Technology and innovation are increasingly becoming more efficient, exponentially increasing the power of information technology, having a knock on effect on the economy. Essential jobs are comprised of tasks in which automation can become a substitute, lowering the amount of jobs required for the same final effect. However, it is essential that we understand the interactions between these technologies and employment. Significantly, this technology can offer complementary effects to those working, increasing productivity. For example, AI boosts productivity in the work place in a number of ways, such as automating previously routine tasks for jobs like Software Development.

This leads onto the concept of job polarisation, where the higher wage and lower wage jobs are protected, compared to the middle wage jobs. This is due to the inherent characteristics associated with these jobs. For instance, in many developed economies, routine middle-wage jobs such as bank tellers have been increasingly automated or outsourced. Meanwhile, high wage jobs like software engineers and financial analysts are in greater demand because they require certain abstract problem-solving and creativity. Additionally, lower wage service jobs which rely heavily on manual, non-routine human interaction are also protected.

Lower wage jobs involving manually intensive work are relatively price inelastic, so there is no necessary incentive to substitute workers with automation. The case is similar with higher class jobs. However, for the middle wage jobs, which are typically repetitive tasks, demanding less technical mastery to perform, additional tasks in industries would on the most part decrease and be substituted by automation (See Chart Below)

The paper, ‘Why are there still so many jobs’ by David Autor discusses the disparity of the different classes of pay and the fact that it is difficult, when one is in poverty, to go through university (due to the cost and time it takes to earn the necessary qualifications to break through from the middle class jobs). Thus, they are left behind when it comes to wage polarisation. In fact, total hours worked by those with a university degree grew from 42 to 53 (1982-2005) on average. Technology cannot be considered a substitute for lots of communicative or flexible jobs, as stated above. Take lawyers for example, as they are unique and cannot be replicated yet by technologies efficiently enough to shift from humans. On top of this, there is a necessary lag in the adoption of technologies, so even when technology is able to do these tasks, there is a time between when it is created and actual implementation.

In my view, that is why there are “still so many jobs”, as technology is not advanced enough to fill these jobs. This is due to the concept of Polanyi’s Paradox, meaning that these jobs, no matter how seemingly simple, have certain tacits, defined as “you know more than you can explain.” For humans, it is basic and intuitive knowledge which is difficult to put into words, therefore making it difficult to interpret for technologies.