December 1, 2020 – Key demographic groups are more vulnerable to job loss through automation than average, according to a C.D. Howe Institute report supported by the Diversity Institute at Ryerson University and the Future Skills Centre.
In "The Next Wave: Automation and Canada’s Labour Market," author Rosalie Wyonch assesses the likely impact of technological automation on Canada’s labour market and compares these results to past predictions. She finds a lower proportion of employment at high risk of automation (about 22 percent) than most previous estimates. However, key demographic groups, like Black and Indigenous individuals, are more susceptible to job loss depending on their occupations.
“Unfortunately, these same vulnerable groups are being especially affected by COVID-related job losses on top of the threat of automation,” says Wyonch. “The need to physically distance and the disruption to business practices caused by COVID-19 restrictions will likely result in an increase in automation in the short term.”
There are some occupations that are obviously highly automatable, notes the author, and many are being automated already – gas station attendants, bank tellers and store cashiers, for example. There are others that are quite obviously not automatable due to a particular human element or specialized set of skills – neurosurgeons or detectives, for example. Most occupations are not fully automatable but they are not completely immune from automation either. The occupations that are more likely to be automated generally contain more well-defined tasks and repetition, such as those in manufacturing.
Occupations in health, law, education and community, and government services are the job types least likely to be automated, she finds. Those in agriculture, natural resources, utilities and manufacturing are more susceptible to automation.
According to updated projections in the report, about one in five Canadian workers are employed in a job that could theoretically be automated. By 2028, projections indicate that employment in these occupations will decline by only about 90,000 jobs. Meanwhile, jobs that are only somewhat susceptible to automation (medium risk) make up about 40 percent of current employment. This proportion is projected to decline slightly to about 37 percent by 2028. These projections indicate that the labour market has been adapting to technological change over time and is likely to continue along a similar trajectory.
However, the author’s analysis of automation susceptibility by individual characteristics indicates that:
- Black and Indigenous Canadians are employed in occupations that are highly susceptible to automation in higher proportions than the population average. It is likely that the relatively higher susceptibility to automation is related to the worse average employment outcomes of Black and Indigenous people relative to the Canadian average.
- Men, women and immigrants, however, face a similar average risk from automation. Women are more likely than men to be employed in occupations that are either low or high risk, as opposed to medium risk; but average risk is similar between genders.
- Women are at higher average risk of losing their jobs to automation when working in business, finance, administration, manufacturing and utilities occupations. Men in education, law, social, community and government services occupations are at a slightly higher average risk of automation.
- The risk of automation also changes with age: young workers, 15 to 24 years of age, are more likely to be employed in occupations at a high risk of automation, while those aged 55 to 64 are the most likely to be employed in occupations with a low risk of automation. Workers aged 15 to 24 are more likely to be employed part-time and are likely actively acquiring new knowledge and skills through education. With the exception of arts, culture, recreation and sports-related occupations, younger workers are employed in occupations more likely to be automated. Older workers, those 55-to-64 years of age, are less likely to be automated if they are employed in business, finance, administration, sales and customer service occupations.
The author writes the inequality effects of automation could be indirectly addressed through education and labour-market policies that target inequality more broadly. The higher risk of automation for Black and Indigenous Canadians is more likely related to prevailing labour market gaps than to automating technologies specifically. The results do, however, suggest that technological change is likely to affect Indigenous and Black employment, particularly those in sales, customer service, law, education, social, community and government service occupations.
Overall, the author finds that Canada’s labour market has been adapting quite well to technological change and that the risk of significant technology-induced unemployment remains low for the near future. This suggests that government should be moderating technological change’s negative effects for those that are affected in the short term. Existing policies that provide job training and income support for unemployed and low-income people provide a buffer against economic hardship (technology-induced or otherwise).
However, with growth in non-standard employment, traditional income- and employment-support policies may not be available to all workers affected by automation. The Canada Emergency Response Benefit (CERB), an emergency income support program for individuals affected by the COVID-19 pandemic, was in part created to address coverage gaps in Employment Insurance. Following the current crisis, the government should analyze the effects of CERB and recent changes to EI and use insights from the natural experiment to continue to refine Employment Insurance and address the income and employment support gaps revealed by COVID-19.
For more information contact: Rosalie Wyonch, Policy Analyst, or Nancy Schlömer, Communications Officer, C.D. Howe Institute, email: nschlomer@cdhowe.org.
This project was supported by the Diversity Institute at Ryerson University and funded by the Government of Canada's Future Skills program.
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.