Are Robots Going to Steal Our Jobs?
Reason magazine|July 2017

Many technologists think so, but economists aren’t so easily convinced.
 

Ronald Bailey

“The realtity is that we are facing a jobless future: one in which most of the work done by humans will be done by machines. Robots will drive our cars, manufacture our goods, and do our chores, but there won’t be much work for human beings.” That’s the dire warning of software entrepreneur and Car negie Mellon engineer Vivek Wadhwa.

Former Microsoft ceo Bill Gates agrees: Technology “will reduce demand for jobs, particularly at the lower end of skill set,” he has predicted. Gates has also proposed taxing robots to support the victims of technological unemployment. “In the past,” software entrepreneur Martin Ford declared last year, “machines have always been tools that have been used by people.” But now, he fears, they’re “becoming a replacement or a substitute for more and more workers.” A much-cited 2013 study from the Oxford Martin Programme on Technology and Employment struck an even more dire note, estimating that 47 percent of today’s American jobs are at risk of being automated within the next two decades.

The conventional wisdom among technologists is well established: Robots are going to eat our jobs. But economists tend to have a different perspective.

Over the past two centuries, they point out, automation has brought us lots more jobs—and higher living standards too. “Is this time different?” the Massachusetts Institute of Technology economist David Autor said in a lecture last year. “Of course this time is different; every time is different. On numerous occasions in the last 200 years scholars and activists have raised the alarm that we are running out of work and making ourselves obsolete....These predictions strike me as arrogant.”

“We are neither headed toward a rise of the machine world nor a utopia where no one works anymore,” said Michael Jones, an economist at the University of Cincinnati, last year. “Humans will still be necessary in the economy of the future, even if we can’t predict what we will be doing.” When the Boston University economist James Bessen analyzed computerization and employment trends in the U.S. since 1980, his study concluded that “computer use is associated with a small increase in employment on average, not major job losses.”

Who is right, the terrified technologists or the totally chill economists?

THIS TIME IS ALWAYS DIFFERENT

IN 1589, QUEEN Elizabeth I refused to grant a patent to William Lee for his invention of the stocking frame knitting machine, which sped up the production of wool hosiery. “Thou aimest high, Master Lee,” she declared. “Consider thou what the invention could do to my poor subjects. It would assuredly bring to them ruin by depriving them of employment, thus making them beggars.” In the early 19th century, English textile workers calling themselves Luddites famously sought to protect their livelihoods by smashing industrial weaving machines.

The economist John Maynard Keynes warned in 1930 that the “means of economising the use of labour [is] outrunning the pace at which we can find new uses for labour,” resulting in the “new disease” of “technological unemployment.” In 1961, Time warned: “Today’s new industries have comparatively few jobs for the unskilled or semiskilled, just the class of workers whose jobs are being eliminated by automation.” A 1989 study by the International Metalworkers Federation forecasted that within 30 years, as little as 2 percent of the world’s current labor force “will be needed to produce all the goods necessary for total demand.” That prediction has just two years left to come true.

This year the business consultancy McKinsey Global Institute issued a report that analyzed the potential impact of automation on individual work activities rather than entire occupations. The McKinsey researchers concluded that only 5 percent of occupations are fully automatable using currently available technologies. On the other hand, the report also estimated that “about half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies”—principally the physical work that takes place in highly structured and predictable environments along with routine data collection and processing.

In March, the consultancy PricewaterhouseCoopers concluded 38 percent of jobs in the U.S. are at high risk of automation by the early 2030s. Specifically, jobs in transportation and storage, retail and wholesale trade, food service and accommodation, administrative and support services, insurance and finance, and manufacturing are particularly vulnerable.

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