AI (Robots) will Erode Employment

Source: NY Times, Mar 2017

The industry most affected by automation is manufacturing. For every robot per thousand workers, up to six workers lost their jobs and wages fell by as much as three-fourths of a percent, according to a new paper by the economists, Daron Acemoglu of M.I.T. and Pascual Restrepo of Boston University. It appears to be the first study to quantify large, direct, negative effects of robots.

“The conclusion is that even if overall employment and wages recover, there will be losers in the process, and it’s going to take a very long time for these communities to recover,” Mr. Acemoglu said.

The paper adds to the evidence that automation, more than other factors like trade and offshoring that President Trump campaigned on, has been the bigger long-term threat to blue-collar jobs. The researchers said the findings — “large and robust negative effects of robots on employment and wages” — remained strong even after controlling for imports, offshoring, software that displaces jobs, worker demographics and the type of industry.

Robots affected both men’s and women’s jobs, the researchers found, but the effect on male employment was up to twice as big. The data doesn’t explain why, but Mr. Acemoglu had a guess: Women are more willing than men to take a pay cut to work in a lower-status field.

In an isolated area, each robot per thousand workers decreased employment by 6.2 workers and wages by 0.7 percent. But nationally, the effects were smaller, because jobs were created in other places.

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