At current low levels of unemployment, companies face a decision: invest more in capex and software as the cost of labour rises, or retrain workers. Both could happen concomitantly. The synergies could be substantial.
Amazon is a clear example. The tech giant has announced that it will spend $700m to retrain a third of its workforce by 2025.
At the same time, investment in intellectual property products across the US is at records highs as a share of real GDP and has recorded double digit q/q annualised growth rates in four out of the last five quarters.
Many economists and social commentators have consistently derided the positive effects of automation, instead preferring to focus on the ‘robots will take all of our jobs’ narrative. However, it is telling that those same companies that are at the forefront of innovation are at the same time the first to acknowledge – and offer – the requirement for new skills to meet the demands of the fourth industrial revolution.
Workers at the bottom of the pay and job-skill spectrum are already benefitting from this sustained economic upswing. The smoothed y/y rate for median wages for workers with a high school qualification or less climbed to a new post-07/08 high in June.
