Robots have been eliciting some strong feelings lately, an irony that is surely lost on them. Economists warn that the amazing technological strides made in recent years—everything from smartphones, to automatons that can work safely on shop floors alongside humans, to driverless cars—could soon put large swaths of the workforce out of a job.
"We are at an inflection point," MIT researchers Erik Brynjolfsson and Andrew McAfee assert in their new book, The Second Machine Age. "The key building blocks are already in place for digital technologies to be as important and transformational to society and the economy as the steam engine," the authors say.
The technological strides of the past few decades have contributed to the nation's rising income inequality, they argue, because only a small group of people tends to benefit income-wise from inventing the next iPhone or tax-preparation software. And Brynjolfsson and McAfee believe the biggest labor-market effects have yet to be felt. A separate 2013 study by Oxford University researchers Carl Benedikt Frey and Michael A. Osborne might give a taste of what's to come; Frey and Osborne say that nearly half of American jobs are at "high risk" of being taken over by robots in the next decade or two. Economists take this idea seriously, and it has a number of policy implications, particularly when it comes to higher education.
But while this futuristic scenario is scary or exciting, depending on your point of view, a number of liberal economists argue that there's just no evidence yet that this is the course the economy will chart. "If technology is leading us to generate more output with fewer workers, that should show up in higher productivity, and you don't really see that," says Jared Bernstein, a former economic adviser to Vice President Joe Biden who is now a senior fellow at the liberal Center on Budget and Policy Priorities. "Isn't that kind of intuitive?"
"The effects of new machine technology are not showing up in productivity statistics—at least not yet—and productivity is by far the most important driver of long-term economic growth," Christine Lagarde, managing director of the International Monetary Fund, said last week. "We certainly need to keep an eye on this."
Productivity growth and employment growth tracked each other closely for decades but began to split in 2000. Lawrence Mishel, head of the liberal Economic Policy Institute, argues that the widening gap we've seen in recent years—often blamed on technology—isn't due to their spread at all, but rather to weak growth and demand. Robots could theoretically be behind the weak demand (if people are earning lower wages and being otherwise muscled out of the labor market, they're less inclined to buy things), Bernstein says, but that's not something economists can tease out of the data until the economy returns to full employment.
Another place you'd expect to see signs of the robot "job-apocalypse" is in businesses' investment in equipment, says Paul Beaudry, an economist at the University of British Columbia's Vancouver School of Economics. That pace has actually been declining over the past 14 years, he says.
Beaudry doesn't dismiss the idea that robots could cause human jobs to disappear down the line. But it would take a game-changing technological advance, such as mass-marketed driverless cars. That "might be around the corner," he adds. "We haven't seen it yet."
Brynjolfsson and McAfee aren't pessimistic about the looming mass displacement from their hypothetical robot wave. They just think policymakers need to intervene to prevent a skills gap from opening up as people get shuffled around. And policymakers are paying attention. "To borrow a Star Trek reference, how can we make the future look more like the harmonious United Federation of Planets and less like the soul-destroying Borg Collective?" IMF's Lagarde asked last week. She concluded that the educational system of the future needs to focus on creative jobs, caring jobs, and ones that involve craftsmanship. These are "the areas where humans can outclass computers," she said.
Oxford's Frey and Osborne agree. "Our ﬁndings thus imply that as technology races ahead, low-skill workers will reallocate to tasks that are non-susceptible to computerization—i.e., tasks requiring creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills," they conclude.
But the flip side of blaming the robots is what Dean Baker, codirector of the liberal Center for Economic and Policy Research, worries about: that the robots-will-take-our-jobs story provides a convenient excuse for policymakers to avoid casting the blame for widening inequality on themselves. If the people who make and own robots get rich, it's because patent laws allow people to charge a lot for them, Baker says. "If that's the basis of inequality, I don't see that much as an excuse, in the sense that that's policy-driven and not robot-driven."
Everyone agrees the world will look different as it fills up with these technological advances. Will it be one of mass unemployment? Not necessarily, and some economists are taking heart from the fact that robots don't seem to be cropping up in the latest worrisome data about the labor market. Now, will the robots one day rise up and revolt against us? That's a different question.
This article appears in the March 8, 2014 edition of National Journal Magazine as Before Blaming the Robots.
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