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The Impacts Of Automation On Jobs.
Brexit Fails: A Disaster Unfolding
Here is what we will be getting into today:
Automation’s Economic Impact
China’s Bounce Back
Let's Dive In!
The Impact of Automation on Jobs: Complementing or Replacing Human Labor?
Automation has been a topic of concern for many years, with reports claiming that a large percentage of jobs are at risk of being lost to automation. Numerous studies have shown that automation often ends up complementing a worker's effort instead of substituting for it. These studies also recognize that new technology leads to the creation of new kinds of jobs. While studies can predict which jobs will be affected by automation, they cannot predict whether it will be a good or bad thing.
The book "Power and Progress" by MIT economists Daron Acemoglu and Simon Johnson challenges the conventional economic wisdom that new technologies always lead to shared prosperity. The authors explore moments in history when technology led to the opposite, such as agricultural improvements that did not benefit peasants and industrial factories that decreased pay and increased working hours. They argue that automation, the most important technological advance since the industrial era, is not about increasing labor productivity but rather replacing it. Automation can decrease jobs and wages if new jobs and tasks are not actively created.
The decline of unions, shifts in antitrust policy, and technological disruption have led to "so-so automation" that mainly decreases costs for employers. Appropriate democratic guardrails are necessary to ensure that technology creates shared prosperity and does not pose threats to democracy and jobs across all income bands.
It is important to recognize that automation can both complement and replace human labor, and that its impact on the labor market depends on how it is implemented. While some jobs may be lost, new kinds of jobs will also be created. It is crucial to ensure that these new jobs are accessible to all income bands and that they provide fair wages and working conditions. This includes measures such as promoting unionization, enforcing antitrust laws, and investing in education and training programs to prepare workers for new kinds of jobs. By doing so, society can ensure that automation leads to shared prosperity rather than exacerbating income inequality and threatening democracy.
Mixed Signs of Recovery in China's Economy
China's exports surged nearly 15% in March, defying expectations and bolstering hopes that the growth target will be achieved. The unexpected jump in exports last month suggested upside risk to China's first-quarter GDP figures. The most important gains came from a surge in new exports, including electric vehicles, lithium, and solar batteries. However, analysts caution that a weaker outlook for global demand means any export rebound is likely to be short-lived. Additionally, the improvement in exports partly reflects suppliers catching up with unfulfilled orders after last year's COVID-19 disruptions. The global demand outlook remains subdued, and analysts warn that the strong export growth is unlikely to sustain given the weak global macro outlook. Negative views of China have prevailed in many countries, with roughly three-quarters of respondents in advanced economies having a negative view of China.
China's property sector has been suffering from a liquidity crisis over the past two years, leading to a reverse wealth effect and potentially years of economic impact. While loan demand has surged to its highest level in over a decade, it remains unclear whether this suggests a resurgence of business confidence or companies borrowing new money to refinance existing debt. Nevertheless, there are signs of recovery in the sector, with new home prices rising at the fastest pace in 21 months in March, following better than expected export figures.
China's central bank kept its one-year medium-term lending facility rate unchanged at 2.75%, suggesting that the first-quarter GDP data was expected to be on target. Beijing's growth target for 2023 is the lowest in decades, and economists have warned of an uneven recovery despite the fledgling signs of improvement in exports and the property sector. One crucial area of concern for the pace of the recovery is the strength of consumer services, a driver of economic and jobs growth for the country of 1.4 billion.
Brexit's Impact on the UK Economy: Lagging Behind Other G7 Nations
Brexit's impact on the UK economy is significant, with the country's goods exports lagging behind all other G7 economies. The IMF predicts that the UK economy will contract by 0.3% in 2023, making it the worst-performing economy in the G7. Business leaders have complained that post-Brexit obstacles to trading with the EU have left UK companies at a disadvantage, and supply chain disruptions, low business sentiment, and stagnation in business investment may also be affecting the country's trade performance.
Business leaders have complained about post-Brexit obstacles to trading with the EU, including red tape, supply chain disruptions, low business sentiment, and stagnation of business investment since the Brexit referendum. Brexit-related mobility issues are permanent and corrosive, with UK export volumes more than 9% below the pre-pandemic average in the last three months of 2022, putting the UK at the bottom of the G7 pack.
The UK is set to introduce its own border checks on goods coming from the EU, which could cause significant issues for haulers and traders who rely on EU supply chains and imports, particularly in the agriculture sector. The effects of Brexit are becoming increasingly apparent, with supermarket shelves thinning and delays at channel ports causing chaos. Despite attempts by Chancellor Jeremy Hunt to revitalize the economy, the cumulative effects of poor growth and declining real incomes have left the UK economy in a dire state, with disastrous export figures and a devalued pound leading to inflation. The UK government's attempts to spin new border processes as a saving to business of £400m have been met with skepticism, and the effects on the food industry are still unclear.
For more analysis on these topics, check out these articles:
Brexit's Impact on the UK Economy
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