The powers that be want to remain the powers that be. A favorite tactic is to concoct a semi-plausible theory to distract folks from the real problem. If the real problem isn’t addressed there will be no real solution. In the focus of this post the real solution is to increase the power of workers, the problem is stagnant wages. The distraction is the ongoing “robot scare” being spread by lots of folks that have never even seen the inside of a factory.
With some clever charts the Economic Policy Institute demonstrates that robots and automation are not the primary threats to jobs and wages but are much more useful as a distraction from the real solution in Robots, or automation, are not the problem: Too little worker power is…
The fear of job-stealing robots has been recently stoked in the media and pundits frequently refer to automation as a key driver of long-term middle-class wage stagnation. But are robots actually transforming the labor market at an unprecedented pace? Nope—in fact, the opposite is true. First, it’s important to note that technology and automation have consistently transformed the way work gets done. So, technology itself is not a problem. Robots and automation allow us to increase efficiency by making more things for less money. When goods and services are cheaper, consumers can afford to buy more robot-made stuff, or have money left over to spend on other things. When consumers spend their leftover cash on additional goods and services, it creates jobs. These new jobs help compensate for the jobs lost to automation.
But are robots now eroding jobs and replacing human labor at a faster pace that the economy can’t absorb? Again, no. Perhaps surprisingly to some, the data on investments and productivity do not reveal worrisome footprints of accelerated robot activity: in fact, in recent years the growth of labor productivity, capital investment and, particularly, investment in information equipment and software has strongly decelerated in the 2000s. There is no basis for believing that robots or automation are having an unusual transformative effect on the labor market.
The first chart below shows that productivity and capital investment did indeed accelerate during the late 1990s tech boom. But productivity and capital investments were much slower in the recovery from 2002–2007, and decelerated further in the period since the Great Recession.