The increase in the National Living wage could mean robots replace even more human jobs. A study conducted by the Institute for Fiscal Studies (IFS) has advised that the monitoring of the minimum wage rate is “extremely careful”. This is because employers are set to cut costs and automate aspects of their businesses.
Employers are more likely to invest in robots and computerised systems if labour is more expensive. This could mean that in the future, HR departments will not only be managing human workers, but also robotics if pay rates are set to increase.
The November budget in 2017 revealed the pay rates will increase in April 2018. The national living wage for over 25 year olds is set to increase by 4.4% from £7.50 to £7.83 an hour. The rate is predicted to climb up to £9 per hour by 2020.
The IFIS have stated employees who are paid the minimum wage in 2020 are more than twice as likely to be in the 10% of ‘routine’ job roles compared to today. Examples of these job roles would be receptionists and retail cashiers.
“These types of people tend to be easier to replace with machines. So one response from a rational employer, which is thinking how best to produce what they want, is substituting labour with machinery. It’s an additional reason to be cautious” IFS associate director, Robert Joyce stated.
Some believe automation isn’t about “replacing people”, but instead the driving force behind job conversions. “There may be changed to efficiencies, such as, administrative tasks and reporting, which the HR industry has already seen with the advancements of HR systems” Natalie Ellis, a HR consultant at AHR Consultants stated. She also added: “This has led to more face-to-face advice, and more specialisation by HR professionals into areas such as training and development”.
Automation has had a huge impact in the automotive and technology sectors. For example, robots working in the automotive sector are good at performing an assisting role rather than replacing human workers. Natalie Ellie believes “For other, more traditional, industries, it may take many years before we witness the impact of artificial intelligence on employment”.
A higher minimum wage rate was eventually going to affect employment at some point, but economists were never sure when. In 2015, the National Living Wage increased to £6.70 per hour, however there wasn’t a significant impact. This could be the same in 2020. The higher wage rate will affect jobs which are seen to be more automatable, which highlights how careful the rate should be monitored year on year.
Rebecca Long-Bailey, Labour shadow business secretary, believes well-harnessed technological change “could bring about immense benefits – transforming jobs and workplaces and driving up productivity and living standards”. The Government is working to ensure the benefits of new technologies were felt across different sectors and regions to create highly skilled, well-paid jobs for the future.
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