In Whakatū, unemployment arrived suddenly on October 10th, 1986. That was the day the freezing works closed, putting 2160 people out of work. The financial strife was real; families suddenly struggled to pay rent and buy groceries. Unemployment benefits and redundancy payments helped a little, but the problems created by sudden unemployment went far beyond lost income.

Working at the freezing works had given people a sense of purpose, structure, and community. There had been sports days, picnics, hāngis, and after work drinks with mates. Researchers found that workers keenly missed the whanaungatanga (kinship) that they had enjoyed there. Never again, people recounted, would they lead up to Christmas by singing carols in full voice with hundreds of their workmates as they worked the production line.

In the eight years following the closure, a team of researchers from the University of Otago found that there was double the risk of serious self-harm for those made redundant compared with workers at a nearby freezing works that did not close. Older Māori men were noted as particularly vulnerable to depression. These results are mirrored in overseas research, including a study in Germany that found that people never got back to the level of life satisfaction they had before unemployment—even after being re-employed. Another study found that long periods of unemployment can be harder to recover from emotionally than the death of a spouse.

Thirty-three years later, headline after headline suggests we might be heading for sudden unemployment, much like in Whakatū, but at a vastly larger scale. “Robots threaten millions of jobs,” “Al- most half of NZ jobs at risk of automation—will you lose yours?” and “Invasion of the robot workers.” One study found that 46% of New Zealand jobs were at high risk of automation by 2035.

The consequences of massive unemployment would be devastating to individuals, families, and communities. Any threat like this demands our attention. Yet it is easy to feel hopeless when it comes to facing—let alone influencing—what may be coming.

To get a grip on it we need to ask two related questions. First, are these headlines and studies giving us a clear and accurate picture? And second, is it possible for us to shape our future, and avoid the devastating consequences that we saw in Whakatū repeating on a nationwide scale?

I’ve spent quite a bit of time trying to get to the bottom of these questions, and this year released a book—Jobs Robots and Us: Why the Future of Work in New Zealand is in Our Hands—for which I travelled up and down New Zealand, discussing my findings in schools, businesses, and public meetings. I learned that there are important challenges ahead, but to meet them we need to be clear about what the risks are, and understand the very real opportunities we have to shape the future we want to live in.

Robot Head
Drone Pizza
Protest Sign

First, automation and job losses are not quite as scary—and definitely not as fast—as we are often told. We need to remember that for technologies to affect us at work they have to make it out of the laboratory, become commercially viable, and move into widespread use in homes and businesses across New Zealand. And if there is a lesson from the history of technological adoption it is a simple one: technology adoption is often slower and more difficult than expected.

All the excitement about driverless cars can make it feel like the idea has come out of nowhere, but the first driverless car was nipping around a busy Parisian motorway way back in 1994. Similarly, the first solar panel was on a roof in New York turning the sun’s rays into electricity in 1884. Yet today, 135 years later, just 1.6% of global energy production comes from solar conversion. It’s easy to assume we’d be getting faster at adopting new technology, but the McKinsey Global Institute concludes bluntly that “there is no evidence that technological adoption has yet accelerated over the last 60 years.”

Strangely the vast majority of studies that claim as much as half of our jobs are at high risk of being automated simply ignore the question of whether, and how long it might take, for technologies to be adopted. Researchers and writers tend to focus only what might be technically possible. This usually means asking if a machine somewhere in a well-resourced laboratory could do it, not whether machines can do it at a cost that is competitive with alternatives, nor if people will want to use the technology, nor if regulators will allow it, nor if entrenched interests can be overcome. Ignoring the question of cost is perhaps the worst omission. Put differently, what these studies are really saying is that all these jobs would be at high risk “if cost were no object.”

Moving in any direction will take time. And there is a very real danger that we might not get started early enough or be serious enough about it to do so.

Change is coming to the world of work. But technology adoption is something that we as New Zealanders can influence—to speed it up or slow it down and to affect the type of technology we get. The priorities of our laws and our Government’s decisions around policy and regulation make a big difference. The pizza chain Dominos chose New Zealand to deliver the first ever pizza by drone (cranberry and chicken) because New Zealand “had the most forward-thinking aviation regulations.” If we want drones and driverless cars in New Zealand quickly, a permissive set of laws would help. If we don’t, regulation can slow it down and limit it.

