Do Robots Boost Productivity?

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Photo image: Huffington Post

One of the paradoxes of the extensive growth in job automation is that individual companies have seen increased productivity while the broader economy has not. The main reason for this seems to be the nature of the jobs that workers displaced by automation find as replacements. These new jobs tend to be low productivity ones that counteract the productivity boost of robots, thus leading to a stagnant productivity.

There is ongoing debate about the impact of automation on jobs. There are now 1.75 robots per every 1,000 workers, which is a fivefold increase from the early 1990s. In some cases robots are being developed to fill gaps where not enough workers exist (for example, the trucking industry) or to replace humans in dangerous jobs. A growing body of research suggests that robots do reduce the number of jobs and lower wages. On the other side of the argument, there is no doubt that a failure to automate could lead to decreased competitiveness and business closings, which would lead to even more lost jobs.

In terms of productivity, the U.S. is experiencing one of its lowest growth rates in modern history. It may be that automation is actually driving slow productivity growth because displaced workers are moving to low-wage and low-productivity job sectors, thus canceling out any productivity gains that automated sectors are experiencing. If this is what is happening and what will continue to happen, public policy and industry leaders need to address the two-fold problems of displaced workers and decreasing economic productivity.

For a more detailed look at this issue, see The Boston Globe article by Even Horowitz