10 Million UK jobs at risk
Plenty of people may not have heard of the retail firm Shop Direct. Its roots go back to the distant heyday of catalogue shopping, and two giants of that era, Littlewoods and Great Universal Stores. Now it is the parent company behind the online fashion brand Very and the reinvented Littlewoods.com. All this may sound innocuous enough. But in two areas of Greater Manchester, Shop Direct is newly notorious.
Until now, what the modern corporate vernacular calls “fulfilment” – in other words, packing up people’s orders and seeing to returns – has been dealt with at three Shop Direct sites, in Chadderton and Shaw, near Oldham, and in Little Hulton, three miles south of Bolton. But the company now has plans to transfer all such tasks to a “fully automated”, 500,000 sq ft “distribution and returns centre” located in a logistics park in the east Midlands. The compulsory consultation period begins tomorrow, and the shopworkers’ union Usdaw and local politicians are up in arms: if it happens in full, the move will entail the loss of 1,177 full-time posts, and 815 roles currently performed by agency workers; on the new site there will only be jobs for about 500 people. At a time when apparently low unemployment figures blind people to the fragility and insecurity of so much work, the story is a compelling straw in the wind: probably the starkest example I have yet seen of this era of automation, and the disruption and pain it threatens.
Every time a self-service checkout trills and beeps and issues the deathly cry “unexpected item in the bagging area”, it points to the future. So does the increasing hollowing-out of British high streets. But much of the looming wave of automation in retail and so-called logistics is hidden in the increasingly vast distribution centres, and the research and development departments of online giants. Inevitably, no one employed by these companies is comfortable talking about an imminent decline in human employment across the sectors in which they operate, and the accelerated growth of individual firms – exemplified by Amazon, which now employs 500,000 people around the world, up from 20,000 a decade ago – gives them plenty of cover. But the evidence is plain: the buying, selling, and handling of goods is rapidly becoming less and less labour intensive.
Carl Benedikt Frey, an automation specialist at the Oxford Martin School, says: “Retail is one industry in which employment is likely to vanish, as it has done in manufacturing, mining and agriculture.” In 2017 an exhaustive report he co-authored showed that 80% of jobs in “transportation, warehousing and logistics” are now susceptible to automation.
In both these connected fields, the replacement of human labour by technology is driven by the e-commerce that shifts retailing from town and city centres to the vast spaces where machines can take over all the picking and packing – and in the UK, shopping habits have obviously moved hugely in that direction. The extent to which this makes jobs vulnerable is obvious: the share of total British employment in the wholesale and retail trade towers over all other sectors of the economy, accounting for 15% of UK workers, as against only 7.5% in manufacturing. Across the economy as a whole, a report last year by PricewaterhouseCoopers said that the jobs of more than 10 million workers will be at high risk from automation over the next 15 years.
Technology once considered expensive and exotic is already here. Around the world, Amazon now uses about 100,000 “robot drives” to move goods around its distribution centres. The warehouse within the new John Lewis “campus” near Milton Keynes has been described as a “deserted hall of clacks and hums”. It employs 860 robots and keeps the human element of shifting stuff around to an absolute minimum. Last year Credit Suisse looked at the patents the online supermarket Ocado had recently filed and concluded that the company – which, among other things, is working on driverless delivery vehicles – was pushing into “an automated future” in which half of its staff could be gone within a decade (even now, it operates a much less labour-intensive service than its rivals).
And so to the really terrifying part. Given that it will be disproportionately concentrated on low-wage, low-skill employment, this wave of automation inevitably threatens to worsen inequality. There are whole swathes of Britain where, as employment in heavy industry receded, up went retail parks and distribution centres. In such places as south Wales and South Yorkshire, the result has been an almost surreal, circular economy in which people work for big retail businesses to earn money to spend in other retail businesses. What, you can only wonder, will happen next?
If we are to avoid the worst, radical plans will be necessary. The insecurity that automation brings will soon demand the comprehensive replacement of a benefits system that does almost nothing to encourage people to acquire new skills, and works on the expectation that it can shove anyone who’s jobless into exactly the kind of work that’s under threat. In many places, the disruption of the job market will make the issue of dependable and secure housing – if not questions of basic subsistence – even more urgent. In both schools and adult education, the system will somehow have to pull as many people as it can away from the most susceptible parts of the economy, and maximise the numbers skilled enough to work in its higher tiers – which, given the current awful state of technology and computing teaching, looks like a very big ask.
On the political right, there is no serious interest in anything resembling this kind of agenda: one of the many tragedies of Tory austerity is that it blitzed the chances of any meaningful responses to automation just as its reality became clear; and Conservatives still seem either asleep, or chained to the kind of laissez-faire Thatcherism that offers nothing beyond the usual insistence that the market is not to be bucked. Some of them should read an overlooked report by the independent Future of Work commission convened last year by the Labour deputy leader Tom Watson – spun with the Panglossian claim that “robots can set us free”, though a lot of its analysis was spot on. It contained bracing predictions about the future of such “low-skill, low-pay sectors” as transport, storage and retail, and warned that “Britain’s former industrial heartlands in the Midlands and north are more vulnerable … because of a concentration of jobs in risk sectors. So, without policy intervention, the technological revolution is set to exacerbate regional inequalities.”
There are signs that such things are now on the radar of senior Labour politicians – as with Jeremy Corbyn’s acknowledgment last year that automation “could make so much of contemporary work redundant”. But beyond rather dreamy talkof “putting the ownership and control of the robots in the hands of those who work with them” and commendable plans for a national education service, not nearly enough flesh has been put on these bones – perhaps because the conversation about automation is often still stuck in the utopian wilds of a work-free, “post-capitalist” future.
What does the left have to say to all those Shop Direct workers in Shaw, Chadderton and Little Hulton? How will it allay the fears of the thousands of other people likely to be faced with the same experience? Put another way, if the future is already here, what now?
• John Harris is a Guardian columnist