The coming labour scarcity will shift the balance of power, pushing up wages

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11882915/Deflation-supercyle-is-over-as-world-runs-out-of-workers.html

by andrebalza1 • 11 years ago

30 56 11 years ago

telegraph.co.uk

SixSigma6• 11 years ago

And the home secretary is going to say today that immigration is bad for the economy !

In my sector, Supply Chain Management, we are facing a skills shortage.

* Warehouse operatives are moving from many low skilled pickers to a few skilled robot sitters and the latter are in short supply.

* Procurement - moving from the soft skills of buying person to person over the phone to electronic exchange and online bidding - again a skills shortage is looming for the non-managerial staff.

* Driving - HGV is facing a short supply as the retiring workfoce is not being replaced by young people and more demand for last mile drivers for the shift to single package delivery.

* Supply chain managers - a relatively new title and one that few young people consider. The Novus Trust in the UK is promoting the career path in a hope to encourage new entrants.

spacecowboy_lon3• 11 years ago

Ah the old story Industry doesn't want to pay for training

SixSigma6• 11 years ago

Industry is willing to pay but individual companies are not, especially in the days of "job for 5 years".

For instance The NOVUS Trust [1] is a Supply Chain / Logistics undergraduate scheme that guarantees a job for those graduating with a 2:1 or over that is sponsored by industry members.

[1] http://www.novus.uk.com/

gregjwild2• 11 years ago

Interestingly, there is pressure on both sides there - greater automation means that new skills are needed for the few jobs left, but the fact you're talking about training a handful, rather than training at scale makes for more expensive training per head.

spacecowboy_lon3• 11 years ago

Well Amazon still has a large number of bodies I live near the UK's big warehouse and overheard some interesting gossip about that.

Basically the rumor is that Amazon might have similar problems to Ford did in the UK where Junior supervisors are playing favorites

VLM• 11 years ago

One observation is they're just not paying enough. Oddly enough, if you're willing to drop $150K there is no shortage of software developers worldwide. People can dehydrate themselves crying in their beer over there being no truck drivers at $20K/yr, but once they offer more than $30K/yr, people will start to line up. For the last couple generations this has been a dog whistle for immigration or H1B style indentured slavery; "We can't find anyone (for $7.25/hr) so we'll have to import".

Another observation is some of your jobs are extremely temporary, like becoming a cable TV installation technician, once the metropolis is wired up in the mid 80s, 99.999% of them are permanently unemployed. So you're going to have to offer fat stacks of cash to drive a truck until permanently replaced by an automated truck in a couple years or have this years flavor of the month of robot certified system engineer cert holders or whatever, because in five or ten years they'll be permanently unemployable or at absolute best case be unemployed and retraining. You can't expect to pay people a low career level wage for an extremely short term job.

A final observation is for real long term careers you've listed, when business people say there's a skill shortage, they rarely mean a shortage of people with skills, because the skills are often pretty widespread and trivial, but a shortage of business people and HR personnel who can CYA on hiring decisions via authority like diplomas and govt licenses, or an established hierarchy like "top 100 biz/med/legal school lists". None of those skills listed are weird or rare in your average human population; you're not asking for research grade theoretical physicists; every house that has a roll of toilet paper in the toilet paper holder has some human who at least vaguely understood logistics; you only need to hire the top 0.001% of that enormous proven skilled population. Its just if you make a mistake in the hiring process you can't act all blameless because he had a MBA from Harvard so I'm not responsible for hiring the wrong guy, or he had a license from the state bureau claiming he was qualified, or he held journeyman papers. Or in summary, its a management CYA behavior problem not a real workforce skill problem.

SixSigma6• 11 years ago

You can't just up wage offers and see results. HGV driving already pays good wages here - upwards of $750 p/w and it costs something like $1500 to get qualified.

