with Warren Weertman
Date Posted: June, 5 2017
Education and Automation
One interesting point that Richard made during his conversation with Annemie was around the role of education, in particular higher education, in helping people get into employment. This is particularly important amongst youths in Europe, for example, where the unemployment rate is currently 21%
But not only is higher education important for its own sake, it is also important from the perspective that it can drive higher wages and higher economic growth. In order to address this problem, as societies, we need to be considering (i) the cost of higher education and (ii) what barriers to entry / opportunity costs.
When thinking of barriers to entry, what I have in mind here are what economists call “Ashenfelter Dips”. These are dips in wages that occur when workers who enter into training programmes have often experienced a fall in earnings beforehand. In essence, it’s a recognition of the fact what when retraining, people will experience some loss of income.
But why does this matter?
It’s perhaps a cliché to say it, but we need to consider the rise of automation on our societies and what it means for our collective future as a society given that automation will probably have a big impact on our societies.
One common argument that I sometimes hear is that we’re producing too many graduates for the market. But, interestingly, research by the OECD in 2007 (but still relevant today, I think) shows that despite concerns that OECD countries are producing too many graduates, in fact the opposite is occurring.
Rather what is happening is that the creation of jobs is being stimulated by the increase in the number of people going through higher education. But, here’s the catch: people need to be better informed about what to study to avoid a situation in which a glut in “arts and humanities” students is produced, which can be a problem given that graduates with qualifications in arts and humanities may earn less than graduates in STEM subjects (for example).
So what should people be studying to cope with the age of automation?
I came across an interesting infographic on the website Visual Capitalist on the impact of automation on our societies. Some of the insights from the infographic include most low-wage jobs will be automated but jobs that require social skills, creativity and/or higher education are less likely to be affected by automation.
Interestingly, the infographic shows that nurses, teachers and software developers could become the most common jobs.
These are just some thoughts on how our societies should be dealing with the extreme of automation. What will you be doing to deal with automation?
Thought from the Lifeguard’s Hut
If you think education is expensive try ignorance
- Derek Bok