Saturday, March 25, 2023

Robots Have Been About to Take All the Jobs for 100 Years

From Pessimists Archive and Louis Anslow. It definitely worth it to click on the link since they have pictures of lots of scary newspaper headlines. Excerpts:

"The rise of horseless carriages, mass production and other new forms of automation in the first two decades of the 20th century created anxieties about the future of work and employment. A short and sharp depression in the first year of the new decade (1920s) helped create unease too.

In a 1922 commencement speech at Wellesley College, President of the Rockefeller Foundation - Raymond B. Fosdick pondered: “Can education run fast enough” for people to beat the machines. A number of books would be written regarding the subject. ‘Social Decay and Regeneration’ - published in 1921 - would be reviewed by the New York Times under the title ‘Will Machines Devour Man?’, accompanied by an provocative illustration of someone being fed into a sausage making machine."

"The start of the Great Depression (1930s) and the subsequent mass unemployment must have seemed like the fulfillment of the popular prophecy of the previous decade (and century): that automation would eventually render too many unemployed and cause societal disorder. Without a concrete cause for this sudden and shocking economic turmoil, even societies greatest thinkers would reflexively finger automation as a key cause.

Einstein implied as much in 1931 when he blamed the “great distress of current times as the result of man-made machines”, while Keynes would cite automation as a key part of the present economic strife saying “We are being afflicted with a new disease, technological unemployment.”  The term was a timely neologism that would quickly be adopted.

The rise of recorded sound and its visible impact on musicians was widely reported and offered corroboration to concerns. The ever growing concern prompted Henry Ford to write an op-ed in The New York Times ‘World’s Fair Edition’, defending machines and automation in which he’d say: “There are those who appear honestly to think that the only way to return idle men to work is to destroy the one thing that makes their jobs possible.” He pushed back against a tax on automation, noting that for every job taken, 100 new ones are created - citing his Ford Motor Company as an example."

Others who publicly worried about "machines taking all the jobs" over the years include President Franklin D. Roosevelt, United Nations International Labour Organization, President Kennedy, Time Magazine, UK Prime Minister James Callaghan, and The New York Times. Again, the article by Anslow is worth reading and looking at.

There are different types of unemployment (seasonal, frictional, structural and cyclical).

Structural-unemployment caused by a mismatch between the skills of job seekers and the requirements of available jobs.

One example of this is when you are replaced by a machine. Another example is when there is a fall in demand for your product, so you get laid off, like with typewriters since people now use computers. A third example is geographical, when the jobs are not in your region of the country. 

But right now the unemployment rate is just 3.6%. The percentage of 25-54 year olds employed was 80.5% in Feb., higher than any time from 1948-1995 and 2002-2019.

In some cases, robots are used because there are not enough workers. There are a couple of links on this under "Related posts" below.

Here is something from Nobel prize winning economist Paul Krugman that is related. He shows how machines replacing workers does not increase unemployment. See The Accidental Theorist. Excerpts:

"Imagine an economy that produces only two things: hot dogs and buns. Consumers in this economy insist that every hot dog come with a bun, and vice versa. And labor is the only input to production."

"It so happens that I am about to use my hot-dog-and-bun example to talk about technology, jobs, and the future of capitalism. Readers who feel that big subjects can only be properly addressed in big books--which present big ideas, using big words--will find my intellectual style offensive. Such people imagine that when they write or quote such books, they are being profound. But more often than not, they're being profoundly foolish. And the best way to avoid such foolishness is to play around with a thought experiment or two.

So let's continue. Suppose that our economy initially employs 120 million workers, which corresponds more or less to full employment. It takes two person-days to produce either a hot dog or a bun. (Hey, realism is not the point here.) Assuming that the economy produces what consumers want, it must be producing 30 million hot dogs and 30 million buns each day; 60 million workers will be employed in each sector.

Now, suppose that improved technology allows a worker to produce a hot dog in one day rather than two. And suppose that the economy makes use of this increased productivity to increase consumption to 40 million hot dogs with buns a day. This requires some reallocation of labor, with only 40 million workers now producing hot dogs, 80 million producing buns."

"Yes, technological change has led to a shift in the industrial structure of employment. But there has been no net job loss; and there is no reason to expect such a loss in the future. After all, suppose that productivity were to double in buns as well as hot dogs. Why couldn't the economy simply take advantage of that higher productivity to raise consumption to 60 million hot dogs with buns, employing 60 million workers in each sector?

Or, to put it a different way: Productivity growth in one sector can very easily reduce employment in that sector. But to suppose that productivity growth reduces employment in the economy as a whole is a very different matter. In our hypothetical economy it is--or should be--obvious that reducing the number of workers it takes to make a hot dog reduces the number of jobs in the hot-dog sector but creates an equal number in the bun sector, and vice versa. Of course, you would never learn that from talking to hot-dog producers, no matter how many countries you visit; you might not even learn it from talking to bun manufacturers. It is an insight that you can gain only by playing with hypothetical economies--by engaging in thought experiments."
Related posts:

Answering the Call of Automation: How the Labor Market Adjusted to the Mechanization of Telephone Operation (2022) 

Are Robots Going to Steal Our Jobs? Many technologists think so, but economists aren't so easily convinced (2017)

Meet the Army of Robots Coming to Fill In for Scarce Workers (2022)

Automation Can Actually Create More Jobs  (2016)

Warehouses Look to Robots to Fill Labor Gaps, Speed Deliveries  (2021)

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