As robots and artificial intelligence (AI) rapidly transform industries by boosting efficiency and cutting labor costs, experts are raising alarms about the future sustainability of social security systems. While these technological advancements offer benefits such as reducing the need for human workers in certain roles, they could lead to challenges in funding pensions, healthcare, and other social security benefits, particularly for displaced workers.
Zheng Gongcheng, president of the China Association of Social Security and a professor at Renmin University of China, highlighted the potential impact of automation on social security systems. He noted that if robots replace up to 70 percent of manufacturing jobs, as current technological trends suggest, displaced workers could face reduced welfare benefits during their transition to new roles. Traditional social insurance schemes, which rely on payroll deductions from employers and employees, would be under pressure as the human workforce shrinks.
Zheng provided an example: If a factory replaces 100 workers with robots, it eliminates 100 individual contributions to social security. This would strain existing pension and healthcare funds, raising a crucial question: Should enterprises be required to pay social security fees for robots?
“Although there is currently no consensus, social security issues must be addressed with seriousness and prudence,” Zheng said. “If left unaddressed, these challenges could undermine the fairness and stability of the entire social security system.”
He suggested that one possible solution could involve imposing a levy on robotic productivity gains, helping to supplement the contributions traditionally made by human workers. Furthermore, Zheng emphasized that the social security system, as a tool for wealth redistribution, needs to evolve alongside technological progress to maintain its role in promoting social equality.
Balancing Innovation with Job Security
The rapid adoption of robots has already begun in agriculture and manufacturing, with the potential to extend into the service sectors. Zheng acknowledged that robots could alleviate workers from dangerous, repetitive tasks, but stressed that a cautious approach is necessary to avoid sudden spikes in unemployment. He highlighted the importance of human-robot collaboration, particularly in sectors like elderly care, where robots can support workers without fully replacing them.
Zhao Ziyi, dean of the Guizhou Institute for Urban Economics and Development, raised concerns about the risk automation poses to low-skilled workers. She noted that workers engaged in labor-intensive, repetitive tasks are particularly vulnerable to being replaced by machines, which could exacerbate social inequality. Zhao warned that the expansion of the unemployed population could widen the wealth gap, with capital and technology owners benefitting the most, while ordinary workers struggle to adapt.
To address these concerns, Zhao advocated for adaptive adjustments to social policies, including exploring universal basic income (UBI) to provide a safety net for displaced workers. She also called for innovative employment models, such as reducing working hours in line with technological advancements and developing shared employment strategies to ease labor market pressures.
Opportunities in the AI Era
Despite the challenges posed by automation, Zhao noted that the rise of AI and robots also offers positive outcomes. The shift toward automation could lead to the creation of new job positions, such as AI trainers and robotics maintenance specialists. Moreover, AI and robots could help reduce the monotony of labor, allowing workers to transition into roles that require emotional intelligence, complex decision-making, and creative thinking.
“While machines may replace specific jobs, they cannot replicate human ingenuity,” Zhao said. “Shifting education toward fostering creativity rather than rote learning is a way to embrace these changes and prepare workers for new opportunities.”
A recent report by Mercer, Global Talent Trends 2024, found that 56 percent of executives believe AI will create new jobs within their organizations. Additionally, employee concerns about losing their jobs to AI have decreased significantly, from 53 percent in 2022 to just 10 percent in 2024.
The Need for Proactive Education and Policy Reforms
Li Bing, a partner at consultancy Roland Berger, emphasized that more people are now viewing AI as a tool to boost productivity rather than a threat to jobs. “History shows that technological evolutions eventually create new forms of employment,” Li said. “The key is to shorten the painful period of transformation and turn the impact of AI into opportunities for high-quality employment through education empowerment and policy guarantees.”
Li recommended integrating AI skills into vocational training programs, a strategy already adopted by countries like Singapore and Germany. Additionally, some regions in the United States have introduced a tech dividend tax on businesses with high levels of AI and automation, using the proceeds to support education and employment in low-income communities.
