Manufacturers have been talking about automation and jobs for some time. Can robots replace human workers? Will we be able to find any qualified human workers, or will we be stuck with robots? Can robots and humans work together? How will robotic and human coworkers communicate in the new world of Industry 4.0?
Economists have something to say about that.
Miguel Morin eschewed speculation and instead did some historical analysis. He began with some penetrating questions:
- How many jobs were lost to water power?
- How many people were put out of work by steam power?
- How did electricity affect labor?
Having roused our interest, Morin went on to demonstrate that the rise of cheap electric power in the 1930s was one of the primary factors leading to job losses. In spite of the Great Depression, cheap electricity appears to have been responsible for as much as 80% of the job losses in the concrete industry, for one thing.
If you’re not convinced, check out the illustration at the top of this post, or the full presentation.
Georg Graetz and Guy Michaels studied a more recent period, 1993-2007, and a more contemporary question: the effects of robotics in particular. They found little effect on labor economics. Robot activity, they found in a survey of 17 countries’ data, made little difference in productivity and only a slight change in hours worked. They did appear to cost some low-wage workers jobs, and to increase higher-paid work, as many have suggested.
But 1993 was early days for robotics. By the 1930s, electricity was beginning to become widespread and inexpensive, and robotics may be on the cusp of that economic change now.
Game-changing technologies create a lag. They can raise productivity, but most industries aren’t ready to take advantage of them, and few workers have the skills they need to benefit from them. There may be, as Morin saw, a loss of jobs for a time. Then industry learns how best to use the new technology, productivity picks up, costs fall, and new jobs emerge.
The long-range result is increased jobs for people. Few among us now would yearn for the good old days when we could have gotten a job as a hand-mixer of concrete. It’s time to hold on and enjoy the ride.