Will Automation Help When the Population Declines? | Greetly App

Population decline has been a long-standing concern in countries like Japan, Greece, and Italy. More recently, despite Donald Trump might be saying the United States is 'full', experts have been voicing concerns over population decline in many parts of the United States and Europe as a whole.

Seemingly unrelated, countless articles and experts are also fretting over the rise of automation and artificial intelligence and what it could mean for the job market.

What if automation could actually be an answer to staving off economic collapse while the population declines?

Yes, a Population and Workforce Decline

Once, having large families was necessary for economic reasons. Children did manual labor around the farm and the house, gathering water, growing food, and taking care of younger children. In some places around the world, this is still the case.

However, in developed countries, industrialization increased productivity and prosperity. Vaccines reduced childhood mortality rates, and readily available birth control altered the birth rate. These factors resulted in the Baby Boomer generation – born following WWII until about 1965 – to be the high point in population growth from a birth rate perspective.

In order for a population to be maintained, approximately 2.1 children need to be born for every woman. In many places around the world, mostly in developed countries, that rate is significantly lower.

As we near 2020, the Baby Boomers are reaching retirement, and there is concern that their mass exodus over the next 10-15 years will cause a shortage of workers. Bain and Company predicts a need for 55 million additional workers to fill the gap needed to maintain the growth of GDP in OECD countries as Boomers retire by 2030. A decline in workers can have devastating impacts on GDP. This will affect everyone, from students to retirees. 

Those jobs won’t be needed or distributed equally. Rural areas and mid-size cities are experiencing an exodus and population decline of their own as younger people move to urban areas. Yet the largest cities are overpopulated, making it difficult to find jobs there.

Automation – Is It a Job Killer?

Technology and automation increase productivity in tremendous ways. Economic growth had always been slow and steady prior to the Industrial Revolution, as all goods were produced by hand on a small scale. With industrialization, productivity exploded. Farmers could produce more food while requiring fewer hours of human labor. In manufacturing, assembly lines required hiring multiple people to each do one job in the manufacture of a machine.

Then the machines started helping manufacture themselves and thousands of people were laid off. While productivity had increased, employment declined. Manufacturing and agriculture have been the most hard-hit by the shrinking number of workers required.

No one wants to find themselves out of a job or replaced by a machine. Current technological advances and the rise of artificial intelligence have many people ringing alarm bells that robots could be entering many more sectors of the workforce. A compiled report by MIT shows that predictions about the number of jobs that could be lost due to automation range from 10 million to 2 billion. (The wide array of numbers suggests that nobody really knows what could happen.)

Many people argue that automation will create jobs as well as replace them, but that the jobs will be different and the transition could be difficult.

Surprisingly, automation has not always resulted in mass layoffs or even a decrease in the number of workers. When ATMs were introduced, the number of bank tellers increased due to other factors. The same happened for cashiers when scanning technology was introduced.

In fact, automation can free up workers to focus on other tasks without a great cost to the business. Those bank tellers no longer handled as much cash from deposits and withdrawals but instead worked at signing people up for new accounts. An iPad receptionist allows guests to be checked in and directed in an efficient manner, allowing human administrative assistants to accomplish other tasks, like organize office events or order supplies.

Summary - Embrace the Changes

When considered together, automation could be a possible solution to sustaining economic growth - or at least slowing economic decline - as the population of older workers retires and there are fewer young people to take their places.

In fact, some do argue that in developed countries, our rate of productivity due to automation will help sustain GDP in spite of population decline.

As labor is already scarce in rural markets, automation in whatever jobs are possible could free up the labor force to fill other needed positions. When workers are scarce, wages go up, and if automation keeps the availability of services higher, people might be tempted to move back to rural areas. However, the transition could be messy, as workers will have to have different sets of skills. Several strategies could help reduce problems if we start implementing them soon.

By embracing the changes of automation and working toward ways to make the transition for workers smoother, developed nations could actually find themselves keeping productivity steady and increasing the quality of life for their reduced populations.