Exponential increases in automation, computerization and digitization is having a profound impact on many people’s jobs. Branko Milanovic’s recent work on global inequality has shown extent to which the lower-middle class jobs in developed countries are being replaced by technology. In particular, economists argue that middle-skilled, routine-intensive jobs are being hollowed-out. And indeed, in Western European countries and the US there has been a decrease in the intensity of routine tasks – both manual and cognitive. However, in Central and Eastern European (CEE) countries, the amount of routine cognitive work has been on the rise. And the pay for these workers has increased faster than for high skilled workers. Why is this happening, when in the most advanced economies the opposite is happening?
There is strong evidence that suggests that the South African tourism industry can help create a large number of secure, inclusive jobs. Despite the global financial crisis and a sector which competes on a global level, it created 48,000 jobs since 2008. Furthermore, many of these jobs are low-skilled, located in towns where there is not much other economic activity and have a higher-than-average representation of women and the youth. In addition, there are also opportunities for employees to increase their skills and their wages, so they do not remain in a low-wage, low productivity wage cycle permanently.
Monami Dasgupta, guest blogger, is a Research Analyst at IFMR Finance Foundation
Some people are self-employed in the informal sector because they want to avoid registration and taxation. But many people work in the informal sector through necessity, not choice. Today, there are two features of the informal sector that are well-recognized. Firstly, much of the informal economy contributes greatly to the formal economy. Secondly, women constitute the majority of precarious, under-paid, informal workers.
Robots are just one of the latest stages of technological progress. The number of robots being used by businesses to boost productivity has increased rapidly in recent years. And there is no reason to believe that this pace of robotization will begin to slow any time soon.