Labour Market Polarization

Introduction The machine’s ability to perform cognitive, physical, and social tasks is changing jobs and the labor market at a rapid pace. Automation has already taken over many tasks of which minimal labor input is necessary. Low-skill jobs are stagnating, middle-skill workers are being provided with lower pay, and those of higher skill roles are receiving even greater pay. The polarization of work availability is growing as machines’ ability to perform the tasks of lower-skilled workers is only developing further; however, machines’ presence in the labor market is not always apparent. With a focus on balance between wages and investment required for the transition into automation, the labor market of many developed and developing countries

When considering the varying application of technology in the workplace, the middle and lower skill roles remain subject to the most replacement. Their routine information processing, calculations, and decision making make them the most susceptible in the advent of cheap, powerful computers and greater access to data (Gibbs 5). Labor market polarization is creating a gap in job availability between lower and middle skill tasks against those of higher skill sets; however, the question remains as to how job availability may shift as a result of automation. While “manufacturers operating in a high-wage country commonly seek to reduce cost through large automated equipment,” a high utilization of such methods makes it impossible to synchronize production with demand (Ketokivi et al. 2). It is necessary to recognize that automation is not always the future of a role or task, despite a machine’s ability to perform it. Job availability is still subject to change as a result of automation and computerization, reducing the necessary application for lower and middle skill roles, but this case is not always apparent. A human’s presence in these tasks has its own benefit, as does that of a machine. A machine’s presence can introduce efficiency alongside cost reduction, while a human’s presence introduces reliability and the ease of adaptation to change, such

Between 1970 and 2010, a decline in labor share alongside greater capitalized income led to an increase in wage inequality, due to capital income’s tendency to unevenly distribute labor income (Prettner 2). With the implementation of automation and computerization in the labor market, labor wages are replaced by physical assets, causing an increase in capital income within its economic sector. By reducing the presence of physical labor, assets and capital are seen to further imbalance the equality of wages through the lack of distribution of income; in contrast, the role of technology can result in a greater variety of labor, raising wages, or directly address an increase in automation, benefiting the overall productivity of the economy while resulting in an ambiguous effect on lowskill wages (Hémons and Olsen 3). With automation comes a necessary investment. As the wages of low-skill labor increases, greater incentive and implied turnaround is expected through the implementation of automation, lessening the availability of the low-skill roles in the labor market, further polarizing the wage inequality between different skill sets. Through its varying forms in the labor market, automation holds an impactful stance