It seems that after a factory sheds workers, that economic pain reverberates, triggering further unemployment at, say, the grocery store or the neighborhood car dealership.
In a way, this is surprising. Economists understand that automation has costs, but they have largely emphasized the benefits: Machines makes things cheaper, and they free up workers to do other jobs.
The latest study reveals that for manufacturing workers, the process of adjusting to technological change has been much slower and more painful than most experts thought.
every industrial robot eliminated about three manufacturing positions, plus three more jobs from around town
“We were looking at a span of 20 years, so in that timeframe, you would expect that manufacturing workers would be able to find other employment,” Restrepo said. Instead, not only did the factory jobs vanish, but other local jobs disappeared too.
This evidence draws attention to the losers — the dislocated factory workers who just can’t bounce back
one robot in the workforce led to the loss of 6.2 jobs within a commuting zone where local people travel to work.
The robots also reduce wages, with one robot per thousand workers leading to a wage decline of between 0.25 % and 0.5 % Fortune
Perhaps that much was obvious. After all, anecdotes about the Rust Belt abound. But the new findings bolster the conclusion that these economic dislocations are not brief setbacks, but can hurt areas for an entire generation.
How do we even know that automation is a big part of the story at all? A key bit of evidence is that, despite the massive layoffs, American manufacturers are making more stuff than ever. Factories have become vastly more productive.
some consultants believe that the number of industrial robots will quadruple in the next decade, which could mean millions more displaced manufacturing workers
The question, now, is what to do if the period of “maladjustment” that lasts decades, or possibly a lifetime, as the latest evidence suggests.
automation amplified opportunities for people with advanced skills and talents
Source: The Washington Post