Half of Aussie jobs at risk from digital disruption

By Leith van Onselen

KPMG’s Bernard Salt has penned an interesting piece in The Australian today whereby he has estimated that up to half of Australian jobs could be at risk from digitisation:

Whereas 47 per cent of jobs in the US are considered to be at risk from digital disruption, the proportion for Australia is 49 per cent. The capital city range for the proportion of the workforce most at risk extends from 46 per cent in Canberra to 50 per cent in Perth. Public servants are less likely to be displaced by disruption than fly-in fly-out miners, it would seem.

Australian cities most at risk ranges from about 45 per cent in the case of Ocean Grove, Alice Springs, Torquay and Gisborne to about 59 per cent at Kurri Kurri, Murray Bridge, Cessnock and Melton. Towns most at risk from digital disruption are dominated by mining and agriculture activities or are blue-collar commuter towns where there is a poorly ­developed local job market…

Suburbs where most of the workforce is expected to be subjected to digital disruption include Crace, Bonner and Casey on the newer edges of Canberra, Broadbeach Waters on the Gold Coast, carmaking Elizabeth in Adelaide, Kings Meadows outside Launceston, Taylors Lakes in Melbourne, Tuggerah on the Central Coast and Hillarys in Perth.

These communities are dominated by low-level white-collar and some blue-collar jobs that are deemed replaceable by artificial intelligence, digital connectivity and automation…

What can communities, governments and workers do now to mitigate the risk and the impacts of change?

Bernard Salt has clearly been giving this issue a lot of thought because last year he also warned that technological change could mean there will too few jobs to go around in the future:

What would be the impact on Australia, and the US, of a shift to knowledge work? Could the US leverage equal if not better economic output from a workforce of, say, 140 million instead of 164 million? And the same for Australia. What if by 2030 we don’t need 12 million workers; we needed only nine million? In such a world work retreats to knowledge enclaves such as Silicon Valley or to the privileged infrastructure-rich centres of Australia’s biggest cities.

How do we organise a society in which not everyone works yet where the number in the prime of their lives continues to expand?..

The question here and in the US will be the political ramifications from the development of a society where work and work-based remuneration may well be a scarce resource amid an expanding working-age population.

Given that Salt now believes that there could be too few jobs to go around in the future, does this mean that he is no longer a self-proclaimed “unabashed supporter of a bigger Australia”? For years Salt has produced reams of articles pushing rapid population growth and warning that to not follow this path would lead to an economic and fiscal catastrophe.

But surely in a nation facing too few jobs, the last thing that policy makers should do is add to labour supply via ongoing high immigration?

[email protected]

Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Comments

  1. If someone can invent a three word slogan churning machine we can displace the entire political class.

    • Not PC – I get it, but go back to single wage families and increase the single wage. Same with SSM persons.

  2. pyjamasbeforechristMEMBER

    All the more reason to tax assets instead of income. If we can do all same productivity with half the workforce than that’s awesome. The redistribution of the wealth it creates is the key to it being awesome though.

  3. We need a universal income law.

    The PM of Finland wants a UBI. So do most people in Switzerland and the Swiss are about to have a referendum on it.

    The opposition leader of NZ is talking about it. So is Ontario in Canada.

    Of course no Aussie MP has said anything about it.

    • the big kahuna!!! i LOVE the idea of a universal income. you get rid of all welfare as everyone gets the same amount. no tax free threshold, the uniform income is effectively your tax refund.

    • flyingfoxMEMBER

      UBI, the worst nightmare of the conservatives and wealthy => Not going to happen easily…

      What will the people do when they have time and don’t need to worry about their next meal?

      • We look back and consider the practice of children labouring in coal mines during the industrial revolution to be barbaric. I wonder if using the threat of starvation to motivate workers will be viewed similarly in the future…

      • Nope, the IPA is not instinctively against UBI.

        Perhaps they are going to ask which % of their donors are against it before saying yes or no.

        Landlords will like it because they could collect rent from the homeless.

        Retailers will like it also.

        And the Tories love to sack public sector workers, so this will allow them to sack a lot of Centrelink staff.

        You could raise the GST to 30% to fund UBI.

  4. Today's Empire Tomorrow's Ashes

    Grew up in Gisborne.

    Commuters to city, local services, farmers….surprising.

    And Torquay?!

    I think this killing the masses’ jobs with machine meme is way overblown.

    • “I think this killing the masses’ with machine meme is way overblown.”

      fixed – this is our robot overlords goal once they finish punishing us at our own games. Beware robots building robots and self-evolving code 🙂

      • Yes, the meme has a distinct vibe of 70’s futurism that had us all going to work in flying cars or in a robot controlled distopia by 1986. It never pans out that way. However, Salt can get a paycheck out of it – I’m just jealous.

        If interested it all seemed to kick off when the Economist covered this study giving probabilities of certain jobs being automated away:

        http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

        ON the other hand, some people who should know seem concerned which is a real worry:

        http://sydney.edu.au/news-opinion/news/2016/03/16/-defenceless-against-artificial-intelligence.html

      • When I was a kid used to watch The Jetsons…a cartoon show about a family of the distant future, perhaps the 21st century.

