What if you’ve been working in a manufacturing job for over ten years. Suddenly, your employer decides to automate most tasks, reducing the need for workers.
You’re left thinking, “How can I make ends meet?” Short-term personal loans can help temporarily, but how will it affect your finances in the long run? According to the World Economic Forum, automation could displace 85 million jobs in the next five years.
Let’s say you earn ₹30,000 monthly, but after being replaced by automation, you might only find gig work that pays ₹20,000. That’s a ₹10,000 shortfall each month! The financial impact of such job disruptions can be harsh, and here’s why.
The Rise of Automation and Its Effect on Wages
When companies automate, it’s often to save on costs, which directly affects wages. Industries like manufacturing and retail have already seen drastic changes. Workers displaced by machines frequently struggle to find similar-paying roles.
Suppose you used to make ₹40,000 in a traditional job. After automation, you might find work that pays only ₹25,000. That’s a 37.5% decrease in income! Many people search for “short-term personal loan” options to fill this gap.
But relying on loans isn’t sustainable, especially when wages in traditional roles keep dropping.
| Sector | Previous Monthly Income (₹) | Post-Automation Income (₹) | Difference (₹) | % Decrease |
| Manufacturing | 40,000 | 25,000 | 15,000 | 37.50% |
| Retail | 35,000 | 22,000 | 13,000 | 37.10% |
| Logistics | 45,000 | 28,000 | 17,000 | 37.80% |
| Education | 30,000 | 18,000 | 12,000 | 40% |
| Healthcare | 50,000 | 30,000 | 20,000 | 40% |
Many workers impacted by automation in traditional sectors like these are taking short-term personal loans to manage their finances, but it’s not a long-term fix.
Job Displacement and Economic Instability
Job loss doesn’t just affect individual income, it impacts the entire economy. For every ₹10,000 a worker loses monthly, local spending decreases, impacting small businesses and service providers. For example, if 1,000 displaced workers lose ₹10,000 each, the local economy loses ₹1 crore in monthly spending. That’s why job displacement is so financially damaging.
In such cases, workers often turn to the gig economy. However, gig work doesn’t offer income stability.
Without benefits like pensions or health insurance, people often find themselves in financial stress. Imagine having an unstable income fluctuating between ₹15,000 and ₹25,000 each month. It’s tough to plan financially, isn’t it?
· Unstable Income: Earnings vary month-to-month, making budgeting tough.
· Lack of Benefits: No pensions, health insurance, or paid leave, leading to extra expenses.
· Fluctuating Hours: Hours aren’t fixed, which disrupts consistent earnings.
· No Job Security: Gig roles don’t promise steady employment.
· Self-Employment Tax: You might pay more in taxes without employer support.
· Dependence on Loans: Many rely on short-term personal loans, but that adds interest costs.
Financial Premium on Tech Skills
The demand for tech skills like AI, cybersecurity, and data science has skyrocketed. Tech roles pay well, with starting salaries around ₹50,000, while traditional jobs might still hover around ₹30,000.
However, the cost of acquiring these skills can be high. Certification programs can cost ₹1 lakh or more, which isn’t affordable for everyone. This gap keeps many traditional workers from transitioning, leading to long-term financial disadvantages.
Long-Term Financial Forecast for Traditional Jobs
Technology disruption could widen the financial gap between tech-savvy individuals and those in traditional jobs. Projections suggest that traditional jobs could shrink by 25% in the next five years.
This shrinking job pool means reduced wages and fewer growth opportunities. If you’re currently in a job paying ₹35,000, the lack of job security might force you to take a pay cut of up to 30% just to remain employed.
Conclusion
The financial impact of technology disruption on traditional jobs is significant and can lead to a less stable economic future for those not in tech-driven roles.
How can you prepare for this change? Will short-term personal loans be enough, or do you need to consider reskilling? These are critical questions for anyone in a traditional job today.
FAQs
1. What is a short-term personal loan?
A short-term personal loan is a small loan to cover immediate expenses, usually repaid within a year.
2. Are tech jobs replacing traditional roles?
Yes, tech jobs are increasingly replacing traditional roles in many sectors due to automation.
3. How does automation affect wages?
Automation often reduces wages by making traditional roles redundant and pushing more workers into lower-paying gig jobs.
4. Can traditional workers switch to tech roles?
Yes, but reskilling can be expensive, and not everyone can afford the cost.