There’s a robot on my stoep: Job security in the age of 4IR

No matter what profession you’re involved in, you’ve probably heard by now that there’s a robot coming to take your job. Until recently, the threat of automation was largely confined to blue-collar work. But, the emergence of Artificial Intelligence (AI) is swiftly throwing white-collar work into sharp relief and with it, the middle class – already under pressure from a general malaise of stagnant income growth – now also finds itself under threat of technological unemployment.

The implications of technological unemployment for the growth and stability of South Africa’s middle class are complex and dire. As we celebrate 25 years of freedom, SA’s established middle class remains small and demographically unrepresentative. Black South Africans dominate the emerging middle class where they balance precariously on the rungs of SA’s social mobility ladder. Sadly, technological unemployment threatens to dislodge their footing further.

Many new entrants to the middle class tend to be employed in the routine and repetitive white-collar jobs that we’ve all heard are easily automated. Examples include, but are not limited to, bank tellers, accounts clerks, office administrators and people working in transport logistics.

We’re starting to see what impact new technology is having on routine white-collar jobs in the banking sector. In September 2018, Nedbank made headlines when it started installing software robots that could potentially eliminate 3,000 jobs. Similarly, in March 2019 it was reported that 1,200 Standard Bank jobs are at risk due to the imminent closure of 91 of the bank’s branches because it is becoming more digitised. Then there’s also the recent story about Absa bank potentially cutting back 827 jobs as part of a new strategy, which includes the need to improve its competitiveness relative to its more digitally savvy competitors.

Alongside traditional banks expanding their tech solutions, a new generation of “digital banks” have also made their appearance in the past three years or so. These new banks run entirely on mobile platforms operated by AI. They don’t have physical branches staffed by people.

How does our nation move forward trying to expand the middle class, as the jobs that have traditionally sustained it start disappearing?

It is argued that those with specialised skills – a combination of advanced technical skills alongside significant social capital as well as indomitable entrepreneurial drive – will not just survive the transition to the Fourth Industrial Revolution (4IR), but also thrive in it.

But recent research reveals a worrying picture in SA. Studies show that the evolution of the 4IR reinforces the historic cleavages that exist in our economy and in our society. Beyond job losses, the 4IR also produces inequality as a result of skewed access to finance, technology and other opportunities to participate in high-tech industries evolving from it.

Living in Cape Town and being able to work from coffee shops along the coast is a special point highlighted by the study. While the study doesn’t offer any racial analysis, an inspection of the tech companies listed by it, notably those launched in the past five years, reveals that the founders of a majority of these companies are white men.

The automation problem, as many South Africans perceive it, is about how to protect existing jobs as well as expand new job opportunities while at the same time embracing the 4IR. While this may seem like a reasonable objective, in truth it embodies a conceptual contradiction because embracing the 4IR necessarily encompasses accepting the idea that automation reduces human involvement in jobs. This has clear policy implications for how we plan for a future where fewer people will be employed in permanent salaried jobs.

And while there certainly is some merit in the argument that every new industrial revolution introduces hitherto unheard-of jobs to absorb the army of job-seeking workers, the reality of the current technological revolution is that new jobs will be created higher up in the value chain in companies that require significantly smaller workforces. Consider the fact that WhatsApp employed a total of 55 people when it was sold to Facebook for $19-billion in 2014.

Currently, there seems to be an expectation in SA that the gig economy will offer relief to those destined to lose their jobs to automation. This view overstates the idea that people can make a living from gig work created by platform companies and is at odds with the global perspective, which is more attuned to the recognition that the gig economy is turning out to be highly exploitative.

Emerging evidence suggests that platform capitalism also mutates in high-inequality economies to exploit vulnerable workforces in a manner that supports the prevailing economic status quo. We see this in how Uber has adapted its model to SA’s inequality.

It is evident that the 4IR presents multiple challenges to the expansion of SA’s black middle class. At the same time, the squeeze on the middle is real and also part of a global crisis of labour force polarisation. There’s a lot of attention being paid to the issue of polarisation in advanced economies where sanctuaries of first world stability with vast middle classes driving consumptive economic growth are suddenly looking less secure as a result of automation.

Given our crisis of poverty, South Africans appear ill at ease about a focus on the middle class. However, it should also be pointed out that the expansion of SA’s middle class is not just important for economic growth; it is also linked to our project of redress because the social mobility of black South Africans was purposefully blocked during the apartheid era.

With evidence already pointing to a racial fault line developing between those who are able to capitalise on the opportunities of the 4IR and those who are being exploited by it, we must act decisively to identify bold new solutions to avoid a situation where people get left behind again. This demands a re-alignment of our values as a society.