The argument over the impact of continuing technological advances on labor markets has been around at least since the Industrial Revolution introduced steam power and mechanization to the world. Overall it’s pretty hard to argue that technology has made the world worse, even if its benefits have been mixed.
The current terms of the argument include people who think that the displacement of human workers by automation is either very close at hand or very far in the future.
Economists Daron Acemoglu and Pascual Restrepo recently studied the impact of rising industrial robot usage and found that each new robot reduced the employment-to-population ratio per thousand workers by about 0.18 to 0.34 percentage points, and wages fell between 0.25% to 0.5%. Or, more plainly said, for every robot added to the U.S. economy, 3.0 to 5.6 workers lost their jobs.
A new paper by Lawrence Mishel and Josh Bivens at the Economics Policy Institute argues that Acemoglu and Restrepo’s research “does not show large and negative effects on overall employment stemming from automation.” Rather, they say:
[E]ven if robots displace some jobs in a given [local] commuting zone, other automation (which presumably dwarfs robot automation in the scale of investment) creates many more jobs. It is curious that [media] coverage of the [Acemoglu & Restropo] report ignores this major finding, especially since it essentially repudiates what has been the conventional wisdom for decades—that automation has hurt job growth (at least for less-credentialed Americans). …
The problems afflicting American workers include the failure to secure genuine full employment through macroeconomic policy and the intentional policy assault on the bargaining power of low- and middle-wage workers; these are the causes of wage stagnation and rising inequality. Solving these actually existing problems should take precedence over worrying about hypothetical future effects of automation.
We wrote yesterday about the threat posed by self-driving trucks to more than 3 million U.S. truck drivers. Analysts at Goldman Sachs estimate that as many as 25,000 jobs a month could be lost to autonomous trucks over the next decade or so.
Former Treasury Secretary Larry Summers wrote in a blog post about the trade-off between technological change and jobs:
[Y]ou can debate whether technological change is [a] net good. I certainly believe it is. And you can debate what the job creation effects will be relative to the job destruction effects. I think this is much less clear, given the downward trends in adult employment, especially for men over the past generation. … Almost every economist who has studied the question believes that technology has had a greater impact on the wage structure and on employment than international trade and certainly a far greater impact than whatever increment to trade is the result of much debated trade agreements.
The issue appears to boil down not to whether robots and automation will replace human workers, but how quickly that will happen and what impact that will have on American jobs. As with all things in our free-market economy, there will be winners and losers. And it’s not hard to predict who stands to win and who stands to lose.