Australians are worried about the robot apocalypse.

It's not a Dr Who Dalek-style invasion by robots that concerns us. Instead, it's robots we usually aren't even aware of.

These are the robots that will take millions of jobs in the coming years. Already they are taking over physical tasks such as driving trains, operating factory machines and building houses, and they are starting to take over office work as well. These invisible office 'robots' are essentially pieces of computer code that automatically carry out tasks and make decisions that people use to.

The tasks they carry out are often repetitive and mundane, but they provide work and income and, in many cases, entry-level jobs.


In auditing, for instance, graduate accountants would once pore over a company's accounts to spot anomalies. Robots can now check these vast amounts of data in a tiny fraction of the time it would have taken a team of people. They are cheaper, faster, don't make mistakes or get tired, and can learn on the job.

Some argue automation leaves workers free to spend more time on higher value, more interesting and creative tasks. That's fine in theory, but why would we suppose there will be an increased demand for this kind of work?

Instead, it will almost inevitably lead to job losses. Certainly Australia's Council for Economic Development believes so.

In economic modelling from a couple of years ago, CEDA found almost five million Australian jobs - around 4 per cent of the workforce - face the high probability of being replaced by computers in the next 10 to 15 years.

Jobs that involve low levels of social interaction, low levels of creativity, or low levels of mobility and dexterity are more likely to be replaced by automation.

It raises the question of what sort of society we have if many jobs disappear. Do we end up in some sort of utopia, where we all work three days a week and maintain the same living standards?

That seems unlikely. Even for those who still have jobs won't do well. CEDA said computers will disrupt the way work is conducted, expanding competition and reducing the costs to consumers "but also reducing the income of workers".

We risk ending up in a society where full-time, high-paying jobs go to a lucky few, usually the best educated and the best connected. The rest will either have poorly-paid work or no work at all. Already some people are struggling to pull together a weekly income from a collection of odd jobs.


It's a problem the Australian government will have to confront in the coming years, as will other governments in advanced economies.


Unemployment is low in Australia but workers are not receiving the benefit of a tight labour market.

Wages growth remains stuck at a record low of under 2 per cent a year, barely matching cost of living increases.

The slowing in wage growth occurred alongside faster growth in labour productivity, which means companies are producing more for lower labour costs but workers are not sharing in the spoils.

Wages growth is usually subdued when unemployment is high, but in Australia the unemployment rate is just 5.6 per cent. However, this statistic belies the large number of people who have jobs, but not enough work, the so-called 'underemployed'. They might be only have part-time jobs or might not be getting the lucrative overtime hours they would like.

Many will be participating in the 'gig economy', where they don't have permanent or full-time roles and instead pull together their weekly wage from a range of odd jobs and short-term assignments.

The underemployment rate is running at 8.7 per cent, and this excess capacity in the labour market is a key factor in keeping wages growth subdued.

The low wages growth primarily hits workers, of course, who notice that the weekly pay packets don't go as far, but they will spill over into other parts of the economy. The government will collect less tax revenue and retailers will have slower sales growth, if any at all. But perhaps of biggest concern is that Australian households will have less capacity to pay off their record debt.

The Reserve Bank of Australia has highlighted how indebtedness is a major risk to the economy and how households are very vulnerable to any rise in interest rates.