A new age of work: How automation is widening inequality

Across the globe, technological progress has brought about some of the most significant and rapid changes in history. Everything from shopping for groceries to the way in which world leaders conduct international diplomacy has been transformed by major innovations in technology. The massive impact of technology on the world has not been limited in any aspect. The global economy has been revolutionised, with technology now granting producers and providers the ability to automate tasks that human labour was once necessary for. However, technology’s impact on the global economy has not necessarily been to everyone’s advantage. Global inequality continues to have a profound impact, with the world’s poorest 50 percent owning just 8.5 percent of total global income (Hardoon & Suckling, 2022). Now, many fear that technological progress and automation is helping widen global inequality and hinder attempts to create a more equal planet.

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Technological innovation has resulted in middle and lower-skilled jobs being replaced by automated machines, requiring the less well-off to upskill by attaining higher educational qualifications such as university degrees (Reenen, 2011) (Allen, 2017). However, not everyone has the ability to attain higher education qualifications (Prettner & Strulik, 2020). Education attainment is largely impacted by a number of factors such as household income, which has led to educational inequality in many parts of the world (Ford, 2013). Automation removes income from low-skilled workers and many of these workers have insufficient opportunities to upskill leading to a situation whereby income inequality rises.

Another cost of automation is increased unemployment, particularly amongst lower-income people. Automation can also, however, enable the world’s richest to be more innovative, productive, and efficient in making profit and increasing their personal wealth (Brynjolfsson & McAfee, 2011). Labour institutions have also been weakened by automation, as many institutions no longer have the collective bargaining power to force reforms and protect the labour force (Norton, 2017). The wealth of the world’s richest ten percent has increased by over $3 trillion within the last two years, showing just how easy it’s been made for those already with resources to expand their wealth even further (Hardoon & Suckling, 2022). Automation has created a situation whereby the incomes of the world’s poorest are declining while the world’s richest become wealthier at an increasing pace, furthering global income inequality.

Mitigating the impact of technological innovation on global inequality may be one of the greatest challenges faced by governments across the world. Many of the concerns raised around the impact of technological innovation on global inequality have gone unheard. This could result in detrimental consequences affecting every nation. However, overcoming the negative effects of automation on inequality is not an insurmountable task, and, with global political will, perhaps the world could enjoy the benefits of technological innovation without the challenges it currently creates.

Bibliography

Allen, B., 2017. Global effects of technology will not reduce inequality: report, s.l.: The Sociable.

Brynjolfsson, E. & McAfee, A., 2011. Race against the machine: How the digital revolution is accelerating innovation, driving productivity, and irreversibly transforming employment and the economy. s.l.:Brynjolfsson and McAfee.

Ford, M., 2013. Achievement gaps in Australia: what NAPLAN reveals about education inequality in Australia. Race, ethnicity and education, 16(1), pp. 80-102.

Hardoon, D. & Suckling, E., 2022. Inequality: Global trends, s.l.: Development Initiatives.

Norton, A., 2017. Automation and inequality: The changing world of work in the global South, London: International Institute for Environment and Development.

Prettner, K. & Strulik, H., 2020. Innovation, automation, and inequality: Policy challenges in the race against the machine. Journal of monetary economics, Volume 116, pp. 249-265.

Reenen, J. V., 2011-12. Wage inequality, technology and trade: 21st century evidence. Labour economics, 18(6), pp. 730-741.