The Corner

Economy & Business

Automation: The Beat Goes On

The New York Times:

Who is winning the race for jobs between robots and humans? Last year, two leading economists described a future in which humans come out ahead. But now they’ve declared a different winner: the robots.

The industry most affected by automation is manufacturing. For every robot per thousand workers, up to six workers lost their jobs and wages fell by as much as three-fourths of a percent, according to a new paper by the economists, Daron Acemoglu of M.I.T. and Pascual Restrepo of Boston University. It appears to be the first study to quantify large, direct, negative effects of robots.

The paper is all the more significant because the researchers, whose work is highly regarded in their field, had been more sanguine about the effect of technology on jobs. In a paper last year, they said it was likely that increased automation would create new, better jobs, so employment and wages would eventually return to their previous levels. Just as cranes replaced dockworkers but created related jobs for engineers and financiers, the theory goes, new technology has created new jobs for software developers and data analysts.

The first half of that last sentence points to one small problem: How many of those dockworkers became financiers and engineers?

The two researchers have now, the Times reports, turned their attention to “real-world data” and:

The researchers said they were surprised to see very little employment increase in other occupations to offset the job losses in manufacturing. That increase could still happen, they said, but for now there are large numbers of people out of work, with no clear path forward — especially blue-collar men without college degrees.

“The conclusion is that even if overall employment and wages recover, there will be losers in the process, and it’s going to take a very long time for these communities to recover,” Mr. Acemoglu said.

“A very long time.”

As a reminder, real wages in Britain stagnated for most of the first half of the 19th Century even as GDP, boosted by new technology, grew rapidly, a ‘pause’ (dubbed the ‘Engels Pause’ by the British economist Robert Allen) that was to have very real political consequences. Who was that Engels fellow again?

The Guardian:

As of 2015, a typical production worker in the US earned about 9% less than a comparable worker in 1973. Over the same 42 years, the American economy grew by more than 200%, or a staggering $11tn.

Now think about the implications of self-driving trucks.

And then take a look at the chart here that shows the most common job in each state.

 

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