Can We Adapt To the Rise of the Robot?
For some time, I've been collecting news stories about robots and jobs. By robots, I mean almost any automated process that substitutes machines for people. Here are some examples:
● The restaurant chain Chili's installed 45,000 computer tablets in its U.S. locations, says The Post. The tablets enable customers to pay their bills, play games and place some orders.
● One hotel is introducing a robot bellhop that delivers items to guests' rooms, reports the New York Times. The same story mentions automated golf caddies. Another Times story reports that the German firm Daimler has demonstrated a self-driving truck.
● Lowe's, the hardware chain, is testing a robot that greets customers and directs them to the correct aisle for purchases, says the Wall Street Journal. Once large and expensive, robots have so shrunk in size and price that small factories can use them, says another Journal story.
A specter haunts America: robots. There's a vague fear that continual advances in computing power and software will automate many more jobs. The threat transcends the business cycle. Almost everyone might ultimately be at risk. Could a robot write this column? It seems plausible. Some might even regard that as an improvement.
Ironically, the loudest warning comes from two champions of digital technologies, Erik Brynjolfsson and Andrew McAfee, scholars at the Massachusetts Institute of Technology and authors of "The Second Machine Age." Digitalization, they argue, creates services (Google, Facebook) and expands consumer choice. But there's also a dark side. "Progress is going to leave behind some people, perhaps even a lot of people," they write.
It's easy to see why. Competing with a robot can be futile. Consider a robot costing $25,000. Unlike the $25,000 worker, the robot's expense is one-time; it can work 24 hours a day, and there's no health insurance.
What's unclear is whether this differs from the past, when new technologies have created more jobs than they destroyed. The fear of technological unemployment isn't new. In the early 1800s, English workers destroyed mechanical looms to prevent these efficient machines from taking their jobs. One alleged leader was Ned Ludd - hence the term "Luddite," someone resisting new technologies.
In 1964, technology anxieties caused President Lyndon B. Johnson to create a national commission on automation. When it reported in 1966, the unemployment rate had dropped to 3.8 percent. "Technological shocks have been happening for decades, and ... the U.S. economy has been adapting to them," writes economist Timothy Taylor (whose Web site recounts the 1960s episode).
One reason is that new technologies typically involve lower prices, superior value or both. This creates a huge demand. Take airlines. After World War II, railroads still dominated intercity travel. But airlines' greater speed and increasing size, especially after the advent of jets in the late 1950s, made trains uncompetitive. Adjusted for inflation, airfares declined. While rail travel collapsed, the number of annual airline passengers rose from 19 million in 1950 to 737 million in 2012. In 2014, the industry employed 589,000 full- and part-time workers.
The same logic applies now. Someone has to design, program, service and coordinate the robots and other digitized processes. Job creation is inevitable.
Jobs also survive in sectors that seem largely immune to digitization - "whether it is taking care of the young or taking care of the old, or repairing a lot that needs to be repaired," as former Treasury Secretary Larry Summers recently put it. Human contact is wanted or needed in places where it seems obsolete. Logically, ATMs should have decimated bank tellers. In reality, the number of tellers (about 600,000) is slightly above its 1990 level, notes Taylor, citing a study by James Bessen of Boston University's law school.
The fear of technological job loss is real but, I suspect, exaggerated, because it occurs after a period when deep employment losses for other reasons - the financial crisis and Great Recession - have made people extra sensitive to any threat to their livelihoods. In this climate, the specter of hordes of job-destroying robots seems realistic. History suggests skepticism; strong job creation (11.5 million since 2010) is a real-world rebuttal.
But also temper the skepticism. The fact that new jobs have always replaced the old is an aggregate phenomenon. It does not shield all individuals. Waves of technological advances have always left losers - people whose factories moved or shut; or whose skills became obsolete; or whose firms succumbed to new competition. Often, the new jobs aren't where the old ones were and aren't suitable for their workers.
This is the crux of the matter. If the new skills demanded by robots cannot be easily supplied by America's workers, then there will be a fateful break from history. The question is, can we adapt? The past gives cause for confidence but no ironclad guarantee.