Why Robots Will Not Decimate
Human Jobs, by Bob Gordon, 11/19/16
Slow economic growth is the mantra
of political campaigns and economic angst. Growth in economic output per
hour (“labor productivity”) achieved an annual pace of 3 percent for a full
half-century between 1920 and 1970. Since 1970 that rate has slowed to
about 1.5 percent, and in the last six years productivity growth has slowed
further to a lamentable 0.5 percent annual rate.
My book The Rise and Fall of American Growth attributes
this enormous contrast between rapid growth in 1920-70 and slow growth after
1970 to the basic nature of inventions.
Growth in the middle of the 20th
century was propelled by the invention in the late 19th century of electricity,
the internal combustion engine, the telephone, chemicals and plastics, and the
diffusion to every urban household of clear running water and waste
removal.
America made a transition from 50 percent of the working population
on farms to a largely urban nation, and the drudgery of household work –
carrying water in and out, doing laundry on a scrub board – made a transition
to modern bathrooms and kitchens by the 1950s.
The digital revolution associated
with computers has since 1960 dominated the sphere of innovation, as office
work transitioned from the typewriter and old-fashioned calculator to the new
world of personal computers, spreadsheet and word processing software, the
internet, and search engines. But the impact of this revolution in
boosting productivity growth lasted only one decade (1995-2005), a much shorter
impetus than occurred earlier in the century when productivity growth achieved
its 3 percent annual pace for five decades from 1920 to 1970.
Why? The computer revolution
altered office work but did not extend into everyday life as had the earlier
inventions that brought us electricity, motor vehicles, and the modern kitchen
and bathroom. Smart phones were introduced by Blackberry in 2003 and by
Apple in 2007, but their uses are primarily to boost consumer enjoyment through
social networks and game-playing, not a part of the market economy that creates
jobs and pays wages.
Why has productivity growth been so
mediocre, a 0.5 percent annual pace since 2010? In my view this has
occurred because most of the benefits of the digital revolution were over by
2005. Everywhere you look, from corporate offices to check-in desks at
doctor, dentist, and veterinarian offices, the equipment on the desks is the
same as in 2005, as is most of the software.
This slackening of the pace of
economic growth due to the minor impact of new innovations has both a
pessimistic and an optimistic aspect. Slow productivity growth dampens the
ability of business firms to provide wage increases to their workers. But
slow productivity growth also means that steadily growing output continues to
provide new jobs, 15.5 million of which have been created in the U.S. since
early 2010.
But how can so many jobs be created
in a world of technological hype of robots taking over the economy? Aren’t robots about to decimate
jobs, throwing half the population out of work as has been predicted to occur
over the next decade by the two Oxford economists in 2013, Carl Frey and
Michael Osborne?
Robots are nothing new; the first
industrial robot was introduced by General Motors in 1961, and by the mid-1990s
robots had a major role in automobile factories, welding together body parts
and freeing human workers from the noxious fumes of the auto paint shop. But
robots have made little impact outside of manufacturing. Even Amazon’s
high-tech warehouses use robots just to move shelves to human workers, who
hand-select the items to be shipped as well as the packing material, and pack
the shipments by hand.
But outside of manufacturing and
wholesale warehouses, robots are hard to find. I play a game called “find
the robot.” In my daily strolls in and out of supermarkets, restaurants,
doctor and dentist offices, my nearby hospital, offices in my own university,
and the vast amount of employment involving elementary and secondary teachers,
personal trainers, and old age caretakers, I have yet to find a robot.
In my journeys, the closest thing I
have found to the introduction of a robot in the service sector is that in a local
casual dining restaurant, there are kiosks on the tables to allow patrons to
pay their bills without human intervention.
But offsetting that is the fact that
my local supermarket recently removed its self-checkout electronic kiosks to be
replaced by human express checkout agents, apparently due to excessive fraud as
customers slid expensive items by the dumb credulity of the self-checkout
kiosks.
The Frey and Osborne pessimism about
jobs is total fiction. They predict over the next decade that 55 percent
of airline pilot jobs will be eliminated. Sorry, but government
regulations require two pilots in a commercial aircraft, and a switch to one
pilot per aircraft is nowhere in sight. They predict that 92 percent of
retail checkout clerk jobs will be eliminated, but there is no robot-like
replacement of retail clerks in sight beyond the 30-year-old invention of
bar-code scanning.
Surely multiple-function robots will
be developed, but it will be a long and gradual process before robots outside
of manufacturing and wholesaling become a significant factor in replacing human
jobs in the service, transportation or construction sectors. And it is in those
sectors that the slowness of productivity growth is dragging down the economy’s
overall performance.
My book concludes that the rapid
economic growth of the mid-20th century cannot be repeated. Those “Great
Inventions” were too important and too pervasive to happen again anytime
soon. But let us not forget, the corollary of slow productivity
growth is the rapid creation of jobs, as we have witnessed in the last six
years and will enjoy for the foreseeable future.
Robert
J. Gordon is professor in social sciences at Northwestern University and
the author of The Rise and Fall of American
Growth,
one of six books on the shortlist for the 2016 Financial Times and
McKinsey Business Book of the Year Award, to be announced Nov. 22.
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