Automation set to replace a third of Australian jobs warns OECD

The Organisation for Economic Co-operation and Development (OECD) has fired a shot at Australian businesses and workers with claims that over a third of jobs are at risk of being lost due to automation.

However, the OECD tempered its warning by adding that despite widespread anxiety about job destruction driven by technological change and globalisation, a “sharp decline in overall employment is unlikely”.

In an employment outlook report titled The Future of Work, the OECD said that although Australia ranks relatively well in comparison to other countries and remains below the OECD average, the oncoming shift towards mechanisation and automating existing working processes means that a sizeable share of adults will need to “upskill or retrain” to meet the needs of future jobs.

More worryingly still, the OECD said that 14% of all jobs could disappear altogether in 15 years.

This forewarning is particularly troublesome, as the report notes that around a quarter of Australian workers are classified as “casual” – working between 1-19 hours per week – with only half having guaranteed hours that tend to improve job security.

Automation takeaways

One of the key takeaways from the report is the daunting situation for individuals without higher education diplomas.

“The labour market experiences of many young people and of those with less than tertiary education have worsened over the past decade.”

School leavers without higher education have been “most affected” while “women are particularly at risk”, with more women being under-employed, non-employed or receiving low pay.

From a historical perspective, the report points a damning finger at the fallout from the Global Financial Crisis (GFC) in 2007-2009.

Despite Australia largely avoiding the effects of the sub-prime mortgage crisis and the consequent financial market fallout, the land down under has experienced one of the largest increases in under-employment across OECD countries since the GFC.

The report went on to conclude that from all of the surveyed countries, Australian youth with medium to high-level education were one of the groups most likely to obtain low-paid employment since 2006.

Training for better outcomes

As one of the most important ways to combat the onset of mechanisation, the OECD urges its member countries to adopt wide-scale re-training and skills programs to assist in the transition from analogue to automated work regimes.

The conclusions by the OECD coincide with recently published Australian Federal Government job vacancy figures showing a dramatic decline in ads for less-educated workers, while there has been a significant increase in demand for staff with university degrees.

According to the OECD, adult learning is becoming increasingly important to help individuals maintain and upgrade their skills throughout their working lives, “yet most adult learning systems are ill-equipped for this challenge”.

“40% of adults train in a given year on average across the OECD, but those who need training the most, including non-standard workers, train the least and training is not always of good quality,” the report stated.

Meanwhile, Australian policymakers are also keen to introduce measures to soften the blow of automation (while picking up votes in upcoming elections).

Labor leader Bill Shorten proposed laws allowing casuals to request permanent jobs after 12 months with the same company. Workers could potentially be given the legal right to challenge an employer that “refuses unreasonably” to provide a permanent position.

According to the Labor party, there are currently 2.6 million casual workers in Australia with more than 50% staying with their employer for more than a year and almost 200,000 for more than 10 years. If approved, the plans could add several hundred thousand jobs to Australian employment statistics.

Furthermore, the Labor party has also vowed to introduce a rise in the minimum wage, although such plans have met both vocal support and hostile opposition from pro-business groups.

The measures, if introduced, would add significant costs to businesses, resulting ironically in them vowing to further automate tasks within the business, as seen with supermarkets and companies like McDonald’s opting to replace workers with automated checkouts.

Worrying signs from Amazon

With automation on an unstoppable upward trajectory, there are some worrying signs for workers in an automated and mechanised future – especially those at Amazon, with the US giant recently launching its new Melbourne warehouse last year.

Amazon Australia employs more than 1,500 people via its warehouses in Sydney and Melbourne as well as web services positions. An investigation earlier this year at Amazon’s first Australian warehouse in Melbourne’s Dandenong South found that the retailer’s obsession with quality and efficiency made workers feel “overworked” and “dehumanised”.

Now Amazon has developed an automated system that can terminate employees with the use of algorithms, over 300 which have already been fired using the method.

The company has reportedly launched a system that can track its workers’ productivity in real-time via movement sensors, detecting production targets and even monitoring the length of breaks its employees take.

If the system determines the employee is failing to meet production targets, it can automatically issue warnings and terminate them without a supervisor’s intervention, although Amazon has countered these claims by saying that a human supervisor always has the opportunity to override the automated system.