How effective are Australia’s retraining policies in an era when robots and neoliberalism is devouring jobs.

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According to the BBC, the Artificial Intelligence (AI) revolution could lead to around 800 million jobs being lost by 2030. And it’s not as if this is a threat of the far distant future. It’s already here. We have already lost many jobs as part of the AI revolution.

Because of this uncertainty, we are told if we want to remain employable then we must upskill and upgrade.

Unfortunately, there’s one huge problem with this argument: Australians aren’t being provided with proper career guidance. Many Australian graduates are still being loaded up to the eyeballs, with skills and debt—all for fields scheduled for the scrapheap or changes within around a decade. This includes ‘up to 60% of graduates who are studying for jobs that are highly likely to be automated ‘ says Dr Andrew Charlton of AlphaBeta.

A range of industry players has issued warnings about Australia’s lack of AI preparedness. Microsoft’s managing director, Steve Worrall, and Telstra’s executive, Michael Ebeid, have both warned that Australia is unprepared for the AI revolution for the major loss of jobs because of AI.

McKinsey & Company has also warned of large-scale job losses of between 3 and 6 million in the next decade.

Jan Owen, CEO of the Foundation for Young Australians, has also noted that Australian young people arent being prepared for the new world of work. She says ‘new pathways are needed. ‘ Owen’s says: ‘the four most significant factors that can speed up the transition from full-time education to full-time work, including an education that builds enterprise skills, being able to undertake relevant paid work experience, finding paid employment in a sector which is growing and an optimistic mindset.’

Artificial Intelligence Strategist Michael Evans, formerly at QUT, has also sounded the alarm about Australia’s lack of AI preparedness. He’s compiled a comprehensive analysis of Australia’s slow AI progress. He warns:

‘ It should also be clear that Australia requires this AI strategy and shift in prioritisation and thinking immediately, as we are already falling behind and there is no overnight solution. ‘

Michael Evans, Wake Up Australia, Medium

 Evans argues that money was allocated in the 2018 federal budget, for AI, but it’s unclear how this will bring us up to speed. Instead, he says Canberra has ‘hit the snooze button…’ And alarmingly many of our competitors like Canada are already way ahead.

Given the sheer impact that the AI revolution will have on everyone’s jobs, its an important challenge to face. Some news reports have predicted that 40% of jobs face the scrapheap.

However, this job elimination process has started and is shaping the future of many younger and older Australians alike. This process will continue to shape many working lives, particularly in regional areas. These are often lower-income areas, where robotics has already affected jobs. Robotics will also severely hit states like South Australia more than New South Wales.

Historical

In the post-war era, there were fears about automation’s impact on jobs.

Alas, many of these fears were premature. Unemployment was low in the 1960s. By the 1970s, while unemployment started to creep up, the fears about automation remained on the fringes.

But… this time it is different!

Just as the world breathed a sigh of relief, new factors emerged, such as the elite increasingly embracing neoliberalism. Consequently, the global economy’s structure tilted in favour of a wealthy elite who earned their money via outsourcing. Other changes that have tilted the economy in the elites’ favour include:

· De-coupling of productivity and wages: The ‘value of workers labour’ started to decline during the 1970s and has continued to fall, according to Ford in The Rise of the Robots: Technology and the threat of a jobless future.

· Financialisation: Financial services accounts have accumulated a greater amount of national income. Here, the focus is on profit extraction, not on giving people jobs, and on handsomely rewarding CEOs beyond the dreams of avarice. Hence, money sucked out of the economy and hoarded by a wealthy few, says Nicholas Shaxson, author of The Finance Curse: How Global Finance is Making Us All Poorer.

· Demise of social norms: Prior to the 1980s, it wasn’t appropriate to hoard a large slice of the profits. Now, hoarding profits is commonplace.

· Research & development tax deductions and grants incentivised the increased use of robotics and mechanisation.

· Outsourcing: Skilled overseas labour can be employed more cheaply, altering the capital/labour ratio, and resulting in the virtual absence of entry-level jobs. It also means that workers are now competing with an industrial reserve army running into the billions.

· The increased casualisation of workers has resulted in fewer unions and disempowered workers.

