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9/26/2013
11:19 AM
Robert Atkinson
Robert Atkinson
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Robots Taking All Our Jobs? Ridiculous

Neo-Luddite idea that automation causes high unemployment rates has been disproved throughout history.

With unemployment rates so high for so long, one explanation making the rounds is that "the robots are taking our jobs." This neo-Luddite, anti-technology narrative argues that high productivity driven by increasingly powerful IT-enabled "machines" is the main cause of U.S. labor market problems, and accelerating technological change will only make those problems worse.

If technology enables the same amount of work to be done with fewer people, the argument goes, then it must be bad for employment. More sophisticated variants of this thesis further claim that accelerating technological change has created too much churn in labor markets, and robots are now storming the last few bastions of scarce human abilities.

This tale is not new. The original British Luddites rose up in the early 1800s to oppose mechanization of the textile industry and went so far as to destroy looms that were replacing workers. In the two centuries since, whenever unemployment rates have risen there have been some who blamed the machines. Many even argued that we were heading toward mass permanent unemployment.

What is different today is how widespread the neo-Luddite view has become and how well-received it is in Western society. When the leading proponents of this view get an amiable hearing on the TV news magazine 60 Minutes, you know that something has changed.

[ Take a look at some robots that are keeping humans safer. See DARPA Robot Challenge: Disaster Recovery. ]

Fortunately for workers and for those who understand the potential of new technologies, these ideas are essentially misguided speculation. They fly in the face of years of economic data as well as current trends.

They all fall into what economists call the "Lump of Labor" fallacy, the idea that there's a limited amount of labor to be done. In reality, labor markets aren't fixed. If jobs in one firm or industry are reduced, they're replaced by jobs in other areas of the economy. This is why we did not see massive unemployment as agriculture mechanized in the early 20th century -- the workforce shifted to other professions.

In addition, focusing on job loss creates a distorted view of the process of technological change. First, many businesses actually increase employment as they increase productivity rather than lay workers off, because productivity gains let them cut costs, in turn enabling them to increase sales. Second, savings from increased productivity are recycled back into the economy in the form of lower prices and/or higher wages that create demand that, in turn, creates even more jobs.

The neo-Luddite, anti-robot case is clearly refuted by the data and by scholarly research. Macroeconomic studies have shown convincingly that technology improvements neither decrease the rate of people working in an economy nor raise the unemployment rate. Comprehensive analyses from sources as varied as the World Bank, the International Labor Organization and the Federal Reserve Bank of San Francisco have noted that technological change doesn't play an important role in determining employment in the long run. If anything, productivity may actually reduce unemployment in the medium term.

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The potential for job losses in the future is often overstated as well, with grandiose claims about human obsolescence and the end of labor as we know it. A more realistic view of the economy shows why these claims miss the mark.

One reason is that our economy is complex, with a broad range of industries and occupations, some amenable at a particular time to automation and many others not. Another reason is that technological change, no matter how advanced, doesn't happen overnight -- in fact, current productivity increases are trending downward. But the main reason is that human wants are close to infinite. We need look no further than the fact that most people would love to win the Powerball lottery so they can buy a mansion and luxury car. And as long as that's true, those wants will require labor to fill them (even if that labor is eventually supplemented by 22nd century robots).

The erroneous view that machines are the problem and not the solution goes against the uniquely American grain of faith in the desirability and inevitability of progress. And it threatens to sap the American spirit of its relentless and aggressive support for innovation and technological development.

It is time to consign neo-Ludditism and its particular refrain that "technology costs jobs" once and for all to the dustbin of history. Robots, automation, machines and productivity are key enablers of human progress and absolutely no threat to overall employment. As such, economic policy should put the pedal to the metal, at every possible opportunity, for faster technological improvement, better use of that technology in the workplace, and higher productivity.

