Will automation impact purchasing power from employment?

Will automation impact purchasing power from employment?

Will automation impact purchasing power from employment?

Widespread implementation of automation will not necessarily remove the need for skilled labourers, which might have ripples on the nation’s overall purchasing power.

This worry is particularly prevalent in Brooks, Alberta, where an estimated one in three jobs are in danger of being phased out by automation.

However, Brookfield Institute senior policy analyst Creig Lamb assured that this is not a dead certainty.

“The one big thing that I typically focus on is just because a job can be automated does not mean that it will be,” Lamb told CBC News, noting that replacing labour with robots will entail significant costs in terms of tech adoption and intensified competition from other industry players.

More importantly, automation itself is expected to create jobs in other previously underperforming sector, or even entirely new disciplines.

“Market forces within the economy overall translate into more jobs being created than lost,” Lamb explained.

“Eliminating jobs might not be our problem. Our problem might be that we don’t adopt automation technology enough to improve our productivity and remain competitive against other international competitors.”

In addition, economic prospects appear very good, as a recession in Canada is not likely this year despite global political and trade tensions.

Earlier this month, Scotiabank vice president and deputy chief economist Brett House said that economic growth will slow down slightly to 1.8% this year, just a tick above the 1.7% observed in 2019.

“Going into 2020, we think it’s going to be another year where the Canadian economy performs in kind of a ‘meh’ sort of way,” House told CTV News, adding that the widespread anxiety surrounding the nation’s economic health is mostly baseless.

“On the other hand, it’s not going to be the long feared recession that a lot of headlines have pointed to either. We have a lot of uncertainty out there … but we also have a lot of fundamental strengths that should keep growth going.”

Said strengths include robust employment figures and indicators of accelerating housing activity – to the point that supply in the largest markets is having trouble keeping up.