Massive Immigration Overshadowed by the Upcoming Wave of Robots

eContribution

Laszlo Lovaszy

Massive Immigration Overshadowed by the Upcoming Wave of Robots

Everybody now talks about Brexit and illegal immigration; however there was another crucial referendum on our future several weeks ago. Voters in Switzerland rejected with a large and convincing majority the idea of introducing the so-called unconditional basic income (UBI) scheme this June. According to supporters of this campaign, over 90 % of office workers will be replaced by computers soon. Let’s see the case of Artificial Intelligence (AI) first. According to a recent Nature article, we have just arrived at “a historic milestone in artificial intelligence” because several months ago a Google Artificial Intelligence algorithm mastered the ancient game of Go. The result indicates that deep-learning software can defeat even a human professional five times out of five in tournament conditions.

Jobs expected to be lost

According to research published by the World Economic Forum, over five million jobs will be lost by 2020 as a result of developments in AI, robotics and other technological change. Moreover, two third of the jobs lost will occur in office and administration roles (around 5 million). It is a very important prediction in order to foresee what aspects should be taken into account, especially in light of the fact that, according to the United Nations, within the next 15 years one billion additional people will be in the world.

In addition, as reported in a McKinsey Global Institute study in 2012 and ILO’s recent figures (2014), they are still over 70 million young men without jobs in the world. Even the advanced economies could also see about an additional 32-35 million jobless people by 2020. (Just to remember, this estimate was done well before the so-called migrant crisis broke out.) To recap, as McKinsey’s study concludes, between 90 and 95 million low-skilled workers (or 2.6 per cent of the global workforce) will surely not be needed by employers by 2020.

Is (im)migration the key to an ageing Europe?

According to a September 2015 study by Germany’s Institute for Employment Research less than 15 % of refugees from the Middle East and other war-torn countries entering Germany have completed vocational training or a university degree. Furthermore, even though Germany has seen the lowest unemployment rate in Europe since 1990, one-fifth of unskilled labourers are already without work there. On average an eighth-grader in pre-war Syria had a similar level to a third-grade student in Germany, according to the Organisation for Economic Co-operation and Development (OECD).

Some other experts are of the entirely different opinion that more migration is needed. Bertelsmann-Stiftung, an influential think tank in Germany, still argues that: “without immigrants, the number of people of working age would sink from approximately 45 million today to less than 29 million. That would represent a decline of 36 percent. This gap cannot be closed without immigration.” It also advises that about 500.000 immigrants should enter Germany on a yearly basis to maintain its economic growth and sustainability.

If we look at the projections the McKinsey Global Institute (MGI) produced in 2012, we can expect that the global labor force will approach 3.5 billion in 2030. As it estimates: “(B)ased on current trends in population, education, and labor demand, the report projects that by 2020 the global economy could face the following hurdles: (…) 90 million to 95 million more low-skill workers (those without college training in advanced economies or without even secondary education in developing economies) than employers will need, or 11% oversupply of such workers.”

Where will the new jobs be in Europe?

The European Commission’s Cedefop forecasts that, with the exception of the construction sector, in Europe all sectors will see a decreasing demand for labour between 2015 and 2025, including the medium or high-skilled professionals altogether. In addition, in the EU around 47% of all jobs will require medium-level qualifications, not that of low-skilled. In addition, according to a Brueghel Institute’s analysis published in 2014, „the probability of job automation across occupations, the proportion of the EU work force predicted to be impacted significantly by advances in technology over the coming decades ranges from the mid-40% range (similar to the US) up to well over 60%.“

Martin Ford, the winner of the 2015 FT & McKinsey Business Book of the Year Award (Rise of the Robots: Technology and the Threat of a Jobless Future, 2015) writes that the figure of job creation by decade between the 1960s’ and 2000’s has continuously fallen from 30% to 0%. In addition, according to a comprehensive study published by Oxford University and Citi in 2016, between 2000 and 2010 less than 1 % of current employees were able to transfer into the IT sector. Even though there will be a huge increase in terms of new jobs in the IT sector (+18%), only around 3% of total US employees will belong to IT sector in 2022.

Last but not least, as modern rehabilitation services and technologically driven solutions and innovations indicate, the human body itself can also be upgraded – and it will lead to an entirely different way of organizing economies, work and society, and it might be about to happen.

Nothing will be impossible. And are we ready for this?

By Laszlo LOVASZY, Affiliation United Nation expert and adviser at the European Parliament, Email laszlolovaszy[at]gmail.com

2017 - Volume 11, Issue 4