009. January 2022
Automation, a real force to be dealt with
Some technology experts have predicted that automation will lead to a jobless future, while other observers are more sceptical about such scenarios.
The fear that the large-scale introduction of robots will eliminate a significant number of jobs is a fact of life, but how many jobs will robots actually replace?
Some technology experts have predicted that automation will lead to a jobless future, while other observers are more sceptical about such scenarios.
According to the study “Robots and Jobs: Evidence from US Labor Markets” by MIT economist Daron Acemoglu and Pascual Restrepo PhD ’16, an assistant professor of economics at Boston University, the impact of robots varies widely by industry and region and may play a notable role in exacerbating income inequality, while also highlighting a real impact, although below some assumptions. “We find quite large negative employment effects,” says MIT economist Daron Acemoglu, although he notes that the impact of the trend may be overstated.
In commuting zones where robots were added to the workforce, each robot replaces about 6.6 local jobs.
Between 1990 and 2007, according to the study, one additional robot for every 1,000 workers reduced the national employment-to-population ratio by about 0.2 %, with some areas of the United States being affected much more than others. This means that each extra robot in manufacturing replaced about 3.3 workers at a national level, on average. That increased use of robots in the workplace also reduced wages by about 0.4 % over the same period. “We find negative wage effects, that workers are losing out in terms of real wages in the areas most affected because robots are pretty good at competing against them,” says Acemoglu.
Acemoglu and Restrepo used data on 19 industries, compiled by the International Federation of Robotics (IFR), a Frankfurt-based industry group that keeps detailed statistics on robot deployment worldwide. The academics combined that with US-based data on population, employment, business and wages from the US Census Bureau, the Bureau of Economic Analysis and the Bureau of Labour Statistics, among other sources. In addition, it compared robot deployment in the US with other countries, finding that it lags behind that of Europe. From 1993 to 2007, US companies introduced almost exactly one new robot for every 1,000 workers; in Europe, companies introduced 1.6 new robots for every 1,000 workers.
“Although the US is a very technologically advanced economy, in terms of production and use of industrial robots and innovation, it is behind many other advanced economies,” says Acemoglu. In the US, four manufacturing industries account for 70 % of robots: automakers (38 %), electronics (15 %), chemicals and plastics (10 %) and metal fabricators (7 %).
The manufacturing jobs they replace come from parts of the labour force that do not have many other good employment options.
According to the researchers, in commuting zones where robots were added to the workforce, each robot replaces about 6.6 jobs locally. However, in a slight turn of events, the addition of robots in manufacturing benefits people in other industries and other areas of the country by reducing the cost of goods, among other things. These national economic benefits are why the researchers calculated that adding a robot replaces 3.3 jobs for the country as a whole.
The issue of inequality
When conducting the study, Acemoglu and Restrepo went to great lengths to see whether employment trends in areas with heavy robot traffic might have been caused by other factors, such as trade policy, but they found no complicated empirical effect.
However, the study suggests that robots directly influence income inequality. The manufacturing jobs they replace come from parts of the labour force that do not have many other good employment options; as a result, there is a direct connection between automation in industries that use robots and declining worker incomes.
The robot effect is very tangible in manufacturing, with important social implications
When robots are added to manufacturing plants, “The burden falls on low- and middle-skilled workers. So that’s really an important part of our overall research [on robots], that automation is actually a much larger part of the technological factors that have contributed to the rise in inequality over the last 30 years.”
So while claims about machines completely eliminating human labour may be exaggerated, Acemoglu and Restrepo’s research shows that the robot effect is very real in manufacturing, with important social implications. “It certainly won’t give any support to those who think robots are going to take all our jobs,” says Acemoglu. “But it does imply that automation is a real force to be dealt with.”
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