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rantsalot
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rantsalot,
User Rank: Apprentice
9/27/2013 | 8:41:52 PM
re: Robots Taking All Our Jobs? Ridiculous
A huge use for Gogle's self-driving car concept can be found in the trucking industry. Big 18-wheelers will slowly be replaced by fleets of smaller box trucks that will drive themselves to their destinations at optimum hours and delivery times. This will reduce the need for OTR drivers and increase the need for people who know how to run robotic loading/unloading devices. It will be weird driving at night alongside all the robotic trucks everywhere on the interstates.
bfately914
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bfately914,
User Rank: Apprentice
9/27/2013 | 9:41:01 PM
re: Robots Taking All Our Jobs? Ridiculous
@barnabyD077 is correct - just because the historical argument against the Luddite position ("don't worry, in ten years there will be jobs we can't imagine today!") has held true thus far in no way means it will continue to do so. No doubt there will be jobs ten years hence that we cannot imagine today - but the "photonic transmogrification engineer" position of the future will require high levels of skill and education which the vast majority of people will not have. Meanwhile, when (not if) iRobot (or someone) comes out with a robot that can pick strawberries, all those displaced workers will have no place to go.
In the 1900 US census, something like a third of the population worked on farms. A mere 100 years later, under 3% did so. All those workers, replaced as they were by the technologies of tractors and fertilizers, etc., moved to the cities and essentially became apprentices, learning hos to put wheels on cars or whatever. That kind of apprenticeship education will simply not work when one will need PhD-level knowledge. Workers in certain high touch jobs - nurses, cops, (call girls?) etc. will not be replaced so easily, but the vast majority of the workforce will become, as it was put in that episode of Twilight Zone, obsolete.
Jim
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Jim,
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9/27/2013 | 10:15:57 PM
re: Robots Taking All Our Jobs? Ridiculous
"If technology enables the same amount of work to
be done with fewer people, the argument goes, then it must be bad for
employment." = More productivity per person working and higher incomes for each of those working.

If there is the same output, the total revenue should be about the same. The extra income per person will be equal to the income lost by fewer working at that job. The higher expenditures from those still working will be spent on other goods meaning there should be about the same number of jobs overall. We end up producing more with those freed up resources and as a group are wealthier.
ratkinson
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ratkinson,
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9/28/2013 | 4:00:46 PM
re: Robots Taking All Our Jobs? Ridiculous
Thanks for the thoughtful comments to my blog. To respond to a few.

Some of the comments refer to the threat that automation will have differential impacts re skills and that they will destroy low skill and all that will be left will be high skills, and that many workers wont transition. Two responses. First, as we find in this blog http://www.innovationfiles.org... automation is likely to be easier for low skill jobs. However, of the top 10 jobs to be added from now to 2020, according to the Bureau of Labor Statistics none of them require a college degree. Moreover, there are lots of workers who are currently overqualified working in lower wage, lower skill jobs. Second, this points to the need for a better human capital strategy for the US.

Some comments (bfately914 and barnaby0077) suggest that technology will get so powerful that virtually all jobs will be eliminated - eg. AI. But this ignores the fact that human consumption needs for all practical purposes are infinite. Imagine a world where median income increases 10-fold (to half a million a year) and work hours are cut in half (20 hours a week). I dont know about you but i would think i had died and gone to heaven. But getting to this nirvanna would require productivity to increase by a factor of 20. Given that in the history of the US productivity has never increased by more than 4 percent a year, you would have to assume that somehow there is will increases on an order of magnitude.
ratkinson
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ratkinson,
User Rank: Apprentice
9/28/2013 | 4:09:10 PM
re: Robots Taking All Our Jobs? Ridiculous
Some more comments.
de
To continue from last point. I am not as optimistic about AI as some of you seem to be. I would bet that there is no winner of the Turing Test for at least another 25 years. FOr one reason, Moore's law is likely to slow down. But even if i am wrong. There are lots of jobs machines cant do: police, massage therapists, dentists, CEOs, and even think tank analysts.
Re Laurrane's question. Autonomous vehicles will eventually happen, although slower than many people expect. But most of the impact will not save us time, it will just let us work (or watch movies) while we commute to work. It may put some truck drivers and cab drivers out of work, but not all. Re drug delivery by robots. I hope this happens even more. Hard to say whether the savings will be funneled to lower prices for hospital care or better quality (e.g. redeploying nurses to other functions). My guess is that depends on whether we end up raising the retirement age so that all our money doesnt go to retired people.

