Robots and AI won’t end employment as we know it

Automation will be disruptive, but it won’t stop human labor in its tracks.


Mixabest, via Wikimedia Commons, public domain

Robots are taking over factory production

It isn’t hard to find alarming headlines concerning the rise of automation. Elon Musk thinks that, due to the rise of robots, governments will be forced to adopt a universal basic income. He’s not alone––Bill Gates wants to tax automated workers because of their disruptive effect. However, empirical economic research on automation raises fewer alarm bells. Although there will be negative harms from automation, the entire employment structure in the U.S. won’t be upended.

Historically, automation hasn’t reduced the number of jobs in the economy. Rob Atkinson, President of the Information Technology and Innovation Foundation, told the PEW Research Center, “I don’t think that automation is advancing any more rapidly than it has been. But in any case, automation has never led to fewer jobs in the economy in the past and never will in the future, for the simple reason that automation lowers prices which increases demand for goods and services, which in turn creates jobs.” Although there is likely to be a short-term employment disruption when jobs become automated, it won’t mean the number of jobs in the economy decreases in the long term.

In a paper published by the National Bureau of Economic Research, MIT economist David Autor further explains the historical consequences from automation saying that “short-term employment losses… were eventually more than offset by subsequent employment gains… In 1900, for example, 41 percent of the United States workforce was employed in agriculture. By 2000, that share had fallen to 2 percent. It is unlikely, however, that farmers at the turn of the 20th century could foresee that 100 years later, healthcare, finance, information technology, consumer electronics, hospitality, leisure and entertainment would employ far more workers than agriculture.” Robots and artificial intelligence will not replace human labor, but will complement it; just like past inventions led to the Industrial Revolution and not the replacement of all human work.

Even though there will be negative short-term economic harms due to artificial intelligence, there is still a net-benefit to supporting automation.”

— Gus Beringer

However, automation isn’t all good news. Autor concluded that, “While the long-run effects of these developments should in theory be positive, the adjustment process, as with technological adaptation, is frequently slow, costly, and disruptive.” The U.S. should be concerned about how disruptive automation will be to the U.S. labor market. It has the potential to cause massive labor inequality if the government doesn’t retrain workers and give them monetary support, as they lose their jobs to automation.

Even though there will be negative short-term harms from artificial intelligence, there is still a net-benefit to supporting automation. A 2016 White House report found that living standards and leisure hours, “increase, although to the degree that inequality increases––as it has in recent decades, it offsets some of those gains.” The United States government needs to maximise the benefits of AI, by lending support to people that lose their jobs to automation in order to offset increased economic equality.

Just because the composition of the American workforce drastically changed after the Industrial Revolution, didn’t make America worse off from industrializing. There is no stopping the relentless force of technological progress—and I, for one, welcome our new robot overlords.