Positive And Negative Affects Of Automation On The US Economy
Over the past few decades, US firms are investing more in capital, such as in industrial robots, automation and machinery than in human workers, which is a major factor of economic growth. In fact, many macroeconomic variables come into account when explaining the long run consequences of this change, which includes growth, inflation, unemployment, productivity and standard of living.
To begin, unemployment is a big part of this issue, because “this technological progress is going to leave many people behind, as it races ahead. Its rapid and accelerating digitization is going to lead to economic disruption, due to the fact that as computers get more powerful, firms have less need for some kind of workers. Therefore, it’s the time to be a hard worker with special skills and a good education, because computers, robots and other digital technologies are acquiring these skills and abilities”. All in all, I believe that this will lead to a high level of unemployment for ‘ordinary’ workers, who don’t possess these specific skills. According to a recent report from Morgan Stanley, “the rise of robots provides a sense of urgency in US business investment in new digital technologies. In fact, The US economy has lost about 5 million manufacturing jobs since 2000, which is a decline of nearly 30%, to 12. 3 million jobs. ” However, “the number of jobs lost to more efficient machines is only part of the problem. This bigger issue is whether automation could prevent the economy from creating enough new jobs. ” In fact, “concerns over automation and joblessness during the 1950s and early 1960s were very strong, because productivity was rising so fast that it could have surpassed demand for labour. ”
However, Autor explains that “automation was typically intended to be a substitute for labour, which it is. But, it is also a complement to labour, as it raises output in ways that lead to higher demand for labour and interacts with adjustments in labour supply. From this, we can understand that since robots are a substitute, as well as a complement for human labour, this relationship between automation and labour will result in “an increase in productivity, a raise in earnings and a high demand for labour, which is a good thing. ” On the other hand, “a study from Ball State University finds that in recent years, almost 88% of job losses in manufacturing can be owned to this productivity growth, and the long-term changes to manufacturing employment are mostly linked to the productivity of American factories. In other words, robots are the ones responsible for this high level of job loss in manufacturing and not outsourcing or trade competition, since they’re the cause of the fast increase in productivity. ”
Over the long run, “gains in productivity have not lead to a shortage of demand for goods and services; but instead, household consumption has mainly stayed consistent with household incomes. That is, because the share of population engaged in paid employment has generally risen over the past century despite huge improvements in standard of living. In fact, people in high-income countries work fewer annual hours, take more vacation, and retire earlier. This implies that they choose to spend part of their rising incomes on increased leisure. All in all, this is clearly good news. ”
To conclude, we can see that automation has its positive and negative affects on the US economy. However, I strongly believe that industrial robots, automation or machinery cannot completely take over human labour, because they are just programmed to do what they are told. But, they don’t have their own judgments, values or feeling like humans do.