The way our tax system incentivises certain types of investments and spending also deeply influences what happens to automation.
In New Zealand and in many other countries if you spend money on technical innovations like machinery you get an easy ride or even subsidy, while human workers are taxed more heavily. Making invest- ing in machines cheaper can help generate much needed productivity improvements, but too big a difference between the taxation of workers and machines could push businesses to focus heavily on simply replacing workers with machines, rather than augment- ing workers with new technologies to be more productive. Daron Acemoglu, a leading professor at the Massachusetts Institute of Technology, has even sounded the alarm about the risk of skewed tax policy generating “excessive automation” that makes the economy collectively smaller and less productive than it would be with less automation. Yet there is nothing inevitable about this. Which technologies are adopted, and how fast, depend a lot on the laws and choices our elected politicians make and, by extension, the choices we as citizens and voters make.

It’s important to keep in mind that not all kinds of innovations have the same impact on workers. Some tend to eliminate workers, others create jobs. The invention of the personal computer, for example, created a huge array of new jobs—from computer manufacturers to programmers and data scientists. Other innovations, however, aim primarily to help us do something we already do, just with fewer workers. For example, artificial intelligence powered bots answering customer phone calls reduce the number of workers needed per customer query. That has its benefits in efficiency, but does little for employment.

The consequences of massive unemployment would be devastating to individuals, families, and communities. Any threat like this demands our attention.

What kinds of technology are we creating and adopting in New Zealand? If we want a future of high employment, we need to push our innovators and researchers—both public and privately funded—to focus on developing and adopting market-creating technologies that generate jobs not just eliminate them. Rocket Lab, for example, is developing a whole new space industry in New Zealand, creating new valuable high-tech jobs. If we want more of this, our public spending on research and development should, at a minimum, be required to take into account whether the technologies supported will generate jobs or eliminate them.

Even with this eye to technology’s impact on employment, we can’t ignore that innovation will eventually produce sunset industries. So we need to make sure our welfare and education systems are flexible and robust enough to support people through job transitions so they can get well-paid jobs in the future. The three countries in Europe where the public is most positive about automation are Sweden, Denmark and the Netherlands. It’s not a coincidence that they all have strong welfare states. Sweden also boasts “job security councils” supported by unions and businesses (who also fund them) which support retraining and job-search for workers as soon as they learn they will be laid off. Denmark boasts a sophisticated and well-resourced system for adult retraining and job search as part of its “flexicurity” approach.

These big new ideas can seem audacious, and even unrealistic in scope. After all, actions have costs, trade-offs, and political challenges. Yet we sometimes forget that we in New Zealand have a track record of doing big hard things to shape the kind of country we live in. In 1936 we took a radical step to shape our society and economy: we gave everyone two days off a week. Weekends were and are a collective decision. Then in 1938 the First Labour Government introduced a universal income for everyone over the age of 65. Today it is called superannuation and it to is a bold statement about the kind of society we want to live in. Around the same time we introduced free secondary education, established universal healthcare, and created an unemployment benefit. In short, we shaped the future we wanted to live in.

That too is the task before us today, because there will be real changes to the world of work. And if we don’t act to shape it positive- ly in the limited window we have today, it could be very ugly indeed: underemployment, growing inequality, loss of purpose and meaning. Moreover, a failure to proactively shape the future of work in a green direction could also worsen climate change. New technologies will likely increase how much we produce per hour and therefore, if we all keep working full time, will increase how much stuff we as a country produce. The trouble is that in New Zealand overall, producing more goods and services has always resulted in more greenhouse gas emissions.

Parliament

Yet as I’ve suggested here, and describe in much greater detail in the book, we really can influence how the future develops to avoid these dangers, including tackling climate change. And of course there are also radically different futures out there that we could try to move toward. But moving in any direction will take time. And there is a very real danger that we might not get started early enough or be serious enough about it to do so. Instead we might drift into that much uglier future.