· AI has enabled multi-nationals to reposition aspects of service and production within a virtual world, maximising profit by avoiding tax centres, and removing the need for employees altogether. Also according to Martin Ford, author of The Rise of the Robots: Technology and the Threat of Mass Unemployment companies have less need to rehire when business picks upinformation technology advances mean that they can operate without laid-off workers.

There’s nothing to suggest this pace will let up!

The collective impact of these policies has shaped everyones working life. These policies mean there is no steady path from full-time education to work, not even a circuitous route.

For a few decades between the 1940s and the 1990s, things were rosier for people. That the average Western citizen could attain an affluent lifestyle became so compelling, so deeply rooted, it was as though this option had always existed throughout human history.

Workers with a low or relatively low level of education could achieve job security. They didn’t need degrees or diplomas. This was when workplace training received greater respect from job agencies that weren’t Job Service Providers with ties to the training institutes selling those diplomas and degrees.

Workers’ protection came via a global economy that was structured to provide economic security. According to economist Robert Kuttner, this structure included a legislative architecture that sought to protect workplace rights, large proactive regulators, and trade unions.

Contemporary job seekers face a hostile environment tilted in the employers’ favour, with few rights, under-resourced or unconcerned regulators and weakened trade unions. It is also true that workers have much better levels of education, but they have inferior work prospects relative to previous generations.

But…But… this time it is different!

So how do we know that there will be substantial job losses in the automation era?  

‘The job losses today are effecting more and more workers in the white collar services industries and creeping into the middle and higher income brackets.’

says Dr Andrew Charlton of AlphaBeta.

For example, automation is increasingly used in areas like the law. It can answer sometimes ‘seconds to do what used to take a law clerk hours…’, says journalist Mark Willacy.  AI can also undertake document discovery faster than a team of junior lawyers says Chystia Freeland in her book Plutocrats: The Rise of the New Global Super- Rich and the Fall of Everyone Else

Can’t we just retrain?

According to Ellen Ruppel Shell, a professor of science journalism at Boston University, policymakers continue to pretend that we can educate our way out of this crisis by upgrading our skills:

There are several reasons why retraining doesn’t work:

· Training is premised on an expanding economy. Prior to the GFC or the Great Recession, companies normally rehired people when the economy picked up, according to Jerry Selingo. However, increasingly, developments like financialisation mean that companies are making do with less staff and making more money per staff member than prior to the recession. Also, some companies are using automation to replace middle-level staff, says Martin Ford, author of The Rise of the Robots.

· Another common problem is that retraining focuses on the perceived shortcomings of job seekers (lack of skills); it doesn’t focus on employers’ behaviour. It doesn’t ask if they’re hiring.

· This leads to another critical issue. Many programs ignore one fundamental consideration: There’s no point in retraining if graduates can’t get a job. Workers need, at the very least, good graduation prospects to make doing a degree worthwhile.

· Unfortunately, many universities are still training students in degrees that will become obsolete, says Dr Andrew Charlton

· The common misconception is that multiple skills and many income streams will replace secure full-time employment. A crucial problem with casual/contract work is that it lacks stability. Even workers with extensive skills may only pick up crumbs of work in the global gig-economy workplace.

· Training programs are still being run in areas where there is little market demand for that skill set or where older workers predominate.

· Finally, the most powerful indicator that there won’t be enough jobs is that there aren’t enough jobs now!

“ The debate is done, the evidence is in…we’re already at the state, where we don’t have enough jobs… Significant number of [job seekers] have just given up.”

Charles Brass, Futurist, ABC Four Corners.

· How do we know this? Look at both the ABS and Roy Morgan figures. While they use different methodologies, these figures both show a tragic tale of underutilised or excluded labour.

A recent Roy Morgan survey of the Australian labour force in January 2019 showed that around 2 million Australians are either unemployed or underemployed. This presents a real story of pathos, yet as a society, we continue to ignore the mounting cost of ignoring the vulnerable.

In addition, we see politicians rolling out hollow promises of job creation schemes, and indentured slave labour (disguised as populist work fare), yet there is no outrage at the fact that they know schemes are failures. These wrecks, says Ellen Ruppel Shell, are rolled out years after they think everyone has forgotten how badly the last lot ‘crashed and burned‘.

