In this morning’s NY Times, the editorial board has made the claim that those who point at automation as a factor in our current economic situation are wrong, specifically singling out Christine Lagarde and Barack Obama:
Defenders of globalization are on solid ground when they criticize President Trump’s threats of punitive tariffs and border walls. The economy can’t flourish without trade and immigrants.
But many of those defenders have their own dubious explanation for the economic disruption that helped to fuel the rise of Mr. Trump.
At a recent global forum in Dubai, Christine Lagarde, head of the International Monetary Fund, said some of the economic pain ascribed to globalization was instead due to the rise of robots taking jobs. In his farewell address in January, President Barack Obama warned 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.”
Blaming robots, though, while not as dangerous as protectionism and xenophobia, is also a distraction from real problems and real solutions.
They then go on to make an argument that is logically flawed:
And yet, the data indicate that today’s fear of robots is outpacing the actual advance of robots. If automation were rapidly accelerating, labor productivity and capital investment would also be surging as fewer workers and more technology did the work. But labor productivity and capital investment have actually decelerated in the 2000s.
Consider this possibility, Editors: perhaps the economy is decelerating despite the growing reliance on robots and AI. If we weren’t investing and deploying robots and AI as fast as possible, the economy would be sinking like a rock, perhaps, instead of barely growing at an effective rate of 1% per year.
I’m not making a case based on crunching numbers, I am simply point out that their logical construction is flawed.
And then, there’s the real numbers, which say that the Editors are wrong:
Wolfgang Lehmacher, Don’t Blame China For Taking U.S. Jobs
The U.S. has lost 5 million factory jobs since 2000. And trade has indeed claimed production jobs — in particular when China joined the World Trade Organization in 2001. Nevertheless, there was no downturn in U.S. manufacturing output. As a matter of fact, U.S. production has been growing over the last decades. From 2006 to 2013, “manufacturing grew by 17.6%, or at roughly 2.2% per year,” according to a report from Ball State University. The study reports as well that trade accounted for 13% of the lost U.S. factory jobs, but 88% of the jobs were taken by robots and other factors at home.
If not China, what then explains these jobs losses? It’s simple: factories don’t need as many workers as they used to, because robots increasingly do the work.
Investment in automation and software has doubled the output per U.S. manufacturing worker over the past two decades. Robots are replacing workers, regardless of trade at an accelerating pace. “The real robotics revolution is ready to begin” writes BCG and predicts that “the share of tasks that are performed by robots will rise from a global average of around 10% across all manufacturing industries today to around 25% by 2025.”
With increasing automation, the manufacturing industry is becoming more productive. From 1998 to 2012, all sectors experienced a productivity growth of 32% when adjusted for inflation — the production of computer and electronic products rose 829%. The researchers at Ball State University calculated: If 2000-levels of productivity are applied to 2010-levels of production, the U.S. would have required 20.9 million manufacturing workers instead of the 12.1 million actually employed.
And then there’s the intuitive argument: why would so many companies be looking to invest in automation if it doesn’t lead to a rise in productivity?
Today, the NY Times Editorial Board has shown itself to be out of touch with the realities of automation. I agree with their positions on behalf of American workers — they need higher pay, a stronger safety net, retraining and education — but simply looking back to the halcyon days of the post-WWII economic era won’t help us, today:
When automation on the farm resulted in the mass migration of Americans from rural to urban areas in the early decades of the 20th century, agricultural states led the way in instituting universal public high school education to prepare for the future. At the dawn of the modern technological age at the end of World War II, the G.I. Bill turned a generation of veterans into college graduates.
When productivity led to vast profits in America’s auto industry, unions ensured that pay rose accordingly.
Corporate efforts to keep profits high by keeping pay low were countered by a robust federal minimum wage and time-and-a-half for overtime.
Fair taxation of corporations and the wealthy ensured the public a fair share of profits from companies enriched by government investments in science and technology.
Productivity and pay rose in tandem for decades after World War II, until labor and wage protections began to be eroded.
Yes, but that era of automation was not like today’s. Grain combines displaced human labor on the farm but reapplied those workers in automation-supported factories: that’s not all the same as today’s AI and robots performing non-routine and cognitive work, which was formerly the sole province of well-educated, adaptable human beings. We’re not talking about mindlessly driving rivets into steel, we’re talking about highly-trained oil rig technician crews being cut from six team members to two because of better automation, or tens of thousands of financial planners being replaced by a single AI, or AI that is better at diagnosing patient’s ills than highly educated and experienced doctors.
The NY Times seems determined to ignore the reality that we will sooner or later have to oppose unchecked automation and the deployment of AI into every workplace niche if we will have any human employment at all in 2050. It’s not sufficient to only oppose income inequality, to advocate higher minimum wages or for more educational opportunities at every stratum of society.
No. Sooner or later we will have to actively oppose the onslaught of automation and AI, or else there will be no work left, at all, for any of us.