Posted on December 6, 2016 by staff

Mark Carney: 15m British jobs threatened by machines


The governor of the Bank of England has warned that 15 million jobs in Britain are under threat from machines.

Artificial intelligence and robotics are developing at a rapid rate, leading to concerns that entire workforces could be wiped out.

Some observers have argued that as more manual jobs become automated, ones requiring so-called softer skills – such as those requiring communication – will be created to compensate.

But Mark Carney painted a bleak picture in a speech at Liverpool John Moores University, pointing to the precedents of the industrial revolution and relatively recent decline of the UK’s manufacturing industry.

“Every technological revolution mercilessly destroys jobs and livelihoods – and therefore identities – well before the new ones emerge,” he said.

“This was true of the eclipse of agriculture and cottage industry by the industrial revolution, the displacement of manufacturing by the service economy, and now the hollowing out of many of those middle-class services jobs.”

Carney said “machine learning and global sourcing” were the main threat to livelihoods and that current living standards in this country were at their lowest for years.

“Real wages are below where they were a decade ago – something that no one alive today has experienced before,” he told Channel 4.

“That is incredible and that shines a light on inequalities that exist in this economy, exist in other economies and make people question what is being done to address those and what are the fundamental causes of those.

“Now may be the time of the famous or fortunate, but what of the frustrated and frightened? For them, it has been almost a lost decade of growth.

“Experience shows that when the economy enters recession, the poorest are hit the hardest. During recessions the lower-skilled, lower-paid people tend to lose their jobs first. And recessions disproportionately affect the young.

“Globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities.

“For free trade to benefit all requires some redistribution. We need to move towards more inclusive growth where everyone has a stake in globalisation.”

However he defended the Bank of England’s monetary policy. Interest rates were set at a record low of 0.25 per cent in August while it also embarked on a programme of quantitative easing, where the bank essentially prints extra money to buy Government bonds.

He said it had created 2.5m jobs, increased wages by 17 per cent and raised real gross domestic product  by 15 per cent.

“Monetary policy has been keeping the patient alive,” he said. “It has averted depression and helped advanced economies live to fight another day so that measures to restore vitality can be taken.”