Even if you only work for a year, you will recoup your investment so I don't think it can possibly be people thinking that "I'm not going to be an HGV driver because robots will take my job, I shall stay here in McDonald's on minimum wage"

So it can't be a purely wage issue that keeps millions of people in low pay / unemployment and not behind an HGV steering wheel.

SideburnsOfDoom5• 11 years ago

A newspaper which is pro the right-of-center government, pro big business says that there is no need to reign in big business; because despite their winning streak over the last few decades and the mounting criticism of mounting inequality, things are going to turn against them any day now, honest!

Film at 11.

RobertoG3• 11 years ago

I think the important message is more general: "don't worry because markets equilibrium will solve all the problems. Don't look too hard to the last 30 years, it was not a policy problem, it was just a demographic anomaly. Our theories are good and worked perfectly."

What surprise me is that they use the capital vs. workers narrative.

gregjwild2• 11 years ago

The right wing press just loves to fain Marx when it suits their own narrative.

That said, I often wish the mainstream left would diversify their own font of knowledge. Especially given most don't read him.

dandare2• 11 years ago

Politics aside, unless you challenge the data it was an demographic anomaly. Do you think it had no effect on the markets?

gadders4• 11 years ago

The mounting criticism of mounting inequality is a political position. It's not an objective statement of fact. They are free to ignore it if they disagree with it.

SideburnsOfDoom5• 11 years ago

The mounting criticism of mounting inequality is a political position. It's not an objective statement of fact.

The mounting inequality itself is however not just an opinion.

They are free to ignore the mounting criticism

But they're not ignoring it as such, and IMHO it's gotten to the point where it would be foolish to do so. So now they're supplying an alternative political position on what to do - i.e. don't worry, markets will sort everything out.

mschuster915• 11 years ago

This might be true for high-skilled jobs, yes.

But the vast armies of uneducated, second-or-third-generation-jobless people will have their jobs slaughtered by automation. Truck/cab/freight delivery will be automated, freight handling and shipping will be automated, cleaning of public and private areas will be automated.

The only field I can see which will depend on low-skilled worker armies is construction.

And with the refugee crisis we just magnify the problem because the refugees will have to be integrated, they have to learn German and still lots of them will be lower educated than the rest :/

SideburnsOfDoom5• 11 years ago

The only field I can see which will depend on low-skilled worker armies is construction.

I don't think that the construction industry will be immune to automation. Google up "house build robot" or "construction robotics" to see what's already being done.

SixSigma6• 11 years ago

Truck drivers are in short supply. There is also a trend in mainand Europe to schedule more freight into the hinterland from ports on trains and waterways - so called Synchromodal Transport [1]

The new APM automated continer port in Rotterdam [2] is set to handle 4m containers per year using automated vehicles and cranes - with few operators on the dockside (just for the two train cranes and one barge crane) - the other 8 cranes are operated by remote control.

[1] http://www.dinalog.nl/en/themes/synchromodal_transport/

[2] https://www.youtube.com/watch?v=cHVF6xEjArA

iofj2• 11 years ago

Luckily they're on it :

http://www.dailymail.co.uk/news/article-3258829/Driverless-t...

Everybody's missing the really bad thing about these trucks and self-driving cars though. Everything is patent encumbered. So they will transform a bottom up industry (dependant on people to drive the trucks, trucks which can be produced by any of a 1000 companies) into a top-down patent-encumbered capital-intensive industry (because only one company will get self-driving cars thanks to our patent system). There will be one company driving these trucks, not many like today.

This will destroy truck drivers, yes, absolutely. However something it will also do is sink every KMO that has trucks driving, which is a a lot of them here in Germany.

So give it another 10 years and "oh no hell no to self driving trucks/cars" will be one of the few things socialists and capitalists/liberalists agree on, because it will destroy the constituency of both parties. I also seriously doubt they can reliably deliver cargo in the central streets of Germany's cities. The ones built in the 14th century which are about wide enough for a single horse carriage (very tight for a car, and truck drivers actually manage to squeeze in (you -often- have to forgive some damage of course))

dougabug• 11 years ago

As automation continues to improve, we see that fewer and fewer people are sufficiently skilled that they cannot be replaced at least in part by technology. Even tasks demanding high cognitive abilities gradually shift into the domain of what advanced machines can do. I wonder what kind of leverage average software engineers will have when machines can write better code than an average programmer? Or allow one developer to do the work currently requiring a hundred.

