A restaurateur once explained to me how he got into the business: “People need to eat.” That sounds logical, except that a few years later he went bankrupt. It turns out that he was only partially right – people were eating like always, just not at his restaurant.
That story is a painful reminder of how difficult it is to predict what kind of businesses or professions will thrive, much less succeed, in the era of rapidly changing technology and globalization.
In recent years there have been endless numbers of forecasts about which job categories will disappear and which are safe against obsolescence. These articles win wide readership, and with some justice: The future is scary, and earning a living is important. At a time when people are living longer and technology is changing our daily reality, people are both curious and fearful about the great unknown.
The basic approach to these predictions is to identify which jobs will be performed by machines and computers rather than people, and on that basis establish a risk level for each job. The converse is to examine which job categories will remain in human hands for the foreseeable future.
The problem is that this approach is too narrow and therefore prone to error.
In its 2019 State of the Nation report this week, the Taub Center for Social Policy Studies looks at which jobs in Israel are at most risk to computers and machines. The first impression you get from the findings by researcher Shavit Madhala is that if you have a child who wants to go into the construction industry, tell him or her to drop it and learn how to sing or do stand-up comedy.
Why? Because the probability that construction work will become increasingly automated is very high. On the other hand, the odds of a computer being able to entertain an audience for an evening of good jokes is very small.
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Rock star or welder
The great skills divide is clear: Machines and computers have an edge of people in industrial jobs that involve routines. In activities that involve creativity, high emotional intelligence and decision-making, people still have it over machines.
Job categories least at risk to automation include art, entertainment, information and media, education, public administration and security, and financial and insurance services. The riskiest areas are construction, industry, transportation, storage, and hospitality and food services.
But the choice between rock star and welder isn’t nearly so simple. First, the threats hovering over many job categories have nothing to do with computers but with union protection and supply and demand for their services. Israel, for example, must build at least 60,000 new housing units annually. Even if more of the work is done by machine, the industry will need a lot of workers. But how many singers and other creative people does the local market need?
In many industrial sectors, especially in the public sector, collective labor agreements protect workers, and this gives them a nice advantage in competition with automation. The building sector has fewer protections but it offers workers a security net of work conditions, pay and weekly work hours. Where do singers get overtime bonuses?
While there are no figures on average pay for singers, it’s possible to measure the supply of singers by the interest in reality-show song competitions. No one airs contests for the next star construction worker. Yet the Israeli labor market is short of construction workers and has to import them from China.
Doctors and teachers face a relatively low risk of losing their jobs because computers and machines aren’t destined to replace them anytime soon and they’re protected by collective labor agreements. But a financial crisis can change that, as was the case with Teva Pharmaceutical Industries, which laid off thousands of employees as it coped with a massive debt burden and declining sales.
Banking workers have been sent home in the thousands in recent years despite labor agreements. Yet they enjoyed deluxe severance packages that reached as high as 1 million shekels ($290,000 at current exchange rates). For years, collective labor agreements and the slow pace of digitization protected them, but that changed under the Bank of Israel’s current bank supervisor, Hedva Ber, who incentivized the banks to trim their payrolls and accelerated digitization by approving the establishment of Israel’s first all-digital bank.
Israel slow to automate
Delays in automation occur due to marketing considerations. For instance, planes have long been able to take off and land without a pilot, but no airline has yet to offer cheap flights on a pilotless plane. Of course, it’s not only marketing considerations, but it does show how much consumer resistance to technology plays a role in holding back automation.
Israeli industry has been slow to automate, which has made it lag other developed countries in labor productivity. Factories prefer not to invest in equipment and rely on more labor-intensive processes. In this case, it may well be that low wages are saving workers’ jobs.
This week the Central Bureau of Statistics published a survey that included the degree to which workers in various professions feel their jobs are at risk. A full 64% said they didn’t believe their jobs were at risk in the coming year.
Those who felt their jobs were most at risk were drivers, only 51% of whom expressed confidence they would keep their jobs. Doctors were the most confident at 83%, followed by nurses (81%), nursery and elementary school teachers (79%) and secondary school teachers (75%).
The most troubling aspect remains how to prepare for a changing job market. If you’re a young person without training or a profession, the answer is relatively simple. If you know self-driving cars are on the horizon, you give a miss to a career as a bus driver.
The real problem is for those who are already deep into a profession, with many years of experience and many more before retirement. This is no small matter: According to the Taub study, 15% of jobs in Israel are at high risk and 54% at moderate risk.
In other words, most Israeli workers will have to cope with fundamental changes in the job they now have or even their entire job category. Whatever labor agreements, regulations, the law and marketing factors may do to delay it, changes will arrive.
Israel’s low unemployment rate is stealing the urgency of the challenge we face. The government, as is its wont, will only act when the crisis is upon us. That’s unfortunate because retraining programs that start today will ease much of the trauma tomorrow.