Automation and Jobs

by John McClaughry

Two weeks ago Robert Samuelson, my favorite economic columnist for the Washington Post, wrote a column entitled “Why robots won’t steal all our jobs.”

Says Samuelson, “The robots won’t destroy all our jobs. History suggests just the opposite — that new technologies inspire new jobs. So concludes a study from leading labor economists. It’s a useful antidote to widespread fears that robots and “artificial intelligence” will displace millions of workers and lead to permanently high joblessness.

“The new study doesn’t deny that jobs will be lost. But that’s not the end of the story, say David Autor, a well-known labor economist at MIT Anna Salomons of Utrecht University. Jobs have been lost before to new technologies, but these same technologies also create productivity increases — efficiency gains — that usually generate more jobs than were initially lost.”

“Autor and Salomons focused on 19 advanced nations from 1970 to 2007. Generally, employment declines initially triggered by productivity gains were later offset by larger job increases…Every 10 percent gain in productivity resulted in a 2 percent gain in employment spread over four years. This was an important contribution to job growth, though the largest employment gain came from old-fashioned population increases.”

“The main takeaway is this: Trying to save jobs by protecting old jobs from new technologies and other productivity-enhancing changes is self-defeating; employment may benefit temporarily, but the diffuse process of creating jobs and raising living standards will be frustrated.”

- John McClaughry is vice president of the Ethan Allen Institute.

{ 1 comment… read it below or add one }

Mark Shepard July 28, 2017 at 9:53 pm

One major outcome from automation is that as it increases productivity it lowers costs, thus making products affordable to more and more people. With more people able to buy the product, production of the product increases to meet the demand and results in new jobs to fill the need. This need is not just in the production sector, but also in the sectors before and after production that interact with the product: marketing, sales, installation, service, etc. Then all those people like to eat and enjoy other aspects of life with what they are earning. The net result is a higher standard of living more many many people.

For full disclosure, I have owned and operated an automation controls business since I started it in 1993. So I certainly gain personally from automation, but you would be hard pressed to find an American who has not personally benefited from automation. For example, automation is why almost everyone can own a car that actually runs most of the time.

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