"Wages, salaries, and benefits are all just overhead that can be eliminated by use of machines"

That rather ominous statement comes from this very interesting article.  It reiterates something I've been saying on this blog for several years - namely, that automation is threatening almost every job out there.  Here's an excerpt.

The chart is a plot of oil rigs in the United States compared to the number of workers the oil industry employs, and it’s an important part of a puzzle that needs to be pieced together before it’s too late. (Click the image for a larger view.)

What should be immediately apparent is that as the number of oil rigs declined due to falling oil prices, so did the number of workers the oil industry employed. But when the number of oil rigs began to rebound, the number of workers employed didn’t. That observation itself should be extremely interesting to anyone debating whether technological unemployment exists or not, but there’s even more to glean from this chart.

. . .

... notice how quickly this all happened. It took TWO YEARS. How did it happen so fast? Because the oil industry didn’t really need the workers it lost in the first place. It’s the oil industry. It’s used to making lots of money, and when you’re making money hand over fist, you don’t need to focus on efficiency. Being lean and mean is not your concern. However, that changes when times get tough, and times got very tough for the oil industry as oil prices plummeted thanks to new competition from yet another technological advancement — fracking.

So once it became important to increase efficiency, that’s exactly what the oil industry did. It let people go and it invested in automation. In the summer of 2016, oil prices were no longer under $30 per barrel, and had gone back up to around $50 per barrel where they remain. That’s half of the $100 per barrel they’d gotten used to, which is fine as long as they’re able to produce at twice the efficiency. As a result, like a phoenix rising, they emerged transformed. Oil rigs returned to drilling, but all the rig workers didn’t. Those who were let go became simply unnecessary overhead.

Sleeping Through a Wake Up Call

This is a story of technological unemployment that is crystal clear, and yet people are still arguing about it like it’s something that may or may not happen in the future. It’s actually a very similar situation to climate change, where the effects are right in our faces, but it’s still considered a debate. Automation is real, folks. Companies are actively investing in automation because it means they can produce more at a lower cost. That’s good for business. Wages, salaries, and benefits are all just overhead that can be eliminated by use of machines.

. . .

A landmark 2017 study ... looked at the impact of just industrial robots on jobs from 1993 to 2007 and found that every new robot replaced around 5.6 workers, and every additional robot per 1,000 workers reduced the percentage of the total population employed by 0.34% and also reduced wages by 0.5%. During that 14-year period of time, the number of industrial robots quadrupled and between 360,000 and 670,000 jobs were erased. And as the authors noted, “Interestingly, and perhaps surprisingly, we do not find positive and offsetting employment gains in any occupation or education groups.” In other words, the jobs were not replaced with new jobs.

There's more at the link.  Highly recommended reading.

The impact of automation on jobs that everyone thought, until recently, were "safe" from such influences is growing by the day.  I think younger people today have every reason to be concerned as to whether or not they'll be able to find jobs at all.  In many cases, traditional avenues of employment are being closed off at high speed.

For a lot more related information, see The Shape of Work to Come 2017. It's a special edition of City Journal, with many useful articles. It'll certainly make you wonder about your own job security!

Peter