Why might we fail to even try to shape the future? The first reason could be that we simply don’t know about the risks of job losses or unemployment from rapid technological change. A Massey University and AUT study of New Zealanders found that 87.5% of New Zealanders either disagreed or disagreed strongly with the statement that “Smart technology, artificial intelligence, robotics or algorithms could take my job.” While there is some uncertainty over what time frame respondents thought they were being asked about, could it be that despite all the headlines many of us simply don’t believe there is a risk ahead? If this is the case then, paradoxically, more alarmist head- lines—despite their tendency for exaggeration—might actually help.

There will be real changes to the world of work. And if we don’t act to shape it positively in the limited window we have today, it could be very ugly indeed.

Unfortunately, learning about the issue primarily through alarmist studies can easily leave people with hopelessness. In my talks in towns across New Zealand it was common to receive comments or questions that were fatalistic in nature: “we can’t do anything any- way.” This seemed to reflect a wider sense of hopelessness about our ability to shape our future in New Zealand in any number of fields. My observations are anecdotal, but this echoes public feeling on another major long-term issue: climate change.

A recent poll found that while New Zealanders are much more concerned about climate change than they used to be but only 33 percent think New Zealand will reach its current emissions targets and only 32 percent think we will be able to reduce the impacts of climate change on homes, businesses and communities. Only half of those surveyed said they knew what they needed to do to tackle climate change.

Robot Desk
The problems facing our society are changing; our methods of responding to challenges must be open to change as well.
Collab Robot

The second reason we might fail to act therefore, is a sense of powerlessness. This is why it is so important to keep in mind both a nuanced sense of the scale and speed of the challenge and the fact we can influence in many ways how the future of work might actually look.

In my talks around New Zealand, I also found many reasons for optimism about our potential for positive influence. While some were fatalistic, there were notable and positive exceptions: parents and young people themselves are already deeply engaged with issues on the future of work and are motivated to take charge of their future. I spoke at secondary schools where I was often warned by teacher that the students were a bit shy and may not have questions. Instead, students were easily the most engaged audiences I spoke to—and asked question after question until we ran out of time. David Brougham of Massey University and Jarrod Haar of Auckland University of Technology similarly found that younger workers are far more aware of the potential for technological change to affect their working lives than older workers are. To meet these challenges young people need to participate not just in public demonstrations but also directly in decision making about the future. That means young people joining political parties and running for office, writing submissions and signing petitions, and engaging in grassroots policy debates. It also means older generations taking these voices and their concerns seriously. The problems facing our society are changing; our methods of responding to challenges must be open to change as well.

Yet we cannot leave it all up to young people. Age should not be an excuse for ambivalence about the future. All voters should be prepared to ask representatives what they’re doing to prepare for the future of work. How are they using the resources and policies of local and central government to support innovation for new jobs, to help families through work transitions, and to give everyone, no matter their background, a decent chance in a changing economy?

After all, the lessons of the past in places like Whakatū are clear, no matter your years. If we could go back in time to the late 1970s and show the political and business leaders of the day what would happen in Whakatū in 1986, we would surely demand they do far more to mitigate the pain and damage. We would urge them to do more to create new jobs in new industries for workers to move into. And we would expect that they provide much better support for workers and families to transition into those new opportunities—including mental health support. Today, with change to work on the horizon once again, we as a country have the responsibility to do much better than we managed in Whakatū. As I’ve argued here and in my book, we really do have the opportunity to build the future we want and to make work, work better for more New Zealanders. But to do so, we need to both recognise the future is ours to shape—and start now.

Kinley Salmon

Kinley Salmon

Kinley Salmon grew up in beautiful Nelson and now works as an economist in Washington D.C. He previously worked as a consultant at McKinsey and Company and has written for The Economist. Kinley holds a Master's in Public Administration in International Development from the Kennedy School of Government at Harvard University and is the author of Jobs, Robots & Us: Why the Future of Work in New Zealand is in Our Hands, published by Bridget Williams Books.

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