Decoupling growth and jobs

Decoupling growth and jobs

At two events this week I have found myself speaking about jobs and automation. The people I have spoken to seem largely to be coming to the same conclusions: technology will drive productivity and increase net wealth, but it will also diminish the number of jobs available and increase the gap between rich and poor.

Not everyone reaches these conclusions. They’re still convinced that the next wave of technological investment will create more jobs than it destroys — as previous waves of change have. But the signs are not good for this view — like this article about state-funded investment in automation from China. Here, one factory cut its workforce by 80% and raised productivity by 60%.

Distinct paths

I think we have to start to accept that jobs growth and economic growth are perhaps no longer as tightly tied together as they once may have been. Translating new wealth into work for the many rather than the few, may require rather more active interventions than it has in the past.

This is the sort of talk that scares large corporations. It sounds like increased taxation. And in reality, this is likely unavoidable.

But it isn’t just about taxation. Only by thinking about these two problems distinctly are we likely to find real solutions. Any economic stimulus that only drives growth may well drive faster job losses, or as we are seeing at the moment, maintained wage suppression.

We have to be much more thoughtful and creative about what people will do. What industries can we nurture that will continue to engage people, as well as creating wealth? And how we engage those outside those industries in work that fulfils them and is valued by society?

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Tom Cheesewright