Luddites were wrong — tech does not kill jobs

luddites-textile-mill-2Technology creates more jobs than it destroys, and while we might fear robots coming over here and taking our jobs, actually they will be doing us a favour, according to a new report.

Economists at Deloitte were crunching the numbers of census results in England and Wales since 1871 and have found that the rise of machines has been a job creator rather than making working humans obsolete.

Findings by Deloitte such as a fourfold rise in bar staff since the 1950s or a surge in the number of hairdressers this century suggest that technology has increased spending power, and created new demand and new jobs.

Their study, shortlisted for the Society of Business Economists’ Rybczynski prize, argues that the debate has been skewed towards the job-destroying effects of technological change, which are more easily observed than its creative aspects.

Authors Ian Stewart, Debapratim De and Alex Cole said that going back over past jobs figures paints a more balanced pictures.

“The dominant trend is of contracting employment in agriculture and manufacturing being more than offset by rapid growth in the caring, creative, technology and business services sectors,” they write.

“Machines will take on more repetitive and laborious tasks, but seem no closer to eliminating the need for human labour than at any time in the last 150 years.”

The study found that hard, dangerous and dull jobs have declined.

In some sectors, technology has quite clearly cost jobs, but Stewart and his colleagues question whether they are really jobs we would want to hold on to. Technology directly substitutes human muscle power and, in so doing, raises productivity and shrinks employment.

“In the UK the first sector to feel this effect on any scale was agriculture,” says the study.

In 1871, 6.6 percent of the workforce of England and Wales were classified as agricultural labourers. Today that has fallen to 0.2 percent , a 95 percent decline in numbers.

The census data also provide an insight into the impact on jobs in a once-large, but now almost forgotten, sector. In 1901, in a population in England and Wales of 32.5 million, 200,000 people were engaged in washing clothes. By 2011, with a population of 56.1 million just 35,000 people worked in the sector.

“A collision of technologies, indoor plumbing, electricity and the affordable automatic washing machine have all but put paid to large laundries and the drudgery of hand-washing,” says the report.

Caring professions like healthcare make up a bigger proportion of the workforce.

The report cites a “profound shift”, with labour switching from its historic role, as a source of raw power, to the care, education and provision of services to others.

It found a 909 per cent rise in nursing auxiliaries and assistants over the last two decades. Analysis of the UK Labour Force Survey from the Office for National Statistics suggest the number of these workers soared from 29,743 to 300,201 between 1992 and 2014.

In the same period there was also a 580 per cent increase in teaching and educational support assistants, 183 per cent increase in welfare, housing, youth and community workers and a 168 per cent increase in care workers and home carers

At the same time we say a 79 per cent drop in weavers and knitters from 24,009 to 4,961, a 57 per cent drop in typists and a 50 per cent drop in company secretaries.

What is a little more alarming was a 20-fold rise in accountants. The 1871 census records that there were only 9,832 accountants in England and Wales and that has risen twentyfold in the last 140 years to 215,678.

In some sectors – including medicine, education and professional services – technology has raised productivity and employment has risen at the same time, says the report.

“Easy access to information and the accelerating pace of communication have revolutionised most knowledge-based industries,” say the authors. At the same time, rising incomes have raised demand for professional services.

Technological progress has cut the prices of essentials, such as food, and the price of bigger household items such as TVs and kitchen appliances. The real price of cars in the UK has halved in the last 25 years, notes Stewart.

That leaves more money to spend on leisure, and creates new demand and new jobs, perhaps explaining the big rise in bar staff, he adds.

“Despite the decline in the traditional pub, census data shows that the number of people employed in bars rose fourfold between 1951 and 2011,” the report says.

‘Rising incomes have enabled consumers to spend more on personal services, such as grooming,’ says the report.

So while in 1871, there was one hairdresser or barber for every 1,793 citizens of England and Wales; today there is one for every 287 people.