        Anyway, I recall that George Jetson used to complain about working a two hour day, or something similar, and I’ve always wished that’s how it had panned out for our society. As it is, I’ve spent my life (in private enterprise) working at least 40 hours per week, and nearly always more than that. I’d be happy to work less for less pay, but the company management are pretty conventional and frown on the idea of working less, particularly for senior staff.

      • i think china has already beaten us to the pump (so to speak). there is a retrofitted dairy style milk machine at waist height to releive stress. then again, they have something like 30 million more males 18-30 than women. they’ll need all the robots they can get.

      • There’s another way.

        First, we can guilt them about the way they’ve treated other ethnic groups. Tibetans, Baiyues, etc

        Then we can follow that up by promoting the Arab Muslim world to invade them en masse instead of Europe, bringing into China all sorts of engrossing hi-jinx, such as rape, assault, murder and epidemic theft.

        Historically, when a large group of uninvited savages refuse to assist producing the benefits of ones civilisation, and instead exploit those benefits for their own selfishness and laziness…. typically frustrated males, often represented among those 30 million you talk about, tend to find a permanent solution to the problem.

        In the process, that 30 million surplus tends to get culled as well.

      • yep, i’ve been wondering for a while why the migrant stream isn’t heading to or being pushed towards the declining populations of Russia and Japan and the empty houses of China. genetic mix up is healthy! new people make life interesting! why aren’t there Chinese husbands for Western women websites? and Chinese husbands for abandoned Arab and African women? if only people weren’t so fixed in their ways, so many problems could be solved. I’m serious.

    • Whatever you’re selling there, I’m not buying… 😛

      I heard of “convergence of purpose” but a robot which gives you handjobs and flatwhites … ehh, I’ll pass on that!

      • Yeah. You’d really want to have mechanical interlocks in place on that device to ensure that the two activities never combined in any way, otherwise that flat white could end up as a fairly unattractive proposition.

      • Imagine the hacking possibilities, I hate to even contemplate what happens in a buffer overflow fail. As for heap management I’m left wondering what kinda task handshake protocol they’d have to use, I suspect they involve semaphores with builtin DetTol wet wipes. As for viruses it brings new meaning to the phrase: I think my machine is infected.

  5. The time scale for this is over 10 years.
    So if we generate a chart showing unemployment at say 6%
    and overlay on that say a redundancy from AI at say 4% pa compound,
    You’re going to have an interesting chart., Unemployment next year at 10%, year after say 16% ??
    Turnbullshit knows this hence the early election call.
    The Libs must be voted back in, “they deserve it” there you go a
    3 word slogan.

  6. finally it looks like 20h week may become a norm and people actually may regain some of the life back. Even if people get paid half, they would be able to save so much they are spending now on stuff and services they need because they have no free time (daycare, takeaway food, cleaning, repairs, gardening, transportation, … )

    • Was talking to a guy yesterday (plain clothes) who had a beagle dog. He said, mate, these dogs can smell 200,000 times better than a human, I said what are you up to, he said just keeping him trained to smell certain smells, drugs, [another police man handler had placed drugs in the ground the day before],
      HE said if we dont keep the dogs on the scent every day, they lose interest. their noses will pick up on something else. In a week they will have forgotten this smell and honed into something else. Its vital these mutts work 7 days a week.
      Humans are the same.

      • Yes, and I think in a competitive society we will never work a lot less hours as most people will always want to “get ahead” so they will work doing something & others will have till follow or else they will be left behind. Only threat to that is if we all change our attitudes and get on the hippy vibe or robots are as cheap as PC’s (very likely in my opinion)

      • @Zulu I reckon this is exactly why we don’t have the 14 hour work week. It is our revealed preference to exchange leisure time for work in exchange for gadgets. Competition is in our social nature and we must strive to have more gadgets than the other members of the immediate social cohort. Solution: get yourself some new friends with lower expectations and enjoy the free time it unlocks! After all, how many in Australia would starve if they chose to only work 14 hours a week?

      • I don’t think you understand this issue. When mandatory working week was reduced from 60+ hours to 40 people were used to be the same, actually people’s real needs and aspirations were bigger back than than now (now we need money for a marginally no-life-changing improvements in gadgets, back then they needed money to buy life changing stuff like washing machines, cars, …) and yet what you say didn’t happen. Majority started working less. They didn’t choose to work longer for more money.

        My point is that mandatory hours that an employer can demand should be reduced, not maximum hours someone is allowed to work. If someone wants to work more can do two jobs or double work for double wage. None has problem with that.
        You have no idea how many people (mostly white collar employees) would like to work less but are not able because there are no part time jobs around.

  7. “What can communities, governments and workers do now to mitigate the risk and the impacts of change?”

    Brace for impact!

  8. “Given that Salt now believes that there could be too few jobs to go around in the future, does this mean that he is no longer a self-proclaimed “unabashed supporter of a bigger Australia”?

