The familiar hum of self-service checkouts and the silent gaze of AI cameras in supermarkets are becoming symbols of a profound shift in the UK jobs market. As hiring in the retail sector collapses, a tech-driven productivity boom is emerging, raising urgent questions about who benefits from these gains and what the future holds for workers.
The Data: A Sharp Decline in Retail Employment
New figures reveal a stark picture for the UK's retail workforce. Vacancies in the sector fell by almost 6% in November, which is traditionally the key hiring month for the festive season. Excluding the Covid-19 pandemic, job openings are at their lowest point in a decade. This decline is part of a longer-term trend, with retail employment collapsing by more than 350,000 roles over the past ten years.
Industry leaders point to a combination of factors squeezing traditional employment models. The British Retail Consortium (BRC) highlights a £25 billion increase in employer National Insurance contributions and higher living wage costs, which have pushed up the expense of hiring for entry-level roles. Alongside feeble consumer demand and the relentless growth of online shopping, investment in automation has become a primary response for businesses.
Automation: The Rising Cost of Human Labour
The economic mechanics are clear. With unemployment rising to its highest rate in a decade and economic output growing modestly, productivity – measured as output per hour – has increased by 1.1% over the past year. Much of this gain stems from falling employment in low-paying sectors like retail, where machines are increasingly seen as a cost-effective alternative to humans.
"The higher your employment costs, regulation, and risk around hiring – the more likely you are as a business to consider options to automate," explains Tera Allas, a professor at the Productivity Institute. This shift is evident in business investment, which saw a 1.5% increase in the third quarter, partly driven by spending on technology.
Historical Echoes and Future Lessons
The current transformation carries eerie echoes of the Industrial Revolution, a period of galloping productivity gains where the spoils initially accrued to capitalists while workers faced wage stagnation – a phase later termed "Engel's pause." Today, a potential "jobs-lite" boom under a Labour government, a party with roots in organised labour, presents a profound irony.
Bank of England Governor Andrew Bailey has warned that job displacement on a similar scale is likely, emphasising the need for robust training and skills programmes. While new technologies historically create new forms of work, the transition must be managed carefully to avoid leaving workers behind.
The challenge for policymakers is clear: to harness the benefits of automation for broader economic growth while ensuring the workforce is equipped and supported through the upheaval. The lessons from the Luddites and the subsequent struggles for workers' rights are a potent reminder that progress without inclusive planning carries significant social cost.
