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Economics Gazette

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September 21, 2019

Industry automation will affect the lowest paid jobs

Industry automationThe automation of the workflow will not negatively affect the economy, but will lead to the dropping down of some lower-skilled jobs, and only skilled workers will get better wages, according to the British Institute for Public Policies Research (IPPR). However, if robotizing starts to increase wage inequality, the state needs to intervene.

The Institute for Public Policies Research points out that automation in the UK could increase economic productivity growth by between 0.8% and 1.4% on an annual basis, as well as boosting gross domestic product by 10% by 2030.

However, this growth may not be evenly distributed as lower paid jobs have five times greater “technical potential” to be automated than those with higher wages.

According to data, the sector with the highest risk of robotizing in the UK is that of wholesale and retail, where 65% of jobs can be automated. After that, transport has 63% and production – 58%. At the same time, however, the IPPR points out that workers who can use more sophisticated equipment have the opportunity to increase their wages by expanding the pay gap between them and lower-skilled workers.

The analysis has shown that jobs that have the potential to be automated are given annual salaries totaling 290 billion GBP. Much of these funds will still be spent in the form of wage increases for other jobs, but a significant portion of them will be able to turn into a profit for the state.

The jobs that are most at risk of automation are disproportionately distributed in the poorer parts of the country and are often occupied by women or minority groups. To avoid increasing inequality, the government needs to look for ways to distribute capital and ensure that everyone benefits from increasing automation.

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