The talk in the economics profession is that there is a serious probability that automation and the robot economy are and will continue to have a significant impact on jobs. Of course it is only natural that new innovations will replace old technology, and jobs are forever being ‘reinvented.’ Indeed we don’t have to look further than the rapid demise of music tapes and videos (and video rental shops), which were quickly replaced by DVD’s; which are in turn being displaced by online (streaming e.g. by Netflix and downloads e.g. by iTunes).
There are so many examples of technology quickly advancing as the old makes way for the new. And clearly this has and always will impact industries and jobs. One area that is often overlooked is the impact of women in the robot economy.
Could one of the reasons that the rise in profits of corporations and ‘decline’ in wages against GDP be because there are more women than men in the workplace and male-female earnings gap of prime-aged, full-time employees has, in many cases; “an earnings disadvantage of women of 20 percent and more.” In other words women typically earn 20% less than men in the workplace.
That’s according to a December 2013 paper (Returns to skills around the world) covering 22 countries by the OECD and prepared by Eric A Hanushek (Hoover Institution, Stanford University, CESifo, and NBER); Guido Schwerdt (University of Siegen, CESifo, and IZA); Simon Wiederhold (ifo Institute at the University of Munich); and Ludger Woessmann (University of Munich, ifo Institute, CESifo, and IZA).
By some estimates, in the 22 countries assessed there are 51% women in full time employment versus 49% men. See also the following International Labor Organization chart:
Let’s now take (a crude) look at 1 company who has a major commitment to digitizing and automating its business.
AXA Group’s global gender balance is 52.3% women and 47.7% men.
Whilst the number of employees declined by 5.4% (3,537 less employees) between 2010 and 2012, during the same 2 year period AXA’s profitability grew by approximately $2 billion and its profit per employee from $38,191 to $59,842. Note its asset management business grew nominally, with main growth coming from P&C business. That’s significant, almost 56% growth in profitability with 5.4% less employees. How much of that can be put down to technology is anyone’s guess but the company does employ some 7000 people in its services and technology center and has recently announced the launch of a research lab in Silicon Valley to improve its use of technology.
I am not by any means indicating that AXA has a different pay scale for women than it does for men, in fact I understand that they have equal pay scales irrespective of gender, and are committed to equal rights across the group, although many of the women employed are in less senior positions. Male executives account for 73.7% of employees versus 26.3% of female executives and males account for 59.5% of managers versus 40.5% of managers being women.
Effectively there are more women in lower paid jobs than men.
The pattern is repeated globally where women make up more of service sector jobs, retail assistants, clerks, call-centers, hospitality industry, and other critical services such as nursing and care, etc., areas where wages are typically and historically lower.
Conversely the number of women working in technology companies or technology and science or engineering positions is low, and these are sectors that are seeing wages rise. For example approximately 24 percent of Microsoft’s global employees are women – a company that strongly promotes equality and diversity inclusion. Women are getting only about 18 percent of the bachelor’s degrees in computer science and engineering degrees. This is alarming, especially as the tech sector grows and spreads through every sector of the economy. By 2015, about 900,000 information and communications technology vacancies may go unfilled in the European Union, the European Commission warned in a recent report on the digital economy.
The fact of the matter is that despite the lower wages versus GDP growth that we are seeing in the world today, a significant percentage can be attributed to the inequality of women in the workplace or women taking more of the lower paid jobs.
Women have become more educated, more ambitious, and they do face less discrimination by many employers; but is the training women are undertaking matching the skills needed to meet the requirements of the new economy? At least one economist believes that the future for women is better than for men.
Writing in Average is Over Professor Tyler Cowen indicates that there will be:
“Better jobs and higher wages for a lot of women in this new world of work.”
I believe there are many opportunities for both females and males. In a recent report the International Labor Organization has indicated there will be: “employment growth… in the green economy, health care services and information and communication technology sectors.”
Sectors many will be wise to retrain in to avoid a skills mismatch and increase the prospect of reducing the inequality gap.
An important paper on related topics is Paul Beaudry and Ethan Lewis, “Do Male -Female Wage Differentials Reflect Differences in the Return to Skill?
Note there are discrepancies in the number of employees reported in AXA’s annual report compared to their HR Data in their published Corporate Responsibility report. For the purpose of this analysis I have used all data from their 2012 annual report.