No, Robots aren't taking our jobs

The impact of mechanization on human employment has been a long-held concern. Long before robodoctors, drones and self-service checkouts the Luddites waged war with technology, smashing and burning the labour-saving machines they considered a threat to their livelihoods. Today, people like Tyler Cowen predict that the rise of intelligent machines will result in a society where the top 15%  are fantastically successful and wealthy, but much of the traditional work of the lower and middle-classes is performed by robots and automation. Indeed, a much-cited 2013 study by the Oxford Martin Programme on the Impacts of Future Technology found that 47% of total US employment is at ‘high risk’ of computerization and could be automated within the next few decades. ‘Threatened’ sectors include transport, logistics and office administration, but surprisingly also the service sector, which is currently responsible for many of the new jobs created in developed economies.

Technological progress tends to have two differing effects on employment. At first there is displacement, as workers are substituted for new technology. However, efficiencies gained from automation often reduce prices, increasing real income and the demand for other goods. Companies will move into industries where productivity and demand is high and create new jobs, or use new technology to create new industries. Automation also frees up displaced workers to utilize their skills in other, potentially more fulfilling and creative ways.

Setting aside something like the singularity the economic impact of robots depends on whether they destroy more jobs than they create, and which section of society gains most from the opportunities they bring. At the moment, nobody really has a clue what  future economic impact robots will have. Even a survey of nearly 2,000 experts in robotics and AI found that they were split down the middle in terms of techno-optimism (believing that robots will create more jobs than they replace) and techno-pessimism (that the rise of robots will inevitably adversely effect a significant number of blue and white collar workers).

Until now, there’s actually been very little empirical work done on the economic impact of the use of robots.  However, a new paper — ‘Robots at Work' —from the Centre of Economic Performance at the LSE makes a welcome contribution to the field.

Using data from industries in 17 developed countries between 1993-2007, the report finds that ‘robot densification’ has no statistically significant effect on total hours worked over the period. This suggests that the use of robots has not (on net) resulted in less work opportunities for humans.

It has, however, had significant, and positive, effects elsewhere. The study found that the contribution robots make to economic growth is substantial, at 0.37 of GDP growth, and accounted for one-tenth of aggregate growth over the period. They also raised annual labour productivity by 0.36 points, comparable to steam technology’s boost to British labour productivity between 1850-1910. They also found that robot densification increased both total factor productivity and wages.

Industrial robots were used in under a third of the economy during the study period, and accounted for only around 2.25 percent of capital stock even within robot-using industries. The authors suggest that the likely contribution of robots to future growth is substantial, particularly when considering their potential impact in developing countries.

There is one note of warning, though — whilst the study found no overall impact of robot densification on hours worked, the use of robots did have a negative and close to significant impact on the hours worked by low-skilled workers, and, to a very small extent, those of middle-skilled workers. Presumably time will tell whether this is trend truly worthy of concern, and whether displaced workers are able to find alternative jobs elsewhere. For now, though, this study suggests that robots are tools which assist with and complement our jobs, as opposed to threaten them.

There's less to this robots will steal all our jobs story than you might think

We've another of those spine chilling warnings that the robots are going to come and steal all our jobs:

From self-driving cars to carebots for elderly people, rapid advances in technology have long represented a potential threat to many jobs normally performed by people.

But experts now believe that almost 50 per cent of occupations existing today will be completely redundant by 2025 as artificial intelligence continues to transform businesses.

A revolutionary shift in the way workplaces operate is expected to take place over the next 10 to 15 years, which could put some people's livelihoods at risk.

Customer work, process work and vast swatches of middle management will simply 'disappear', according to a new report by consulting firm CBRE and China-based Genesis.

We could all get very worried and ponder what it is that people might do. Alternatively we could be sensible and give the correct answer: something else. And even if that something else is something that isn't currently thought of as a "job" that doesn't matter one whit.

For we don't actually care whether someone, anyone, has a job. We don't, really, care whether they have an income either. What we do care about is that everyone has the opportunity to consume. And if the robots are off making everything then obviously there's lots to consume. So we've not got a basic nor an insurmountable problem here. All that's necessary is some system of getting what is produced into the hands of someone who can consume it.

And oddly enough we've got that system, that market for labour. We've had it for many centuries. The idea that someone might make a living as a writer of books (as opposed to a court funded artiste) would have been ridiculously exotic a few centuries back. The idea that a sprinter might make a living from sprinting was near illegal only 50 years ago. The idea that someone can make a living as a free market diversity adviser (they're not all tax funded) still seems pretty exotic to us frankly.

As has happened before, as has been happening for centuries, as the machines take over the much spreading then the muck spreaders go off to do something else. Usually, something a little less smelly and more enjoyable for a human being to do.

And there's one more observation we should make here. 50% of the jobs are going to disappear in 15 years? Pah! Lightweights.

For people always forget about "jobs churn". The economy destroys some 10% (for the UK, 3 million) jobs each year. Unemployment doesn't rocker by that amount because the economy also, roughly you understand, creates 3 million jobs each year. Those that disappear might appear to be the same as those that are created but they're almost always not quite. The move from one job to another always involves a subtle shift in what is being done. And continual subtle shifts in the flow of jobs move the stock of jobs along at a fair old clip.

We already expect some 150% of jobs extant in this current economy to explode, disappear, and be recreated as slightly different ones over the next 15 years. Whether this 50% is included in that figure or on top of it it's not the revolution some are predicting: it's just an addition to hte normal workings of the economy.