McKinsey: Massive Govt Investment Will Be Needed After Automation Wipes Out Jobs

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Tim Pearce Energy Reporter
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A new report from the international consulting firm McKinsey and Co. says heavy government investment in job training, education and unemployment assistance will be needed to mitigate automation’s costs to labor.

The international workforce must be more dynamic and flexible in transitioning from increasingly automated industries to emerging and expanding ones, according to the study.

As many as 800 million jobs worldwide may be taken over by robots by 2030. That may not mean the total number of jobs available shrink, however.

“Technology adoption can and often does cause significant short-term labor displacement, but history shows that, in the longer run, it creates a multitude of new jobs and unleashes demand for existing ones, more than offsetting the number of jobs it destroys even as it raises labor productivity,” the study says.

Over the past three to four decades manufacturing and assembly jobs have been increasingly automated, while occupations that involve in-person service, such as restaurant and maintenance workers, have expanded.

“Income support and other forms of transition assistance to help displaced workers find gainful employment will be essential,” the study says. “Possible solutions to supplement incomes, such as more comprehensive minimum wage policies, universal basic income, or wage gains tied to productivity, are all being explored.”

McKinsey says that education should be modernized from “19th century notions of teaching and learning” to incorporate more innovative solutions that create specialized instruction for more students.

Apprenticeship programs, rather than university education, should be prioritized to train workers on the job.

“Best practice requires a cultural shift of sorts, one that nudges workers to take a more active role in their own retraining and provides tools for them to be successful,” the study says.

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Tim Pearce