Replaced By A Robot

There has been much concern in recent years over robots replacing humans in the workforce.  According to an analysis done earlier this year by PricewaterhouseCoopers, an accounting and consulting firm, 38% of U.S. jobs could be replaced by automation by the 2030s and according to a 2013 study by the University of Oxford, almost half of those currently employed in the U.S. will be replaced by automation in the next decade or two.  When you read that, it certainly sounds alarming.  But is this as looming an issue as they claim and what should we, as conservatives, think of this?

An article by the Washington Post states, “Research as well as history suggest that these concerns are overblown and that we are neither headed toward a rise of the machine world nor a utopia where no one works anymore.  Machines are indeed replacing humans – and replicating what we thought were uniquely human skills – at a faster rate than many of us thought possible until recently.  But a focus on technology’s substitutionary (or replacement) role fails to appreciate how it also can be complementary.  Job loss in some occupations will certainly continue, but it will be accompanied by gains in different fields, just as in the past.”  Did you know job openings are at their highest level since the government started tracking it at the end of 2000?  This doesn’t really sound like a robopocalypse.

There is an excellent article on Wired.com that talks in detail about this issue and I’m going to quote a portion of it here:

“This anxiety about automation is understandable in light of the hair-raising progress that tech companies have made lately in robotics and artificial intelligence, which is now capable of, among other things, defeating Go masters, outbluffing champs in Texas Hold’em, and safely driving a car.

It’s a dramatic story, this epoch-defining tale about automation and permanent unemployment.  But it has one major catch: There isn’t actually much evidence that it’s happening.

Imagine you’re the pilot of an old Cessna.  You’re flying in bad weather, you can’t see the horizon, and a frantic, disoriented passenger is yelling that you’re headed straight for the ground.  What do you do?  No question: You trust your instruments—your altimeter, your compass, and your artificial horizon—to give you your actual bearings, and keep flying.

Now imagine you’re an economist back on the ground, and a panic­stricken software engineer is warning that his creations are about to plow everyone straight into a world without work.  Just as surely, there are a couple of statistical instruments you know to consult right away to see if this prediction checks out.  If automation were, in fact, transforming the US economy, two things would be true: Aggregate productivity would be rising sharply, and jobs would be harder to come by than in the past.

Take productivity, which is a measure of how much the economy puts out per hour of human labor.  Since automation allows companies to produce more with fewer people, a great wave of automation should drive higher productivity growth.  Yet, in reality, productivity gains over the past decade have been, by historical standards, dismally low.  Back in the heyday of the US economy, from 1947 to 1973, labor productivity grew at an average pace of nearly 3 percent a year.  Since 2007, it has grown at a rate of around 1.2 percent, the slowest pace in any period since World War II.  And over the past two years, productivity has grown at a mere 0.6 percent—the very years when anxiety about automation has spiked.  That’s simply not what you’d see if efficient robots were replacing inefficient humans en masse.  As McAfee puts it, “Low productivity growth does slide in the face of the story we tell about amazing technological progress.”

Rather than a period of enormous disruption, this has been one of surprising stability for much of the American workforce.

Now, it’s possible that some of the productivity slowdown is the result of humans shifting out of factories into service jobs (which have historically been less productive than factory jobs).  But even productivity growth in manufacturing, where automation and robotics have been well-established for decades, has been especially paltry of late.  “I’m sure there are factories here and there where automation is making a difference,” says Dean Baker, an economist at the Center for Economic and Policy Research.  “But you can’t see it in the aggregate numbers.”

Nor does the job market show signs of an incipient robopocalypse.  Unemployment is below 5 percent, and employers in many states are complaining about labor shortages, not labor surpluses.  And while millions of Americans dropped out of the labor force in the wake of the Great Recession, they’re now coming back—and getting jobs.  Even more strikingly, wages for ordinary workers have risen as the labor market has improved.  Granted, the wage increases are meager by historical standards, but they’re rising faster than inflation and faster than productivity.  That’s something that wouldn’t be happening if human workers were on the fast track to obsolescence.

If automation were truly remaking the job market, you’d also expect to see a lot of what economists call job churn as people move from company to company and industry to industry after their jobs have been destroyed.  But we’re seeing the opposite of that.  According to a recent paper by Robert Atkinson and John Wu of the Information Technology and Innovation Foundation, “Levels of occupational churn in the United States are now at historic lows.”  The amount of churn since 2000—an era that saw the mainstreaming of the internet and the advent of AI—has been just 38 percent of the level of churn between 1950 and 2000.  And this squares with the statistics on median US job tenure, which has lengthened, not shortened, since 2000.  In other words, rather than a period of enormous disruption, this has been one of surprising stability for much of the American workforce.  Median job tenure today is actually similar to what it was in the 1950s—the era we think of as the pinnacle of job stability.

None of this is to say that automation and AI aren’t having an important impact on the economy.  But that impact is far more nuanced and limited than the doomsday forecasts suggest.  A rigorous study of the impact of robots in manufacturing, agriculture, and utilities across 17 countries, for instance, 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.  Of the 271 occupations listed on the 1950 census only one—elevator operator—had been rendered obsolete by automation by 2010.

But on closer examination, those predictions tend to assume that if a job can be automated, it will be fully automated soon—which overestimates both the pace and the completeness of how automation actually gets adopted in the wild.  History suggests that the process is much more uneven than that.  The ATM, for example, is a textbook example of a machine that was designed to replace human labor.  First introduced around 1970, ATMs hit widespread adoption in the late 1990s.  Today, there are more than 400,000 ATMs in the US.  But, as economist James Bessen has shown, the number of bank tellers actually rose between 2000 and 2010.  That’s because even though the average number of tellers per branch fell, ATMs made it cheaper to open branches, so banks opened more of them.  True, the Department of Labor does now predict that the number of tellers will decline by 8 percent over the next decade.  But that’s 8 percent—not 50 percent.  And it’s 45 years after the robot that was supposed to replace them made its debut.

In fact, as a recent paper by Lawrence Mishel and Josh Bivens of the Economic Policy Institute puts it, “automation, broadly defined, has actually been slower over the last 10 years or so.”

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.  That’s exactly the opposite of what you’d expect in a rapidly automating world.  As for gadgets like Pepper, 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: Robots had killed the good-­paying manufacturing job, and they were coming for the rest of us next.

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 by the economists Daron Acemoglu and Pascual Restrepo—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.

Over and over again, as vast numbers of jobs have been destroyed, others have been created.  And over and over, we’ve been terrible at envisioning what kinds of new jobs people would end up doing.”

As conservatives, we are obviously for the advancement of technology but we also want people to have jobs.  I believe automation could actually create some new jobs.   While it is possible that it may not create enough new jobs for everyone who has lost their job to automation, I would argue that other fields of work will be available.   People will always be needed.  Instead of fearing new technology and advancements, we should embrace it and evolve with it by finding new ways to make use of our talents.  The age-old truth remains true: those who want to work, will.  As in the last of the article above, “we are terrible at envisioning what kinds of new jobs people would do.”  Did you know Facebook employs over 17,000 people?  That’s a lot of employees for a social media company, but it shows what creativity can do.  With the rise of technology, new jobs will still be created and humans and robots could easily work together.  However, until the number of job openings declines and remains persistently low, one should be careful about pitting man vs. machine.

Sarah

Sources:

https://www.washingtonpost.com/posteverything/wp/2016/02/17/yes-the-robots-will-steal-our-jobs-and-thats-fine/

-U.S. Bureau of Labor Statistics

https://www.wired.com/2017/08/robots-will-not-take-your-job/

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