The minimum wage is a relatively new phenomenon to many countries and for the most part is a 21 century phenomenon. Many countries without minimum wages have had regional agreements, collective bargaining or other regulations that have had similar effects, such as USA where protective wage laws can be traced back 100 years or more.
The minimum wage is likely only ever go up both in absolute and real terms. In addition the UK has recently seen the advent of a Living Wage being brought from the thoughts of Adam Smith into something altogether more specific to current times. Thus the notion of “a wage sufficient to provide the necessities and comforts essential to an acceptable standard of living” has now been translated into a figure.
Though a minimum wage and a living wage may help propel some from a low income and protect those at the foot of the income pay it will potentially have other impacts too in the blue collar and non-industrial labour markets.
As wages at the lower end are driven up the challenge for companies is to be ever more competitive. The threat then comes not from people pricing themselves out of jobs – albeit unwittingly – in favour of people willing to do it for less, rather that the advent of technology will become ever more prevalent. Who needs a cab dispatcher when you have an App?
We take for granted ATMs, driverless trains and online shopping. Drones will soon be delivering packages and we have seen and heard about driverless cars following the lines or the car in front. Today you can buy a vehicle with self-parking. Mercedes are developing driverless lorries and recently road-tested one to great success. All of these you might think does not affect a lot of jobs. Right now perhaps not, but that is all about to change.
Driverless lorries means less drivers, obviously. Accepted they will still need to drive around towns, make deliveries and sign for goods but they won’t be needed on long haul. Soon the truck driver of the future will be more like the river and port pilots of today. The impact of driverless lorries doesn’t stop there, less truck drivers means less motorway cafes and rest stops, longer working hours for vehicles meaning less vehicles needed by the manufacturer. Lower maintenance schedules. No uniforms for drivers either. In the USA, 30 states list Truck Drivers as their most common job – about 3.5 million people in total. Another 5.2 million work in the USA ‘truck related industries’.
Some technology, when harmonised with the human, can offer a very productive and effective solution; remove boredom, increase productivity and ensure consistency. I once had a guided tour around a car production plant in Japan and saw at first hand doors hanging on belts high above me heading towards a chassis on rails and complete engines adjacent just waiting to be machined in. Amongst this very organised chaos are individuals with tools on suspended lines and every component delivered to them at precisely the right time. What did amaze me was that these lines do not produce endless versions of the same car in the same colour.
Where machines work WITH man then it can add value, even if it does drive man out of a job. Where Machines work INSTEAD of man then we need to think about the challenge that will bring.
The choice to employers is simple – Return on investment. A machine can run for years – with a little maintenance – and never tire. If the peaks are often enough an oversupply at lean times makes sense but if not then labour can always be used to fill the technical void and still be cost effective. So, less people needed to deal with only the occasional/sporadic peaks.
Right now there are some very interesting books being written about AGI – Artificial General Intelligence. All of them address the impact on labour but none of them can provide an answer to the changing face of labour, only to say that it will have an impact.
History has shown us that technology pretty much only ever creates jobs or, if it replaces them then other jobs are needed to fill a new demand. For the foreseeable future that should remain but it may not feel or look like that right now. The future for blue-collar contingent labour just got a whole lot more challenging and those in it will need to be far more flexible. Whatever happens, humans should always apply.
Should we be worried? Well I guess this depends on your point of view. Elon Musk recently described developing technology as “Summoning the demon” – pretty strong words indeed, especially from a man at the forefront of technology today.