policies should not be grounded in actually trying to prevent greater automation from taking place, as this would surely guarantee stalling economic growth and a reduction to our future living standards.
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