Robots Are Already Replacing Human Workers At An Alarming Rate

We all know, or at least suspect, that robots are taking people's jobs, but new research shows the dramatic degree to which industrial robots are replacing human workers and forcing down wages.

Kuka robots work on Tesla Model S cars in the Tesla factory in Fremont, California. (Image: AP)

Each additional robot in the US economy reduces employment by 5.6 workers, and every robot that is added to the workforce per 1000 human workers causes wages to drop by as much as 0.25 to 0.5 per cent. Such are the conclusions reached by MIT's Daron Acemoglu and Boston University's Pascual Restrepo, who published their findings at the National Bureau of Economic Research.

No doubt, robots are having a transformative effect on the labour market in the US and elsewhere, and it's a trend that's likely to continue. This form of automation could soon be joined by another driver of technological unemployment: Artificial intelligence. According to an analysis by the International Data Corporation, virtually no job is safe.

For the new study, Acemoglu and Restrepo looked at the effect of industrial robots on local labour markets from 1993 to 2007, defining an industrial robot as "an automatically controlled, reprogrammable, and multipurpose [machine]". They specifically looked at fully autonomous machines that don't require a human operator, and can be programmed to perform multiple manual tasks such as welding, painting, assembling, handling materials and packaging.

The impacts of these robots on the US job market was offset against other factors, such as imports from China and Mexico, the decline of routine jobs, offshoring of other types of work, and so on.

Acemoglu and Restrepo estimate that overall, for every 1000 workers, an additional robot reduces the employment-to-population ratio by 0.18 to 0.34 percentage points, while also reducing wages by 0.25 to 0.5 per cent. For context, the stock of industrial robots in the US increased fourfold during the period studied.

"Because there are relatively few robots in the US economy, the number of jobs lost due to robots has been limited so far (ranging between 360,000 and 670,000 jobs)," the authors write. "However, if the spread of robots proceeds as expected by experts over the next two decades, the future aggregate implications of the spread of robots could be much more sizeable." The researchers saw negative effects on virtually every occupation, with managers being the exception. "Predictably, the major categories experiencing substantial declines are routine manual occupations, blue-collar workers, operators and assembly workers, and machinists and transport workers," write the authors.

Experts predict that the stock of robots in the US will quadruple by 2025, jumping to 5.25 more robots per thousand workers (there are currently about 1.75 industrial robots in the US per 1000 workers). This will serve to reduce the employment-to-population ratio by 0.94 to 1.76 percentage points, while resulting in 1.3 to 2.6 per cent lower wage growth between 2015 and 2025. The addition of 5.25 more robots per thousand workers could also amount to a staggering 1.9 to 3.4 million additional job losses in just a decade. All of this, of course, is assuming the economies of the future behave the same way as our economy does today in response to additional automatons in the workforce.

Automation can’t be stopped, but there are ways to mitigate its effects. Bill Gates has proposed that robots be taxed; the funds could be used to retrain and financially support displaced workers, who could transition to jobs in health care, education or other areas. A similar idea is to have robotics companies help the workers they displace.

But there’s also the long game to consider, and the rise of technological unemployment caused by advances in artificial intelligence. If things get bad enough, governments may have to re-jig the economy on a scale similar to the changes made both during the Great Depression (that is, the rise of the so-called welfare state). Eventually, governments could step in and implement a guaranteed basic income.

And just maybe, this science-fictional future welfare state won’t be so terrible, particularly if our machines replace dangerous, menial and degrading work. We humans are an adaptable bunch, and we’ll surely find ways to occupy ourselves while the robots are off doing the heavy lifting.

[National Bureau of Economic Research]

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Comments

    If robots are doing the manufacturing whose earning money to buy the things the robots are making?

      The people who aren't being replaced by robots.

      It's when robots do everything that we're obsolete.

      Here's the scary thought... you get laid off, you eat into your existing resources (i.e. sell your assets) until either A: get another job, B: you go onto welfare or C: die.

      Repeat that a few million times (aka a few million people get replaced by robots), and something happens… the rich get richer (due to the transfer of assets). Now repeat a few million more times…

      Long term is where it gets really interesting, at some point the whole economic system breaks down (either trickledown economics simply doesn’t trickle down enough to keep the system turning over OR the educated masses revolt).

      The rich (like Gates, Elon, etc.) know this… if you raise the issue A: You look better PR wise, B: You protect your long term interest (if the system fails they lose out too)

        '..at some point the whole economic system breaks down'
        The system will change before it breaks. The futurists are already onto it.

    There will always be some people who can't be trained. Will they do the jobs robots don't want?

    Robots have been replacing people for decades! It's nuts now it's such big news all of the sudden. If it's not robots, it has been production lines, think even basic conveyors and sorting systems... is it only such big news since Bill Gates / Donald Trump tweeted about it?

    ...who could transition to jobs in health care, education or other areas... until robots take over those jobs in health care, education or other areas... Honestly I think jobs in Education are largely redundant these days and I suspect robots will inevitably do a much better job of healthcare than humans. I think the biggest growing field for humans will be in entertainment. Becoming a YouTuber will be a form of income for an increasingly larger percentage of the human race.

      Wow so the human race distilled down to entertain one-another.
      I am so sad with that thought.
      I hope people get out of the cities and stop looking at their phones and instead look into peoples eyes and say hi

    I for one welcome the day when all of the menial work is done by robots, we can all work a 2 day week (tue and thur)

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