Finally, re Anon. We have a system to pay people when they are laid off, by robots or any other reason: unemployment insurance. To be sure, it is not very good, especially in many Southern states. But the principle should be to give displaced workers some temporary financial assistance, with the key point being temporary. if its til they get a job, they wont get a job for a long time. And re the point about low wages overseas hurting US incomes, this is not really true. Our wages are determined by what we produce in the US and how we choose to allocate that production among 300 million or so Americans. Wages are simply a means of allocating production. What matters most is producing more, and that requires productivity and automation.
Hayaka
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Hayaka,
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9/29/2013 | 5:34:13 AM
re: Robots Taking All Our Jobs? Ridiculous
"There are lots of jobs machines cant do: police, massage therapists, dentists, CEOs, and even think tank analysts."

Those are your examples of jobs that will remain? Every one of those except perhaps massage therapists are jobs that the person with an average physique and average level of education cannot do.

"And re the point about low wages overseas hurting US incomes, this is not really true. Our wages are determined by what we produce in the US and how we choose to allocate that production among 300 million or so Americans."

I don't even know what that means, but I'm pretty sure it doesn't rebut the point that hundreds of thousands of jobs which used to be done by stateside Americans are now being done much cheaper overseas. The ease with which information can now be transferred has rendered national borders virtually meaningless with respect to whole categories of employment.
BugsyS
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BugsyS,
User Rank: Apprentice
9/29/2013 | 8:00:13 AM
re: Robots Taking All Our Jobs? Ridiculous
Those who question the impact of automation on employment are not necessarily "anti-technology" or "anti-robot" as claimed.

But there is no law of economics that says that new technology must always create more employment. Nor is there a law that says that any new jobs created will provide remuneration equal to or above that provided by work before it became obsolete.

Human wants are indeed near infinite but the issue is the comparative abilities of the man vs the machine. Even if the machine permits new opportunities it is mere assumption to think that people will necessarily be capable of taking advantage.

Belief in technological unemployment is becoming more widespread because people can see that the middle class is being slowly hollowed out. Inequality is rising and yet people are more educated now than ever. People may in time adjust their skill set (assuming they are capable and anyone who lives in the real world knows that some people are never going to be neurosurgeons) but how long will it take and at what pace is technology accelerating?

Artificial intelligence is about to start taking many low skill jobs that formerly required human dexterity and common sense. The traditional economy has always depended on jobs that involved simple labor. We may have transitioned from the farm to the factory, but simple jobs have always remained (thus far). But if a machine can sweep a floor, can pick fruit, can drive a car, can checkout people's groceries, can serve a latte, then these simple jobs disappear and it is simply not tenable to think that the traditional underclass is going to all become robot-engineers. It's wishful thinking motivated by an ideological belief in the free market.

The real kicker though is not robots, but virtual reality. Give it 20-30 years and it will be as realistic as real life and if not already integrated into the nervous system, soon will be. Once this is possible then infinite wants can be met: whatever you imagine can be made real. Count the number of movies/songs on your hard drive. Count how many were paid for. That's the economy of the future.

Far from being anti-technology I think the promise is more than we could ever dream of.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
9/29/2013 | 2:26:27 PM
re: Robots Taking All Our Jobs? Ridiculous
Medicine automation is an example of the difficulty finding ROI in some use cases. Say a nurse doesn't need to stop by to deliver medicine. But the higher value is that nurse coming in to check on a patient's well being -- to make a judgment. So can you really remove cost?
elleno
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elleno,
User Rank: Apprentice
9/29/2013 | 5:20:25 PM
re: Robots Taking All Our Jobs? Ridiculous
Robert Atkinson is right and wrong at the same time: technology does destroy lower level jobs, but creates newer sophisticated jobs at the same time.

The problem is that these newer jobs require smarter people and there are simply not enough smart people available. Hence you have the current contradictions. There is high unemployment at the same time as there are shortages of workers in particular fields.

The problem is political correctness that emphasizes that all people are the same (just like the Greeks and Germans, for example). Problem is it is bunk. There are dumb people, average people and smart people. Hard working people and lazy people. People who can handle abstract concepts and people who cannot.

The work of average people is being mechanized and move up the IQ bell curve as it were. Atkinson's analysis is pretty superficial.
Becca L
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Becca L,
User Rank: Apprentice
9/29/2013 | 7:29:21 PM
re: Robots Taking All Our Jobs? Ridiculous
At the age of 10 my dad paid my brother $15 to mow the lawn, plus $1 for each additional year. By the time he was 18 my brother was mowing the lawn a little too frequently. Dad decided it was more economical to take over, bought a more efficient mower, and my brother had incentive to take on a job at a summer camp. Does everyone win?
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