And how can there be a labor scarcity when productivity has risen to levels where we can overproduce almost everything we can think of, far outstripping our natural resources?

chipsy• 11 years ago

A lot of our inability to automate comes down to not being able to operate at a big enough scope. For example, all commuter transportation problems are ultimately caused by having too many people, too distant from one another. But we can't simply move them closer together for a variety of reasons, and so we have to think about trip planning instead. But we could also reduce the need to make trips and reduce the average length of each trip.

The future is going to be full of complicated thoughts like this - problems to which automation can solve some things but policy and design solves others. We'll have to be really good philosophers to avoid catastrophic error.

creshal2• 11 years ago

And with the refugee crisis we just magnify the problem because the refugees will have to be integrated, they have to learn German and still lots of them will be lower educated than the rest :/

The EU already has 23 million unemployed (and a lot more in minimum-wage bullshit jobs nobody wants or needs), a million refugees won't make problems significantly worse than they already are.

mschuster915• 11 years ago

a million refugees won't make problems significantly worse than they already are.

Oh yes, they already do. The housing market in German cities is already fucked up beyond limits because our politicians have slept for years, and 1.5m refugees now needing winter-resistant housing (so, no tents) bring the market to its knees.

But I'm thankful for the refugees, because they show our politicians they can't sleep forever.

dazc2• 11 years ago

"The only field I can see which will depend on low-skilled worker armies is construction."

The trend in construction for the past decade has been towards less labour intensity.

So no good news here either.

iofj2• 11 years ago

Construction is already beyond the big wins in labor force though. Construction sites used to have armies of workers. Hundreds. Now they have perhaps a dozen for large skyscrapers, 5 for normal skyscrapers and one or two for houses.

sageikosa• 11 years ago

You are missing service industries in general and elder care (poignantly relevant with the article's emphasis on demographic shift) specifically. A large older population with a smaller worker pool to draw on will drive up demand for caregivers, exhausting the rapidly devaluing savings of the elder generations.

kpil• 11 years ago

Most people would prefer being wiped in the ass by a robot.

There are really strong incentives for automation in healthcare.

When talking about the immigrants and refugees working with elders; Unfortunately, even the "human touch" and the social part of the job is sometimes problematic because of cultural and language barriers... (Also applies to the opposite situation, elder immigrants receiving care.)

drewm1980• 11 years ago

I didn't get why the savings are supposed to devalue. The elder care costs for the super-rich is a drop in the bucket for them, and they can and will still use the rest of their wealth to pay poorer people (and robots) to generate them more wealth.

kartan• 11 years ago

When the article talks about Piketty it says that he makes "sweeping neo-Marxist claims". While at the same time tries to justify Professor Goodhart bold statements telling us that he uses "large assumptions".

Awful article that shows from beginning to end its bias with a wishful thinking justification of letting big-business reign over the rest of society.

lmm• 11 years ago

So what are Japan's special circumstances? The theory makes sense, but when our one real-world example shows the exact opposite, I'm inclined to be skeptical.

dandare2• 11 years ago

Japan does not exist in a vacuum.

mindcrash• 11 years ago

As if the labour scarcity will not be dealt with using completely new working class as a replacement.

http://www.cgpgrey.com/blog/humans-need-not-apply is a real eye opener.

redwood3• 11 years ago

With hardly a mention of automation. ..

JupiterMoon5• 11 years ago

Automation (at the moment) requires a skilled workforce to e.g. build or program the automated system.

redwood3• 11 years ago

Orders of magnitude fewer workers though...

The coming labour scarcity will shift the balance of power, pushing up wages

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