How Robots Are Beginning to Affect Workers and Their Wages

Source: William M. Rodgers III and Richard Freeman, The Century Foundation, October 17, 2019

From the summary:

Much has been written about the rise of robots and the potential impacts of automation on the economy. Yet most analysis tends to be prospective in nature, and estimates of future impacts on employment vary widely, with some studies predicting that as many as 50 percent of all workers are at risk of losing their jobs to automation. Even less is understood about the actual impacts of robots on jobs, wages, and workers today. While more recent studies have begun to measure these effects, the results here, too, are mixed.

This report analyzes the impact of robots in the years following the Great Recession, from 2009 to 2017—a period of significant, steady job growth and economic recovery, as well as one in which the use of robots in the U.S. workplace more than doubled. The report’s findings, summarized below, offer new insights that can help inform ongoing debates about the future of work and the impact of automation.

The first takeaway is that robots are, indeed, coming—but there is little evidence (yet) that robotic growth is leading to widespread job displacement, as some have predicted. That said, there are winners and losers with automation. While robots may have negligible effects on national employment as a whole, certain industries and regions are more impacted by robotic growth, and particular groups of workers disproportionately suffer the negative effects of this growth. It is also the case that job losses from robotization may have little impact on total employment, as displaced workers find other jobs (especially in a strong economy with low unemployment), even if at lower pay. Lastly, we find that the economic boom of the past decade has effectively “masked” some of the impacts that robots have had on workers. It’s not that robots weren’t displacing jobs—it’s that the overall economic expansion was large enough to offset some of these job losses. ….

What You Should Know
• Estimates of the potential impacts of robots on the American economy vary widely, with some studies predicting that as many as 50 percent of all workers are at risk of losing their jobs to automation in the coming decades.
• This report looks at what is happening in practice, estimating the impact of rising automation in the wake of the Great Recession, from 2009 to 2017, a period in which the use of industrial robots in the United States has more than doubled.
• The report shows that, on the national level overall, robots have not (yet) brought the dire effects that many have warned. However, the impact of robots varies across groups of workers, regions, and industries.
• There have been clear losers with increased automation: namely, younger, less-educated manufacturing workers in the Midwest (and younger, minority workers in these industries in particular). These industries not only have the highest number of robots in use, but are also experiencing the fastest growth in robot adoption.
• Importantly, some of the adverse impacts on the wages and jobs of Midwest manufacturing workers have been “masked” by the economic recovery of the past decade. That is, had the recovery not occurred, we’d be witnessing even more young workers being displaced from their jobs.