Are robots taking our jobs?

April 6, 2016 by Moshe Y. Vardi, Rice University, The Conversation
Is this a vision of the future? Credit: Robot worker image via shutterstock.com

If you put water on the stove and heat it up, it will at first just get hotter and hotter. You may then conclude that heating water results only in hotter water. But at some point everything changes – the water starts to boil, turning from hot liquid into steam. Physicists call this a "phase transition."

Automation, driven by , has been increasing inexorably for the past several decades. Two schools of economic thinking have for many years been engaged in a debate about the potential effects of automation on jobs, employment and human activity: will new technology spawn mass unemployment, as the robots take jobs away from humans? Or will the jobs robots take over release or unveil – or even create – demand for new human jobs?

The debate has flared up again recently because of technological achievements such as deep learning, which recently enabled a Google software program called AlphaGo to beat Go world champion Lee Sedol, a task considered even harder than beating the world's chess champions.

Ultimately the question boils down to this: are today's modern technological innovations like those of the past, which made obsolete the job of buggy maker, but created the job of automobile manufacturer? Or is there something about today that is markedly different?

Malcolm Gladwell's 2006 book The Tipping Point highlighted what he called "that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire." Can we really be confident that we are not approaching a tipping point, a phase transition – that we are not mistaking the trend of technology both destroying and creating jobs for a law that it will always continue this way?

Old worries about new tech

This is not a new concern. Dating back at least as far as the Luddites of early 19th-century Britain, new technologies cause fear about the inevitable changes they bring.

It may seem easy to dismiss today's concerns as unfounded in reality. But economists Jeffrey Sachs of Columbia University and Laurence Kotlikoff of Boston University argue, "What if machines are getting so smart, thanks to their microprocessor brains, that they no longer need unskilled labor to operate?" After all, they write:

Smart machines now collect our highway tolls, check us out at stores, take our blood pressure, massage our backs, give us directions, answer our phones, print our documents, transmit our messages, rock our babies, read our books, turn on our lights, shine our shoes, guard our homes, fly our planes, write our wills, teach our children, kill our enemies, and the list goes on.

Looking at the economic data

There is considerable evidence that this concern may be justified. Eric Brynjolfsson and Andrew McAfee of MIT recently wrote:

For several decades after World War II the economic statistics we care most about all rose together here in America as if they were tightly coupled. GDP grew, and so did productivity—our ability to get more output from each worker. At the same time, we created millions of jobs, and many of these were the kinds of jobs that allowed the average American worker, who didn't (and still doesn't) have a college degree, to enjoy a high and rising standard of living. But … productivity growth and employment growth started to become decoupled from each other.

Lots more productivity; not much more earning. Credit: U.S. Department of Labor Statistics

As the decoupling data show, the U.S. economy has been performing quite poorly for the bottom 90 percent of Americans for the past 40 years. Technology is driving productivity improvements, which grow the economy. But the rising tide is not lifting all boats, and most people are not seeing any benefit from this growth. While the U.S. economy is still creating jobs, it is not creating enough of them. The rate, which measures the active portion of the labor force, has been dropping since the late 1990s.

While manufacturing output is at an all-time high, manufacturing employment is today lower than it was in the later 1940s. Wages for private nonsupervisory employees have stagnated since the late 1960s, and the wages-to-GDP ratio has been declining since 1970. Long-term unemployment is trending upwards, and inequality has become a global discussion topic, following the publication of Thomas Piketty's 2014 book, Capital in the Twenty-First Century.

A widening danger?

Most shockingly, economists Angus Deaton, winner of the 2015 Nobel Memorial Prize in Economic Science, and Anne Case found that mortality for white middle-age Americans has been increasing over the past 25 years, due to an epidemic of suicides and afflictions stemming from substance abuse.

Is automation, driven by progress in technology, in general, and artificial intelligence and robotics, in particular, the main cause for the economic decline of working Americans?

