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Wages are flatlining around the world – is automation to blame?

Wages are flatlining around the world – is automation to blame

Robots are increasingly being used in factories to replace low-skilled workers. Image: REUTERS/Rebecca Cook - RC1D371BCDA0

[box type=”info” align=”” class=”” width=””]Emma Charlton Senior Writer, Formative Content[/box]

Fast-paced technological developments like automation are becoming an everyday reality, transforming the workplace.

And a new report from recruitment firm Hays highlights how automation is not just putting jobs at risk, but also keeping a lid on salaries.

The stagnation in global wage growth is partly attributable to an uptick in technology adoption, Hays says, citing an academic report that found one extra robot per 1,000 workers could lower wages by as much as 5%.

And that pressure is likely to continue, the report argues, as more robots are installed around the world in the coming years.

Image: Hays, OECD


Many of these themes are explored in the World Economic Forum’s Future of Jobs Report 2018, including the notion that governments should help people prepare for the workplace of tomorrow by ensuring they have the right qualifications.

The Forum has called for more “reskilling and upskilling”, saying “human skills” like creativity and critical thinking will become just as important as technological ones.

“If we don’t seek to address these issues in the near future, we risk further discouraging workers by failing to increase wages, provide full employment and account for technological progress in the workplace,” says Hays Chief Executive Alistair Cox.

“The skills and wage crises are ultimately linked, and to avoid either spiralling out of control employers must collectively reevaluate both wage growth and skills.”



Underscoring a need to better match workers’ competencies with jobs, the Hays Talent Mismatch indicator – which measures the gap between skills firms are looking for and those available – climbed to the highest level since the company started compiling it in 2012. Year-on-year, the gauge rose to 6.7 in 2019, up from 6.6 a year prior.

Hays’ research also echoed the Forum’s in illustrating how female and male workers are likely to be affected differently by these technological disruptions. Professions that are often dominated by women – for example those in retail – could be particularly hard-hit, the Hays report says, with large numbers of jobs being eradicated and not replaced.

Governments and businesses should “ramp up” programmes to help women enter traditionally male-dominated sectors, like technology, the report notes.

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