And sadly, a succession of failed retraining policies doesn’t stop politicians from making more hollow promises. One person who knows this better than just about anyone is Gordon Lafer. Lafer authored The Job Training Charade. In the mid-1980s, he worked as an economic policy analyst for the then-mayor of New York, Mayor Ed Koch. Lafer was a believer in job retraining. Then the penny dropped.

So, what changed Lafer’s mind? An executive who spoke to the mayor apparently told the mayor that there were jobs going for $10 per hour, which he couldn’t find staff for. The mayor trumpeted the availability of these jobs. Letters flooded into the mayor’s office from people desperately in search of work.

So, what was the problem? The biggest problem was that these jobs were below the minimum wage. Another problem was that job centres wouldn’t do much to help job seekers secure decent paid work.

And it’s a similar story in 21st-century Australia. The media regularly publishes or broadcasts stories about so-called ‘job snobs’ refusing to apply for jobs. In other words, an employer’s clear inability to recruit staff is always attributed to lazy workers.

A chief culprit at this game is politicians. They love to tell us it’s these so-called ‘job snobs’ that are at fault. The main problem with this narrative is that it just isn’t true. In fact, many employers in regional Australia are well-known to prefer backpackers to locals. Why? Backpackers are cheaper.

Alternatively, politicians resort to other lazy job creation slogans like ‘small business is the engine room of the economy’, according to Professor Richard Holden at the UNSW. However, according to Ellen Ruppel Shell in her book, The Job: Work and Its Future in a Time of Radical Change, there is little evidence to support this claim. In the late 1970s, an MIT academic, David L. Birch, first proposed the idea that small businesses are job creators. Interestingly, over a decade later, he debunked his own theory.

Look at the lies told by politicians about job creation, and it should be clear why the economy is struggling.

What else is causing the economy to splutter? Open the bonnet of the economy and you get not only a sense of how the engine works but just how badly that engine is struggling and spluttering.

So, why is the economy spluttering so badly? Consider the fact that policymakers have reconfigured the economy into a narrow range of sectors. We have services employment, which is low paid. Otherwise, most politicians see us as a quarry or an opportunity to flog expensive real estate.

Some economists, like Alison Pennington at the Australia Institute, argue that the economy has been ‘eroding or white-anting over time…’ Pennington continued:

‘Most Australians work in services work in education, health, etc. what characterises services work is a strong human service labour output…If you have an economy where most of the jobs are in low-wage, particularly low-wage, human intense work, it means that you lose a stable base for innovation, for research and development, for expansion of businesses…’

The economy is spluttering because many people who already have jobs are taking on second or third jobs. The hourly rates of their primary jobs have failed to keep pace with cost-of-living increases, and the number of working hours has also been reduced.

Those on social security are financial write offs after almost 25 years of stalled increases. All Australian’s are bearing bank fees and the costs of privatised utilities, amongst many other things. Once you’ve considered these factors, you get a sense of why the Australian economy is not delivering just and fair employment outcomes. You also grasp why it won’t do so.

All Australians are well-aware that the labour market templates ruptured years ago. Instead, we seem impervious to change in the wider economy, unless perhaps we fear a deterioration in personal circumstances.

Nevertheless, we’d prefer to remain living in a dated bubble world. In this world, our prospects remain robust despite evidence to the contrary. In our world, our prospects (if we’re employed) are good because we made all the right choices and worked hard. We say to ourselves, we aren’t work-shy bludgers scrounging off the taxpayer dollar (social security is funded via consolidated revenue, not income tax).

We continually discount the hand that fate may offer us. We forget that we all need Lady Luck sometimes.

Professor Amy Wrzesniewski summed up this cognitive dissonance so eloquently in her collection of essays,Habits of the Heart (cited in Ellen Ruppell Shell):.

‘[U]nderlying our anxiety is the realisation that for most Americans, growth of the global economy no longer means opportunity, downsizing, re-engineering jobs and the pink slip of dismissal. Yet through all these wrenching threats to prosperity, there has been curiously little public protest about the changing rules of the economic game’.

