The Fight Against Robots Is a Fight Against Prosperity
Those who rail against free trade as a job killer are beginning to grasp that they are boxing a shadow. The realization that jobs aren’t going to Mexico or China so much as to robots, digitization, and other technologies has spawned the emergence of a new Ludditism, aimed at saving jobs by stopping or slowing technological advancement. But all it could ‘save’ us from is greater prosperity.
The recognition that Americans (and those in other developed countries) are not being replaced by foreigners so much as by robots has seeped through, spawning a new target. The same job-protection impulse that drives opposition to free trade is being directed against the technologies that are actually causing dislocation in the workforce, and it is just as misplaced and counter-productive. In New York, cab companies are demanding a ban on self-driving cars, citing job losses. One group is even calling for a 50-year moratorium to be placed on autonomous vehicles. Elsewhere, taxi companies are trying to block ridesharing services with human drivers. Microsoft founder Bill Gates has even suggested that robots be taxed to help humans keep their jobs, or pay for adjustment costs.
Let’s skip quickly over the hypocrisy inherent in such arguments: In the early 1980s, when Microsoft was getting off the ground, should we have imposed a tax on computer software, which also makes many jobs redundant? A century ago, should we have imposed a 50-year-ban on automobiles, to protect the jobs of drivers of Hansom cabs? And if we had, would Gates and cab plate owners – and the rest of us – be better or worse off today?
More importantly, trying to stand in the way of new technologies to save jobs is self-defeating. Both improved living standards and social stability depend on constant economic growth. Either we continuously bake a bigger pie, or we end up fighting over the crumbs. Economic growth, in turn, depends on improved productivity, which depends on leveraging technology –– to reduce the amount of labor, capital, energy or materials that go into producing goods. Virtually every new technology from the spinning wheel to the combine to digitization has eliminated somebody’s job, which is why technological progress has continuously prompted many to attempt to stand in the way and shout ‘halt’, going back even before the original luddites tried to destroy weaving machines in 19th-century England. But banning any technology would have made us all poorer today. An American worker today earns more (in terms of buying power) in 10 minutes of work than mid-19th century English mill workers earned in a 12-hour day. Technology has made us more productive, and improved productivity has made us better off.
Looking forward, automation is not only consistent with economic growth, it is crucial to the improved productivity that makes it possible. Up to half of the productivity growth needed to ensure a 2.8 percent annual growth in GDP over the next 50 years will be driven by automation, according to the McKinsey Global Institute. Improved productivity draws the increased investment and economic spin-offs that lead to jobs. A study by Deloitte in 2015 found that technology in the U.K. has contributed to the creation of more than four times as many jobs as it has eliminated. In fact, countries with the highest robot density, notably Germany and South Korea, have among the lowest unemployment rates. In the United States, the most robotics-intensive manufacturing sectors – automotive, electronics and metals - employ about 20 percent more mechanical and industrial engineers and nearly twice the number of installation maintenance and repair workers than less robotics-intensive manufacturing sectors. And they pay higher wages than other manufacturing sectors, according to analysis by PwC of data from the Bureau of Labor Statistics.
It is easy to think that technology makes us worse off, because sunset jobs are easy to identify while sunrise jobs are often hard to see. But it is important to look. Otherwise, new robot taxes and technology moratoria could prevent us from benefiting from the improved productivity and wealth creation that new technologies spawn.