Wave Of New Technology Could Wipe Out 15m Jobs - And The UK's Housing Market Is Broken, Warns Bank Of England Official
Some 15million UK jobs are at risk of being replaced by robots, the UK housing market is 'broken' and a rate rise is not coming any time soon as the economy is flagging, the Bank of England’s ‘blue-sky thinker’ has warned.
Speaking to the Trade Union Congress in London last night, the Bank's chief economist Andrew Haldane was blunt about the UK housing market shortage and how this was driving prices higher.
'The housing market is broken. There is a chronic and accumulated imbalance between demand and supply, and it is that which is sending skyward - and has sent skyward - house prices,' Mr Haldane said.
He also said that the case for raising interest rates was ‘still some way from being made’ as inflation was set to stay below the 2 per cent target in the coming years, wage growth appeared to have subsided and global demand remained uncertain.
The economist, reiterating his stance that a rate cut was as plausible as a rate rise, said that a hike in the cost of borrowing now would ‘increase unnecessarily the chances of the economy falling below critical velocity.’
For those reasons, I have continued to vote to leave rates unchanged, with a neutral stance on the future direction of monetary policy. Now more than ever, policy needs to be poised to move off either foot depending on which way the data break,’ he said.
Speaking about the labour market, he said that in the future some 15million jobs could become automated, especially administrative, clerical and production positions.
Replaced by robots: Administrative, clerical and production jobs are the most at risk of automation
He said that the current wave of technological advancement, as with the industrial revolutions in the middle of the 18th century and then in the late 19th century, had resulted in a ‘hollowing out’ of jobs that in turn was set to widen further the income gap between high and low-skilled workers.
But he said this time it could be different and that the process of hollowing out seemed to be happening at a faster pace than in the past as machines had now substituted humans not just for manual tasks and but for cognitive tasks too.
The autonomous driverless car, developed by Google, is one example of how manual tasks in transport and logistics may soon be automated.
As machines are becoming smarter, more jobs are becoming at risk of automation, especially low-skilled ones, although mid-skilled positions were going to be affected too, according to Haldane.
‘In the words of Marc Andresen, in future there could be two types of worker – those who own the robots and those who work for them,’ he said.
Speech: Bank of England chief economist Andy Haldane spoke about the future of the labour market
‘If these visions were to be realised, however futuristic this sounds, the labour market patterns of the past three centuries would shift to warp speed.’
If the option of skilling up was no longer available, this would increase the risk of ‘large scale un- or under-employment’, according to the economist.
Haldane added: ‘The wage premium for those occupying skilled positions could explode, further widening wage differentials. And labour’s share of the pie could fall even more dramatically than in the past. On this view, the tree could become hollowed-out to the point that it may no longer be able to support itself’.
‘In a world in which machines came to dominate tasks involving core cognitive processing, the importance of, and skill premium attached to, non-cognitive skills is likely to rise,’ Haldane said.
‘The high skill - high pay jobs of the future may involve skills better measured by EQs than IQs, by jobs creating social as much as financial value.’