Tech adoption more destructive for middle class: experts

LAHORE: Technology is turning out to be devastating for the middle sector, creating low tier jobs at one end and high tier jobs at the other, as more and more countries adopt it, experts have said on Tuesday.
Historically the increase in productivity has always been accompanied with more jobs, as the old jobs disappear new jobs are created, they said, adding that this disturbing trend could only be addressed by very high growth of around 7-8 percent in countries having surplus labour.
The nature of work is changing and the labour needed for that work is not available, while the jobs in which our labour is trained, no more exists, a social worker Dr Kishwar Dhingra said.
The job redundancy would increase with every upgrade in technology. Data processors, she added, would be gradually replaced by the machines. These robots may boost the productivity of a doctor but they will also replace labour in factories as the skill that the doctor possesses cannot be replaced by robots.
Similarly, technology may boost the performance of a hairdresser but cannot replace him, she added.
One must, however, note that low end service jobs are created by automation along with high paid jobs at the top end, Dhingra said, developed economies are facing this polarization of jobs which is the reason that inequality is sharply rising in these economies.
“Erosion of the middle class should be a worry for the planners,” said market analyst Benish Toor. As for more than 70 years middle class has been the backbone of democracy, civil rights and economic stability. The polarization in the job market has reduced the size of the middle class, increasing inequality and giving rise to tension within societies. This tension could be seen even in most developed economies, she added.
Besides the change in job market brought by automation, the job market has also been affected by digitalization. Start-ups now make match between the commuters and the car owners through which most of the vacant seats in their vehicles are filled by the passengers that reside on their route and leave for their offices at the same time, she said. This way the private car owners are not only covering their operating expenses but are also taking away the share of the commercial transporters. This service is now available in Lahore DHA and is moving to other localities as well, she added.
The beauty of this service is that the digital platform acts merely as a mediator between the driver and the consumer (or commuter in this case). The platform charges a fee for this service. The digital platform simply assures the creditability and reliability of the driver. The value of the labour is determined by the market forces.
The driver, who is going in the same direction where the commuter is moving, can cut the cost much above the price charged by a taxi or public transport. She said in developed economies similar digital platform has changed the transport sector in a big way.
Financial analyst Amina Usman said there are some less disruptive changes also that are defining the way the job markets are transforming. Some talented highly skilled individuals discard some very lucrative jobs in established concerns and prefer to work on contract basis for start-ups or creative industries at much less. This way they try to increase their overall life time income, she added. She said instead of selling their talent for a fixed price these young and skilled individuals prefer to exploit their human capital for a better future.
She said it is futile to resist the shift in labour market that is taking place in current digitalized economy. “The transformative impact of technology will ultimately make itself felt, she added.
Pakistan has not yet really felt the job polarization that is taking place in developed economies but technologies spread with speed and the polarized job market has to be tackled prudently. However, in the long-run the control would always remain with human beings and robots or digital platforms will be subservient to human beings, she added.