In economics, it is easier to agree on the data than to agree on causality. Many other factors can be in play, such as globalization, deregulation, decline of unions and the like. Yet in a 2014 poll of leading academic economists conducted by the Chicago Initiative on Global Markets, regarding the impact of technology on employment and earnings, 43 percent of those polled agreed with the statement that "information technology and automation are a central reason why median wages have been stagnant in the U.S. over the decade, despite rising productivity," while only 28 percent disagreed. Similarly, a 2015 study by the International Monetary Fund concluded that technological progress is a major factor in the increase of inequality over the past decades.

The bottom line is that while automation is eliminating many jobs in the economy that were once done by people, there is no sign that the introduction of technologies in recent years is creating an equal number of well-paying jobs to compensate for those losses. A 2014 Oxford study found that the number of U.S. workers shifting into new industries has been strikingly small: in 2010, only 0.5 percent of the was employed in industries that did not exist in 2000.

The discussion about humans, machines and work tends to be a discussion about some undetermined point in the far future. But it is time to face reality. The future is now.

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philecrawford
3 / 5 (2) Apr 06, 2016
a rising tide lifts all yachts - why should we worry about economic growth if it only trickles up?
rxg
3.7 / 5 (3) Apr 06, 2016
Yes, and it's a good thing. Have you ever stopped to think about why we all seem to just assume that life-long, compulsory labor whether you like it or not is a non-negotiable, indispensable aspect of a functioning society? Consider the possibility that humans could employ something else to do the work for us, and try your hardest to resist the urge to say it would be a bad thing.

Humans being freed from compulsory labor is not a bad thing. It's a good thing.

What's bad is that the transition period from one system to another will be difficult (and it has begun, as the decoupling graph shows). As automated labor creates enormous amounts of wealth at unprecedented efficiency, many people won't be able to afford it because of the job crisis. The solution is to slowly reduce the length of the work week as automation increases so that everyone can continue working. Eventually, work for everyone is only compulsory for a few months a year or less.
rxg
5 / 5 (1) Apr 06, 2016
I should also say that the explanation above is why Larry Page recently suggested reducing the length of the work week to 4 days instead of 5 in a recent interview.
crass
not rated yet Apr 10, 2016
So dropping off the gold standard didnt do anything from 1971 onwards. The so-called trade deals like nafta didnt do anything, and shipping jobs overseas didnt do anything. Give it a rest FGS!!
Eikka
not rated yet Apr 10, 2016
Technology is driving productivity improvements, which grow the economy.


The graph in the article is misleading, because the "productivity" it talks about is defined in terms of GDP instead of real value, so it includes all the make-work in services and finance, law, intellectual property etc. that ultimately just involves pushing money around.

It's an artifact of the way we estimate GDP, where even consuming stuff counts as "productivity" even though it's a net loss of wealth. The reason is that anything that makes money move is profitable to the middle men who take a cut from all movement of money.

The reason why the wages are stagnant is becuse the real production output per capita is stagnant. The goods producing part of the economy hasn't grown in absolute numbers in 40 years, while the rest of the society has. The improvements in real production have been consumed by population growth.

The wages stay low because you can't eat a movie or sleep in a haircut.
Eikka
not rated yet Apr 10, 2016
and shipping jobs overseas didnt do anything. Give it a rest FGS!!


The absolute number of US manufacturing jobs stayed nearly constant between 1970-1990 and only started dropping significantly after the 1997-8 privatization drive in China and with the introduction of Chinese exports subsidies as a way to wage a trade war. 1998 was the first blow, the second blow was the 2008 financial crisis and the housing market bubble burst, but still the manufacturing sector hasn't taken such a huge hit.

No jobs have really been lost. The reason why it seems like the US has lost manufacturing is because the population has tripled, but the new people have not employed themselves in manufacturing. Instead they became employed in "services".

Basically, everyone's trying to make money without making something to trade for the money, or by making people consume more, which is directly making everyone poor. Too many princes, not enough peasants.

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