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Dossier 20/12/2015

When digitisation attacks the middle classes

"Automation could be to white-collar workers what globalisation was to blue-collar workers.” While an increasing number of studies are working to identify the jobs which are most threatened by automation, several believe that the middle classes could be the most affected.

Upon its release in 2014, the study issued by the Roland Berger firm caused alarm in France. Its conclusions are indeed dramatic: with advances in IT and robotics, 42% of French jobs are highly likely to be automated. Jobs which include routine and repetitive tasks are not the only ones that are threatened, and professional jobs are not necessarily protected as previously thought: "Technological progress blurs the boundary between jobs which can be automated and those which we previously thought were safe" concludes the study.

This initial discovery is going to challenge our preconceptions: low-skilled jobs do not necessarily involve routine and repetitive tasks. This is demonstrated by two researchers who inspired the Berger firm, Carl Benedikt and Michael Osborne, who explain: unlike a call centre worker, a housekeeper carries out a series of different cleaning tasks. We would need a very complex robot or a series of robots to complete the same work. Even more surprising is that these two economists note that high-level reasoning is easier to reproduce than human sensorimotor skills (such as dexterity): "A chess game is easier to code than the act of breaking an egg on the side of a bowl." Hairdressers, chefs and gardeners still have a bright future.

Polarisation of the economy


This discovery led to another: repetitive and routine tasks are not necessarily low-skilled jobs, but intermediate jobs. With technological progress, the growth of the tertiary sector that accompanied the development of services is threatened. "Over time, computers will be able carry out any tasks which can be addressed with logical reasoning or a statistical model” summarise Frank Levy and Richard Murnane in their book Dancing with Robots. Insurance brokers or accountants are jobs which are specifically targeted, as well as estate agents, secretaries, pilots and other drivers, and medical staff.

This theory is in line with the thesis from the MIT economist David Autor: polarisation of the economy. By breaking down American jobs into three levels, he demonstrates that low-skilled jobs, which he classifies as level three (personal services and catering work), experienced two-figure growth between 1999 and 2007 in the USA, whilst level two jobs, which are in the middle of the social hierarchy (administrative work and skilled labourers) have fallen. The latter only represents 45% of jobs in 2012, against 60% in 1970. His conclusion is quite radical: with technological progress, it is not the demand for low-skilled jobs which is falling, but for intermediate jobs, which are likely to become automated. According to Anna Sabadagh's report, empirical studies on the UK, USA and EU are all in line with this assessment.

The end of Silicon Valley ideology?


These two discoveries would not be so worrying if these widespread destructions allowed the middle classes to access higher-skilled jobs (level one, according to Autor). But this would not be the case, quite the opposite. Three economists from the University of British Columbia - Paul Beaudry, David Green and Ben Sand - all note that there is a general pressure on employability and a trend towards deskilling.

The jobs of tomorrow will not use the same people or same qualifications. For the time being, due to a lack of adapted skills, the unemployed middle classes move towards lower-skilled jobs, leading to stagnation in the payment of these positions. However at the same time, wages for these lower-skilled jobs are going down: in 2011, the median American salary was 10% lower and the following year, 10% of the population took home half of the country's income. Better education is needed to meet the need for these skills, so that the unemployed can exploit these new technologies and create their own job - this is one of the only proposals which economists can agree on.

The traditional social model turned upside down


This rise in inequality since the 2000s is noted by several economists, including the winner of the Nobel Prize in Economics, Paul Krugman. Whilst productivity is reaching new heights, new technologies are neutralising the value-sharing mechanism. One of this challenges with this new revolution is therefore to determine how productivity gains generated by companies will be shared, particularly amongst shareholders and workers, but also amongst higher or lower-skilled workers.

"Automation threatens the skilled and well-paid jobs which are the backbone of the middle classes. This could destabilise core companies in developed countries" warns Berger. A survey carried out by the Pew Research Center shows that 48% of economists that they surveyed worry that these imbalances could lead to disorder, social issues and the creation of a permanent unemployable "underclass". What is the best scenario to avoid disastrous consequences? Top-down adaptation, suggests the Berger Institute, in line with other researchers such as MIT economists Erik Brynjolfsson and Andrew McAfee: investing in digital infrastructures, supporting research and development, rethinking social protection or even developing major business clusters to fight internationally.


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