    Not likely – he just had to fill another column. There’s only so much to write about when you are basically bullshitting about stuff people already know.

    Just another self-appointed guru.

  9. Scoff all you like Robotics is coming along at an absolutely amazing pace, and amazing is a strong word for techno skeptic like me. I thought I’d seen it all before but nothing prepared me for the level of integration of bots that I saw when I visited a Foxconn factory late last year.
    Factory Automation is no longer simply about robotics to do the desired point function rather it’s about the integration of hundreds of disparate bots into a functioning factory framework. What impressed me most was the semi autonomous heuristics underlying the on-the-fly reassignment of product from one production line to another. I also got a demo of some simulated point fails in the system whereby the faulty section was automatically excluded from the flow yet nothing seemed to even slow down….very impressive fault tolerant factory flow.
    These bot functions are getting real cheap real quick, so Australians need to appreciate the importance of this inflection point and decide how to leverage the disruptive force that robotics creates.

    • “These bot functions are getting real cheap real quick, so Australians need to appreciate the importance of this inflection point and decide how to leverage the disruptive force that robotics creates.”

      Easy, buy the bots and you reclaim what labour arbitrage costs you.

      With 3D printers and bots, there isn’t going to be such as thing as export of material items.

      Pick a factory in the desert (free land), let the bots build, and have a driverless train freight it to your markets nearby. How are boats going to compete with that? Filipino girls on board?

      UBI is what we are going to have to spend a great deal of time to ponder. No one is going to buy the stuff your robots make, if they can’t afford it.

    • I think the dramas start when imputing values is when mortality or injury are ascribed… $$$$$ – property – ????….

      Skippy…. will the programmers be sane – ????

    • CB, I’m on your side, but things are going to get real ugly real fast.
      Foxconn has been involved in several controversies. There has been a history of suicides at its factories blamed on working conditions. In January 2012, about 150 Foxconn employees threatened to commit mass-suicide in protest at their working conditions.
      My call is, in the next 2 years the effects of a negative to collapsing housing market and the apprehension about work- lifestyle is going to cause upset.
      We have had a UH1 flying around here over the last couple of days looking for the wreckage of that Qantas pilot who speared in John Denver style 2 days ago.(in a Lismore Aero club C152) Reminds me of the old days. Man that sound goes right through you, at the time we didnt know but looking back, it was an iconic beat.

      • I think John finally succumbed to Steve Martin’s endless ribbing or not getting invited to his cool party’s….

    • Visited the Hublot watch factory outside Geneva, guess about 500 personnel i.e. SME+, the whole complex seemed more like an open plan office. The operation nearest to traditional manufacturing was using laser based tools to craft ceramic, carbon fibre etc. watch parts via computer terminal, operated by workers.

      However, these particular workers would have had at least a TAFE Advanced Diploma in technology manufacturing or the like i.e. maths/science skills, while watchmakers have similar or Associate Degree in applied science.

      Similar industry in Oz, i.e. high tech and high skilled, would be biotech e.g. production of vaccines and related medical technology such as CSL, i.e. not’s a bunch of blokes with tools in their hands running round in fluorescent vests and hard hats suggesting ‘bush’ mythology……

      Same as many white collar jobs are already out of date already due to ‘digital avoidance’ but remain as management, while new types of positions emerge, any worker must become skilled if they want a chance of a good occupation and career (don’t ever expect anything with leaving school early and no trade).

      It’s not enough, as happens in Oz, where white or blue collar personnel can brag about how little they need to do (or their job is easy & secure & house/Super is worth $x & can retire early) e.g. no need for, or avoiding higher education and training, while other sectors or industries who do, can compete internationally.

  10. Does mean we can move to high frequency immigration approvals and property trading? Obviously the answer to digitisation and unemployment is bring in more people, property investors and property developers, all these people with free time can spend their leisure flipping property.

  11. All this breathless hyperventalating about our robotic overlords and digital disruption. Most IT projects I’ve encountered take an age to be implemented, even longer to be adopted by an organisation, and rarely realise the totality of their projected benefits. I expect machine learning/other automation initiatives will follow similar trajectories.

    Knowledge based work tends to breed large beurocratic support structures which are often larger than the jobs they portend to support. I suspect many of the projected job losses due to automisation will be offset by the need for more ‘bullshit jobs’ – people who’s role is to deal with systems which conflict or don’t communicate, or deal with broken systems, or just do the job that the automation was supposed to do but failed due to variability, or fix problems the automated systems introduce.

    Come to think of it, shit robots could herald the beginning of an employment boom…

    • I tend to agree. I don’t think we will have a shortage of jobs. Maybe a shortage of unskilled labour though.

  12. I have been providing data and information to Mr S in re to automation and I think this stared for him when he viewed the ‘Humans Need Not Apply’ YouTube video that I sent him last year. Other data and links were sent to him on his request after that.

    Is he still a big AU supporter? I am not 100% sure, however I do not he is open to consider the options more than he was in the past as we have discussed the coming dramatic fall in our natural growth, the resistance of an aged Australia to increase our NOM and other issues.