Job Loss: Offshoring and Automation

A report from Ball State correlates low education and low salaries with projected job loss.

Communities where most residents have only high school degrees or earn low salaries are at risk of losing many jobs to automation and offshoring, says a new report from Ball State University in Muncie, Indiana. The study found that low risk of automation is associated with much higher wages, averaging about US$80,000 a year. Occupations with the highest risk of automation have annual incomes of less than $40,000. The report was prepared by the Center for Business and Economic Research (CBER) and the Rural Policy Institute’s Center for State Policy at the school.

Automation could replace half of all lowskilled jobs, says CBER director Michael Hicks, while roughly one in four of all American jobs is at risk from foreign competition.

“More worrisome is that there is considerable concentration of job loss risks across labor markets, educational attainment, and earnings,” Hicks says. “This accrues across industries and is more pronounced across urban regions, where economies have concentrated all net new employment in the U.S. for a generation.”

In addition, the paper identified the workers whose jobs are most vulnerable to offshoring, including computer programmers, data entry keyers, electrical and electronic drafters, mechanical drafters, and computer and information research scientists. Those most vulnerable to automation include data entry keyers, workers in mathematical sciences, telemarketers, insurance underwriters, and mathematical technicians.

By contrast, workers whose jobs are least vulnerable include recreational therapists, emergency management directors, mental health and substance abuse social workers, audiologists, and first-line supervisors of mechanics, installers, and repairers. “Both trade and automation-related economic growth are hallmarks of a vibrant economy,” says Hicks. “But the social and political unease that accompanies large shocks felt by the workers is real.”

Read “How Vulnerable Are American Communities to Automation, Trade and Urbanization?.”