No more buts!

Australia should start retraining workers before they lose their existing jobs.

The retraining story is similar here in Australia. Considering the level of change over the course of the 1990s and beyond, there was little in the way of genuine critical analysis concerning retraining. Instead, Australia, especially post’90s, consumed marketing about career options dressed up as labour market forecasting.

For instance, they frequently tell us that Australians need to train more and improve their skills for in-demand areas. This advice is true, but Australia doesn’t offer a pathway for the employed or for those who are unemployed. Many Australians are employed in jobs that require long working hours, which precludes retraining in another field.

For instance, let’s consider the prospects for truckers. Loads of jobs for truckers will be automated, yet the prospects for truckers who want to transition are poor. It isn’t only because they are working long hours that they cannot transition to fields like big data, robotics, or STEM.

Furthermore, the jobs market has never been more ferociously competitive. Employees are not only competing with one another but also with a global army of skilled workers.

There are other factors. For example, they may lack confidence in their learning abilities or, if they are like many people, they don’t feel confident with numbers. And they require a solid grasp of Maths to code.

Even if they embark on university studies, there are many opportunities to get distracted. Lack of money, competing pressures, extensive commuting times, or even circadian rhythms can make juggling work and study difficult. And according to ABC, the statistics show that many university dropouts occur in courses where there are many mature-aged students.

Pursuing further education through nascent ecosystems, like online MOOCs assists those with significant material resources, not stressed career changers.

There are other reasons you can’t ‘educate your way out of the problem’, according to Ellen Shell who was interviewed on Recode decode. How do they know that the jobs will be available at the end of their retraining journey? According to Ellen Ruppel Shell, a journalism academic, some jobs identified as most under threat from AI in the US are middle-level jobs. These are the professional jobs that universities prepared graduates for.

At the same time, AI will leave in place some lower-level jobs, like burgerflipping, where it’s cheaper to employ a human.

There are more reasons why the pathway is difficult. Just look at the statistics for graduates in the US and the UK. Many STEM graduates ‘can’t secure employment in their field’, says Tom Ford, author of The Rise of the Robots: Technology and the Threat of Mass Unemployment. This difficulty may be partly because lots of jobs for coders have been outsourced overseas.

It’s a similar story here in Australia, despite the rosy statistics that show many graduates secure work, such statistics are based on a self-selecting sample population, an approach that is well known to distort statistical outcomes.

Furthermore, the path of a trucker retraining would be made difficult by lack of internships. Sadly, without both the degree and work experience, prospects are poor.

The situation quickly evolves into job polarisation, where workers are locked out of better-paid employment by their inability to secure a graduate-level position. That undermines the whole basis for retraining.

According to Union Learn, data from the UK shows that it is better to train people while they are still working. Because of the long hours that truckers work, this would be difficult to do. Australia should change industrial laws to introduce a four-day workweek, which would allow workers to retrain.

The reality is Australia does a very ‘poor’job transitioning workers to other jobs, according to the economists Dr Andrew Charlton and Dr Jim Chalmers.

This leads us to a grim truth: some displaced workers will never be re-engaged in new occupations. The current crop of policymakers must accept this reality. That’s why we need to adopt a Guaranteed Basic Income and not a Universal Basic Income.

Conclusion

It’s time for voters to demand radical reform to Australia’s failed education and training agenda. The AI revolution is not some distant event – it’s here now.  Sadly, Australia’s preparation for this AI revolution is woeful.  This lack of preparation disadvantages us now and in the future.

A revolution of this magnitude isn’t something that individuals can’t fix without a plan. Why? This is because AI will eliminate many jobs. It will create many other jobs, but for job seekers to enter these new fields requires government to direct job seekers into areas of demand.

There are two compelling reasons why government must offer greater guidance to job seekers. Australia has high levels of skills mismatch, that is people trained for occupations where personnel outnumber opportunities.

A second compelling argument for government intervention is when automation kills jobs, new one’s don’t automatically pop up, say Douglas Copland. Why? This is because it takes time to create new jobs. Much more critically, the jobs lost through automation will vastly outweigh those created.

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