What Impact Does Robotics Have On The Labor Market?

Most predictions into the impact of new technologies on the workforce have been of a speculative nature in terms of both how the technologies will evolve, and how the labor market will respond.

A paper published last year by the London School of Economics examined actual employment data from the last few decades.  It looked at the role technology plays in economic recoveries, both in terms of economic growth and the number of jobs.

They explored data across 28 different industries in 17 countries over a period spanning 1970 to 2011, during which 71 economic recoveries occurred. When the numbers were crunched, the researchers found no real difference in terms of the joblessness of recovery in industries prone to automation, and those that were not, and this was consistent across nations, with the notable exception of the United States.

This apparent American outlier was confirmed by a second paper published recently in the National Bureau of Economic Research.  The paper examined 19 industries over a similar timeframe to that explored by the LSE team, with all 19 of the industries having introduced industrial robots (as opposed to AI) over that timeframe.

Robotic colleagues

The data comes to a similar conclusion to the LSE paper, in that those industries investing most in industrial robotics did indeed suffer lower employment levels, with each robot equating to around six human employees.

They are at pains to point out, however, that this is not to be taken as a sign of jobs being destroyed, or indeed that this technological disruption is a new thing.

“The process of machines replacing human labor is not something that is new,” they say. “It’s been going on for 200 years. Why is it the case that we still have so many jobs?”

The destruction of some jobs, the creation of others has been ongoing for centuries, and there is nothing to suggest that this won’t occur in the future as well.  The transition between jobs however is far from easy, and can, the authors admit, be rather painful.

“Communities that have been more exposed to automation,” the author says, “do not tend to be doing well in terms of employment and wages.”

They’re regions where new jobs don’t seem to be emerging, or the new industries that are created are not able to absorb displaced workers.  It’s a process that has already had a profound impact on post-industrialized towns and regions in much of the developed world already, with many from these areas voting for policies like Brexit or politicians like Donald Trump as a response to their difficulties.

Helping the hard to reach

This is an issue I’ve touched on before, and indeed a recent report from the UK Government Office for Science highlighted the challenges in getting people engaged with adult education.

The report says that adult education in the UK is declining, and participation declines more as we age. What’s more, those that do engage in education as adults tend to be wealthier and come from a high existing skill level.

Those with fewer qualifications to begin with would often cite barriers such as a lack of confidence, lack of interest and a sense that they’re too old.

Effectively managing this transition is vital however, as technological advancement is crucial to improving standards of living across society.  There is no suggestion that attempting to halt the march of technology is good for society, yet precious few societies in the western world appear ready and able to support the current transition any more effectively than they have previous transitions.

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