Robots Taking All Our Jobs? Ridiculous

With unemployment rates so high for so long, one explanation making the rounds is that "the robots are taking our jobs." This neo-Luddite, anti-technology narrative argues that high productivity driven by increasingly powerful IT-enabled "machines" is the main cause of U.S. labor market problems, and accelerating technological change will only make those problems worse. If technology enables the same amount of work to be done with fewer people, the argument goes, then it must be bad for employment. More sophisticated variants of this thesis further claim that accelerating technological change has created too much churn in labor markets, and robots are now storming the last few bastions of scarce human abilities. This tale is not new.

The original British Luddites rose up in the early 1800s to oppose mechanization of the textile industry and went so far as to destroy looms that were replacing workers. In the two centuries since, whenever unemployment rates have risen there have been some who blamed the machines. Many even argued that we were heading toward mass permanent unemployment.

What is different today is how widespread the neo-Luddite view has become and how well-received it is in Western society. When the leading proponents of this view get an amiable hearing on the TV news magazine 60 Minutes, you know that something has changed.

[ Take a look at some robots that are keeping humans safer. See DARPA Robot Challenge: Disaster Recovery. ]

Fortunately for workers and for those who understand the potential of new technologies, these ideas are essentially misguided speculation. They fly in the face of years of economic data as well as current trends.

They all fall into what economists call the "Lump of Labor" fallacy, the idea that there's a limited amount of labor to be done. In reality, labor markets aren't fixed. If jobs in one firm or industry are reduced, they're replaced by jobs in other areas of the economy. This is why we did not see massive unemployment as agriculture mechanized in the early 20th century -- the workforce shifted to other professions.

In addition, focusing on job loss creates a distorted view of the process of technological change. First, many businesses actually increase employment as they increase productivity rather than lay workers off, because productivity gains let them cut costs, in turn enabling them to increase sales. Second, savings from increased productivity are recycled back into the economy in the form of lower prices and/or higher wages that create demand that, in turn, creates even more jobs.

The neo-Luddite, anti-robot case is clearly refuted by the data and by scholarly research.


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