Once, not so many years ago, it was thought that automation would lead to more leisure time and more time to pursue education and other intellectual endeavours. But this has not happened. Automation has benefitted the owners of the technology and their financiers, but not those who have been replaced.

The conventional thought is that as technology displaces jobs, new jobs will open up in sectors created by that very technology. An example often quoted is that while robots may replace humans, in building cars for example, people are still needed to programme and maintain them. However, the new jobs are far less numerous than those lost.

The chart below tells the story for the US oil and gas industry.

O&G_employ

Chart Courtesy Zero Hedge

One of the main reasons for reduction in crew per rig is the “iron roghneck” (below), which automates connecting and disconnecting drill pipes. It is expected that a 20-man crew will end up being five men. Those 15 men will now have to find work in another industry, perhaps as a barista or barman. The future for employment is grim.

Iron-Roughneck

 

17 November 2017 Markets