Living wage means low paid jobs may be first to be impacted by automation

2016.08.10-–-Steve-Lennon-IoT-Transforming-Manufacturing-657x404

A recent report published from the Institute of Fiscal Studies has claimed that low paid jobs may be the first to come under threat when we see the introduction of artificial intelligence in the workplace. They make this claim on the basis of the living wage, which is hoped to be implemented at £8.50 per hour in many company’s by 2020, saying this could create a situation where it is more economical for employers to employ robots rather than pay this amount for human labour.

The living wage aims to produce workers with enough income to fully cover the basic costs of living, but is not yet a compulsory measure. It is the target for many companies though, and as these begin to pay workers at the living wage others will likely have to follow. In 2015, 4 per cent of people were paid at the living wage, however this figure is projected to increase to 12 per cent by 2020. The report suggests that many of the types of jobs which will see increases to the minimum wage in the years to come, are jobs that may be targeted to be overtaken by automated machines.

The report mentions how to counteract this possibility in the conclusion; “As with other causes of job loss, it would matter greatly whether anyone who did lose out from automation quickly found adequate re-employment.

“Moreover, the use of technology to replace some jobs can create new jobs that are complementary to that technology.”