Madison jobs won’t be taken over by machines any time soon

Reports find Madison ranks low nationally for job automation, though many white-collar jobs are increasingly being performed by machines.

A new study from Commodity.com looking at the transition to computerized — or automated — work in the United States finds that 43.7% of Wisconsin workers, or 802,690  professionals, are at high risk of becoming automated. An additional 22.0% are at medium risk, while 34.2% are deemed low risk. Out of all U.S. states, Wisconsin has the 18th highest percentage of workers at high risk of having their jobs become automated.

Digging deeper into the report, 37.1% of Madison metro area workers are at high risk of having their jobs become automated. An additional 22.5% are at medium risk, while 40.3% are deemed low risk. Out of all midsize U.S. metropolitan areas, Madison has the fifth lowest percentage of workers at high risk of having their jobs become automated.

An Oxford University study calculated the probabilities of various occupations becoming automated in the future. In the study, occupations at high risk of automation are defined as those jobs with probability scores of 0.7 and higher. Occupations with higher probabilities of automation can also be interpreted as being more likely to be automated sooner. Analyzing data from the BLS, researchers at Commodity.com calculated the percentage of jobs in U.S. states that are at high risk of automation and ranked them accordingly.

In the last few years, it has become more common to order food from a kiosk, see machines cleaning airport floors, and talk to a chatbot instead of a customer service agent. The COVID-19 pandemic has accelerated the adoption of these technologies as well as others, many of which can be used to perform tasks that humans used to do. Machines do not call out sick or spread disease and can replace workers to aid in social distancing. While some jobs and tasks, especially those that require creativity and interpersonal skills, are not conducive to automation, many others are. According to data from the Bureau of Labor Statistics and Oxford University, 42% of U.S. workers are at high risk of automation.

Lower skilled jobs, especially those that involve repetition, are more likely to be automated. A Brookings study on automation’s impact on people finds that jobs in office administration, production, transportation, and food preparation are the most at risk of automation. These jobs are more conducive to automation because they involve either routine, physical labor, or information collection and processing activities. Often these types of jobs are lower-paying, but some jobs at low risk of automation include low-paying personal care and domestic service work.

Data from the Bureau of Labor Statistics, combined with automation risk data from a University of Oxford study, shows a correlation between risk of automation and annual median wages. Gambling dealers, who have a probability of automation of 96%, earn a median annual wage of less than $24,000. On the opposite end of the spectrum, chief executives have just a 1.5% risk of automation and earn a median annual wage of $186,000. Most occupations fall somewhere between these extremes.

While automation will happen everywhere, its impacts will be felt more heavily in some parts of the country than others due to local industry makeup and worker skill set. The Brookings automation study finds that rural communities tend to have a much larger share of tasks that are susceptible to automation than do more populated areas. At the state level, Nevada and South Dakota have the highest share of workers at high risk of automation — defined here as occupations with automation risks of 0.7 or higher — at 48.4% and 46.9%, respectively. Nevada is one of just two states where casino-style gambling is legal state-wide, and gambling dealers are at very high risk of automation.

Interestingly, additional recent research indicates that white-collar jobs are increasingly being taken over by machines — maybe not by robots directly, but certainly facing pressures from artificial intelligence (AI) and machine-learning solutions.

A 2019 Wells Fargo research report predicted that automation would cut around 200,000 jobs from the banking industry by 2019. “The hyper-low interest rate environment of the past decade-plus has squeezed banks’ margins to exceptionally tight levels, and given their biggest expense categories is employees, it is no surprise that they are looking for ways to reduce those costs,” notes a Nasdaq report.

The COVID-19 pandemic likely accelerated up the shift toward increased levels of automation. Sales of automation software are expected to rise by 20% this year, after increasing by 12% last year, according to the research firm Gartner. And the consulting firm McKinsey, which predicted before the pandemic that 37 million U.S. workers would be displaced by automation by 2030, recently increased its projection to 45 million.

Further, according to a recent World Economic Forum report, 80% of business leaders are accelerating the automation of their services in response to the pandemic, with 43% expecting new technologies to reduce their workforce. Nearly eight in 10 corporate executives surveyed by Deloitte last year said they had implemented some form of robotic process automation. Another 16% said they planned to do so within three years.

Still, not all jobs will be so easily automated. A recent report on U.S. employment from CommercialCafe looked at task-automation compatibility across white-collar occupations and homed in on the white-collar jobs in the U.S. that are least compatible with task automation. What the report found is that 60% of U.S. white-collar jobs — which are 86% of all U.S. jobs — are less than 50% compatible with automation. The least-automatable white-collar U.S. jobs are in education, health care, counseling, arts, science, and engineering occupations.

In Wisconsin, white-collar jobs accounted for 32% of total employment in 2020, and 14% of that was in occupations that are at least 50% compatible with task automation. The five office-using occupations that were most compatible with task automation in Wisconsin in 2020 were library technician; agricultural and food science technician; tax preparer; cargo and freight agent; and procurement clerk, each with 97% compatibility with task automation. Meanwhile, the least-compatible occupations in the state were secondary school career/technical education teacher (0%); postsecondary nursing instructor and teacher (0%); lodging manager (1%); postsecondary art, drama, and music teacher (1%); and clergy (2%).

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