A Key Topical Issue

A rigorous study of the impact of robots in manufacturing, agriculture, and utilities across 17 countries, has found that robots did reduce the hours of lower-skilled workers—but they didn’t decrease the total hours worked by humans, and they actually boosted wages.

In other words, automation may affect the kind of work humans do, but at the moment, it’s hard to see that it’s leading to a world without work. Researcher Andrew McAfee says the central phenomenon is not net job loss. It’s the shift in the kinds of jobs that are available.”
McAfee points to both retail and transportation as areas where automation is likely to have a major impact. Yet even in those industries, the job-loss numbers are less scary than many headlines suggest.

Goldman Sachs just released a report predicting that autonomous cars could ultimately eat away 300,000 driving jobs a year. But that won’t happen, the firm argues, for another 25 years, which is more than enough time for the economy to adapt.

A recent study by the Organization for Economic Cooperation and Development, meanwhile, predicts that 9 percent of jobs across 21 different countries are under serious threat from automation. That’s a significant number, but not an apocalyptic one.

Of the 271 occupations listed on the US 1950 census only one—elevator operator—had been rendered obsolete by automation by 2010.

Corporate America, for its part, certainly doesn’t seem to believe in the jobless future. If the rewards of automation were as immense as predicted, companies would be pouring money into new technology. 
But they’re not. Investments in software and IT grew more slowly over the past decade than the previous one. Total spending on all robotics in the US was just $11.3 billion last year. That’s about a sixth of what Americans spend every year on their pets.

So if the data doesn’t show any evidence that robots are taking over, why are so many people even outside Silicon Valley convinced it’s happening? In the US, at least, it’s partly due to the coincidence of two widely observed trends.

Between 2000 and 2009, 6 million US manufacturing jobs disappeared, and wage growth across the economy stagnated. In that same period, industrial robots were becoming more widespread, the internet seemed to be transforming everything, and AI became really useful for the first time. So it seemed logical to connect these phenomena.
But something else happened in the global economy right around 2000 as well: China entered the World Trade Organization and massively ramped up production. And it was this, not automation, that really devastated American manufacturing.
A recent paper—titled, fittingly, “Robots and Jobs”—got a lot of attention for its claim that industrial automation has been responsible for the loss of up to 670,000 jobs since 1990. But just in the period between 1999 and 2011, trade with China was responsible for the loss of 2.4 million jobs: almost four times as many.
“If you want to know what happened to manufacturing after 2000, the answer is very clearly not automation, it’s China,” says Dean Baker, an economist at the Center for Economic and Policy Research. (In other words, Donald Trump isn’t entirely wrong about what’s happened to American factory jobs.)

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