STUDENTS : JOBLESS FUTURE JAM-PACK

ONE of the first concepts taught in economics is the circular flow of income : workers sell their labour to producers and receive income in return, which then flows back to producers in return for finished goods and services.

THIS foundation sustains the modern economy. But the quest for higher profits accelerates the breakdown of this relationship between capital and labour.

In its worship of the bottom-line, capitalism aims to drive-labour costs ever lower through technological progress.

Joblessness and increasing inequality erode purchasing power and break down the circular flow. Such upheavals have occurred before, with the mechanisation of agriculture and workers crowding into urban areas in search of employment.

Subsequently, as manufacturing was increasingly automated, movements such as those of the Luddites arose, fighting machines to try save their jobs.

With fourth industrial revolution technologies, the scale of automation maybe greater than ever before.

We can crudely view the composition of jobs in a typical economy as a pyramid structure, with an abundance of low-paid, low-skilled jobs at the bottom, and fewer higher-skilled jobs available at the top.

Automation began towards the bottom, with the mechanisation of agriculture and then of manufacturing. Economists and technology optimists maintained that automation is good. Humans don't have to work menial jobs anymore; robots can do that for us.

Now, automation is creeping further up this pyramid towards a future where more unemployed workers will vie for fewer jobs on top.

As machine learning and AI prove adept at diverse tasks, from detecting breast cancer to running suicide prevention hotlines, this future no longer seems out of sight.

Technology optimists claim that as automation causes unemployment, it also creates whole new categories of jobs that we may not be able to imagine at present, such as in the field of data science, which has taken off in recent years.

For this possibility to occur, workers must possess the skills for these new jobs. They require effective worker re-skilling.

Despite the optimists claims, there are reasons to believe that there will be fewer jobs for humans and re-skilling programs will become increasingly ineffective.

Looking at headcounts of the emerging leading companies of the world, compared with those of the past, illustrates this trend. Tesla's market cap recently surpassed $100 billion ; its employees count is under 50,000. Ford, at less than half the market cap, employs about four times as many employees.

Technological progress has given rise to a new labour category - gig workers. This category is emblematic of the fact that the relationship between the firm and workers has been severely degraded.

Workers are viewed as cost of production that must be minimised - whether that means eliminating basic benefits such as health insurance or placing workers or even harder and shorter contracts.

Eventually, it means eliminating the worker altogether. After all, robots don't need time off, don't have feelings [yet!] and, while there may be depreciation, don't require health insurance.

This is best illustrated by the evolution of the transport industry, from a regulated industry of taxi drivers, to Uber's gig economy, and eventually to full automation with self-driving cars.

The honor and serving of the latest global operational research on Jobs and Future, continues. The World Students Society thanks author Anum Malkani.