The robots are coming — but not in numbers that would imperil most Americans’ jobs.
Few subjects have inspired as much hype as robots. Consider some sample headlines: “Robots and Computers Could Take Half Our Jobs Within the Next 20 years,” “Robots Could Put Humans Out of Work by 2045,” “Why the Highest-Paid Doctors Are the Most Vulnerable to Automation.”
Here’s why you should be skeptical, at least in the near term.
First, there’s little evidence that robots have yet had much effect on job creation in the current recovery. Since a low point of payroll jobs in February 2010, the economy has added 14 million jobs. These figures surely obscure countless thousands of jobs lost to automation, but that’s a normal part of a dynamic economy.
Second, the actual number of robots doesn’t suggest a huge impact either. In 2014, American firms installed 26,200 industrial robots, according to the International Federation of Robotics. That’s tiny compared with present payroll employment of 144 million, including 12 million manufacturing jobs. Even making generous assumptions about robots in stores or service jobs, the total remains modest. (In 2014, the U.S. industrial robotics market was the third largest, ranking behind China with 57,096 installations and Japan with 29,300.)
Finally, robots aren’t new. In his monumental study of U.S. innovation (“The Rise and Fall of American Growth”), economist Robert Gordon notes that General Motors introduced industrial robots in 1961. “By the mid-1990s, robots were welding automobile parts and replacing workers in the lung-killing environment of the automotive paint shop,” he writes. But the adoption of robots outside the manufacturing and wholesaling sectors will be a “long and gradual” process.
The alarmist headlines at the start of this column appeared in various publications and are quoted in an essay by Richard Freeman, a Harvard labor economist. As he notes, “most economists” (including Freeman) doubt the gloomy predictions of mass unemployment. True, robots enjoy some advantages over humans; they can work 24 hours a day and don’t have fringe benefits. Still, the economists have history on their side. It’s all happened before.
There is no conceptual difference between robots and earlier labor-saving technologies, including the switch from steam power to electricity and the adoption of the assembly line. Although innovation hurts some industries and workers, it helps others by inspiring new products or reducing prices. Low prices spurred demand for both the Model T and smartphones. Meanwhile, new satellite industries arise — say, cybersecurity now.
Finally, there’s inertia. Some innovation occurs slowly, because it encounters practical problems. Take driverless vehicles — self-propelled robots — which have received huge publicity. They are unlikely to become widespread soon. Dozens of regulatory issues need to be settled. Nor is it clear what the demand for driverless vehicles will be.
Consider. An opinion survey by Brandon Schoettle and Michael Sivak at the University of Michigan found that only 16 percent of respondents wanted self-driving vehicles; 39 percent preferred “partially self-driving” and 46 percent wanted no “self-driving” features. Safety is one anxiety. Cost may be another. Presumably, car prices would be higher, reflecting the costs of software, sensors and electronics. Will drivers pay the premium, especially when today’s cars last longer than ever? (The average age of today’s vehicles is 11 years, up from five years in 1969, reports the Transportation Department).
All these factors argue against the doomsday specter of robots creating mass unemployment. Of course, dramatic increases in the minimum wage will quicken the pace of automation. More jobs will be lost.
Still, the real problem, suggests Harvard’s Freeman, is not jobs, but wages. The added competition from robots will depress workers’ wages and salaries. This could happen, but it’s an open question and overlooks an important countervailing force. As baby boomers age and retire, growth in the labor force is slowing. Workers may become scarce, pushing up their wages.
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