In recent years, more than a few economists, politicians, and Silicon Valley entrepreneurs have expressed concerns about the coming “robot revolution.” In fact, one of the major arguments in favor of a universal basic income is that the robots are coming for all of our jobs. It’s subject to debate exactly how far the potential effects of this revolution will trickle, but some economists estimate that up to 47 percent of American workers are at risk of losing their jobs due to automation. The World Bank puts that number closer to 57 percent.
To date, however, economists haven’t really attempted to pin down precisely how robots have already affected labor markets. New research from Massachusetts Institute of Technology economists Daron Acemoglu and Pascual Restrepo, which the authors summarize here, attempts to do just that. Their conclusions aren’t encouraging.
For starters, the number of industrial robots in play has skyrocketed over the years. As the chart to the left (from the summary) demonstrates, industrial robots per 1,000 workers in the United States and Europe have steadily ticked upward between 1993 and 2007.
The authors then turned to analyzing the effects of the robots on employment and wages. Here’s what they found:
Our results show a strong relationship between a commuting zone’s exposure to robots and employment. In the areas most exposed to robots, between 1990 and 2007 both employment and wages declined in a robust and significant way. During this period, we estimate that, relative to other areas, the introduction of a new robot per 1,000 workers in a commuting zone reduced the local employment-to-population ratio by 0.37 percentage points and local wages by 0.73%. This is equivalent to 6.2 workers losing their jobs for every robot.
The effects are somewhat smaller when the authors allow for potential spillover positive effects in other commuting zones, but they’re still negative and robust.
According to most analyses of the 2016 election, a potent combination of economic and racial anxiety contributed to the surprise victory of Donald Trump. Angry blue-collar workers, particularly in the Rust Belt, voted for a candidate who promised to go after immigrants and factory workers in China and Mexico who were allegedly stealing “American” jobs. Robots didn’t get much attention from Trump, even though the occupations and workers most affected by robots so far have been, according to Acemoglu and Restrepo, “routine manual, blue collar, assembly and related occupations” and “workers with less than college education.”
This is not a problem that is going away. While most economists believe that the economic threat posed by China is declining, the opposite is true of automation. In the decades to come, more and more American workers — from retail workers to truck drivers — will be at risk of losing their jobs due to automation. If the past is a reliable indicator, these trends will place grave stress on our social compact and our democracy.
In his farewell speech, President Barack Obama took the time to warn us about the robot revolution, saying that “The next wave of economic dislocations won’t come from overseas. It will come from the relentless pace of automation that makes a lot of good, middle-class jobs obsolete.”
Here’s hoping the current administration is paying attention.