Is the Working Society Running Out of Jobs?

The widely-debated "digital acceleration" has, in the view of some analysts, the potential of making up to half of the existing jobs obsolete. The fervid reaction of the media and the public at large overlooks that other estimates expect "only" one job out of ten to become redundant. In addition, such estimates refer to gross job losses that do not consider any job-creating effects of a purported digital acceleration. Yet, historical evidence suggests that technical progress raises on balance the number of jobs rather than reducing it. Besides, there is no evidence so far that digital acceleration and technology-induced labour shedding have speeded up technical progress. The current high unemployment has its roots, apart from sluggish demand, in immigration, rising labour force participation and rationalisation of production. The studies at hand differ not only with regard to the scope of potential job losses due to digitalisation, but also on the perception whether such losses will primarily affect unskilled workers. Even if the danger of a massive technology-induced discharge of labour (in net terms) appears small for the foreseeable future, economic policy should take appropriate action as from now. First and foremost, the disproportionally high tax burden on labour in relation to other production factors needs to be corrected, which would also ease the pressure towards rationalisation. Second, the education and training system as well as vocational redeployment measures ought to provide the qualifications required for the digital era and, third, the regulatory framework should be adjusted accordingly. Fourth, aggregate demand management must create overall economic conditions that facilitate transition from one job to another. Finally, competition policy and the design of income (re )distribution need to ensure that the benefits from industrial automation will not be enjoyed by a handful of companies and persons only.