Historical experience is consistent with the idea that even if technology doesn’t reduce the aggregate number of jobs, it certainly does disrupt types of jobs - and lives.
A recent report from the Pathways to Prosperity Commission in the United Kingdom suggests during the industrial revolution working-class labourers experienced a decline in living standards for the first 60 years while the income of the top 5 per cent more than doubled.
Consider the introduction of the washing machine: in 1910 there were 500,000 domestic laundry staff in the US. Within 30 years their number had declined by nearly 90 per cent.
Research from Alpha Beta looks at the impact of technological change on the labour market from two perspectives: the change in jobs across an economy and the change of tasks within specific jobs.
Its key conclusion is these two types of change are negatively correlated; in other words, the more the tasks within a job change to adapt to new technology, the less chance the job itself becomes obsolete.
The wash up
The lesson for domestic laundry staff a century ago is to embrace the washing machine and make it integral to your working life. Trying to wash clothes quicker by hand probably won’t work.
The absence of a measured increase in productivity shouldn’t distract us from the profound impact technology is having on the way economies function.
Whether there are more or less jobs created we will only know in time. What we can be confident about however is there will be very substantial change within the mass of jobs. Many roles will be destroyed; many new roles created.
Richard Yetsenga is chief economist at ANZ
This story is an edited version of a report from ANZ Research You can read the full, illustrated version HERE.