Advances in automation and artificial intelligence have renewed fears that robots will replace human workers, leading to mass unemployment. A working paper by published this month by the National Bureau of Economic Research on the effects of industrial robots on employment and wages in the United States between 1990 and 2007 showed that one new robot reduces employment by 5.6 workers. In their recent study, economists Daren Acemoglu of MIT and Pascual Restrepo of Boston University conclude that each additional industrial robot reduced employment in a given commuting area by 3-6 workers, and lowered overall wages by 0.25-0.5%.

An industrial robot is a fully autonomous machine that can be programmed to perform different manual tasks without a human operator or human supervision. According to the International Federation of Robotics, there are already between 1.5-1.75 million industrial robots in operation, with the automotive industry employing 39% of these robots.

"When robots compete against human labor," wrote Acemoglu and Restrepo, "we estimate that one additional robot per thousand workers now reduces aggregate employment to population ratio by 0.34 percentage points and aggregate wages by 0.5 percent." However, if the focus is "only on declines in employment in heavily-robotized manufacturing, and presume that employment losses in other sectors are due to local demand and will not directly translate into national effects, these effects can be as low as 0.18 percentage points for employment and 0.25 percent for wages."

A decrease of only 0.25 to 0.5% in employment is already leading the way for doomsday articles, such as this one from the New York Times, which paints a grim picture for the "large numbers of people out of work, with no clear path forward -- especially blue-collar men without college degrees." The article, titled Evidence That Robots Are Winning the Race for American Jobs, also suggests that job prospects are worse for men because of self-imposed constraints, such as their pride:

"Robots affected both men's and women's jobs, the researchers found, but the effect on male employment was up to twice as big. The data doesn't explain why, but Mr. Acemoglu had a guess: Women are more willing than men to take a pay cut to work in a lower-status field."

That is one explanation but it is also true that women's employment isn't affected by automation as much as men's because the lower-earning jobs typically held by women are harder to automate. Or, perhaps women who anticipate job losses due to automation are more willing to learn skills that robots are not able to duplicate yet, such as social skills and non-routine interactions. In a recent Harvard Business Review article on artificial intelligence, the authors explain that even if robots begin to replace humans in a variety of tasks, "this does not spell doom for human jobs, as many experts suggest. That's because the value of human judgment skills will increase."

As robots replace lower-skilled jobs held primarily by men, such as those in the automotive industry, men might transition into fields that are currently dominated by women, into occupations which have not yet been able to be fully automated because they require greater social or emotional sensing. What we might see then is an increase in wages in these particular women's fields - as more men enter the profession, the pay and status will increase because it is no longer a "pink-collar" job. An additional benefit to automation is that human workers will develop new cognitive or sensory skills to complement the routine tasks performed by the robot. These "soft skills", such as adaptability, creativity, and the ability to recognize nuanced emotions and respond to them appropriately, are in high demand for a wide range of jobs.

Published on: Mar 29, 2017