Automation and the Middle Class

Thre agentsIf you’re keeping up on manufacturing, there are a couple of topics that never go away: how come we don’t have the workers we need, and why are robots taking our jobs? The two things go together largely because, according to conventional wisdom, what we really need is workers with the knowledge and skills to work well with robots. That way everyone wins. Low cost workers can step up as robots replace them, and better-paying new jobs will open up.

The Wall Street Journal talked with Larry Summers about this issue and, while he spoke in favor of education, he wasn’t convinced that there would be enough middle class jobs to replace the low-paying jobs done by robots once the shift to automation is complete. Jeremy Rifkin said much the same thing, suggesting that jobs requiring social skills will be the ones to emerge as productivity continues to increase.

Once productivity is high enough that fewer workers are required across the board, the few engineers, machine operators, and technicians still needed will have jobs. The rest of the displaced workers can’t rely on education, the economists say. They will have to be able to do things that machines can’t, like caring for the elderly (says Rifkin), or else they will have to gain greater power (says Summers). Ravi Bara, another economist, agrees that the gap between productivity and wages is the source of problems for workers — and work done by automation is the ultimate producer of that gap.

Those who share these economists’ ideas in the tabloids foresee an ever-widening gap between the haves and have-nots until we have a super-elite of techies and armies of downtrodden service workers waiting to be replaced by androids. They could be wrong.

Think how many jobs exist now which did not exist just 25 years ago. Did the first Rexroth workers, turning out hammers at their water-powered hammer mill, foresee what Rexroth would come to in the 21st century? If they had, they might have worried that their hammer mill skills wouldn’t be needed and they would be out of work.

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