WSJ Columnist: Robots Aren't Destroying Enough Jobs (foxbusiness.com)

An anonymous reader writes: Will millions be unemployed after a job-destroying robot apocalypse? That's "starkly at odds with the evidence," argues a Wall Street Journal columnist, who says the real problem is robots aren't destroying enough jobs. "Too many sectors, such as health care or personal services, are so resistant to automation that they are holding back the entire country's standard of living." Noting that "churn relative to total employment" is the lowest it's ever been, he writes that "The pessimism would be more plausible if the evidence weren't moving in exactly the opposite direction...

"In April, nonfarm private employment rose for the 86th straight month, the longest such streak on record. Monthly job creation has averaged 185,000 this year, more than double what the U.S. can sustain given its demographics. This has driven unemployment down to 4.4%, a 10-year low and below most estimates of 'full employment.' Growing labor shortages have boosted the typical worker's annual wage gain to more than 3% now from 2% in 2012, according to the Federal Reserve Bank of Atlanta. Instead of worrying about robots destroying jobs, business leaders need to figure out how to use them more, especially in low-productivity sectors... The alternative is a tightening labor market that forces companies to pay ever higher wages that must be passed on as inflation, which usually ends with recession.

"That is a more imminent threat than an army of androids."

Comments

Because unemployment is the road to riches

[Archtech]

"Too many sectors, such as health care or personal services, are so resistant to automation that they are holding back the entire country's standard of living."

To which I reply with this:

“When the Englishman speaks of national wealth he means the number of millionaires in the country". - Oswald Spengler

As Spengler was writing nearly 100 years ago, for "Englishman" we may conveniently substitute "American"; and for "millionaires", "billionaires".

Re:Because unemployment is the road to riches

[Anonymous Coward]

Which explains why the lowest earning 50% of the citizens make so little money that they don't owe any federal income tax each year? Jobs are lost and some of them get replaced by service sector jobs that pay less and have far less stability than the previous jobs did. Right now, there's more products being manufactured in the US than ever before, but the number of workers that it takes is significantly less than it's been in a long time due to automation and robotics.

There's plenty of wealth, but the wealthy that bribe the politicians to set policies are too selfish to share it. What we need more than anything else is a guaranteed minimum salary that covers the bare necessities. We've got the money necessary to ensure that everybody who works or can't work due to disability, can afford things like food, clothes and shelter without having to completely obliterate the rich to do it.

We just lack the will because corporate media keeps gaslighting us about the reality. At some point something is going to give. Either our economy will collapse the way that the economy of the USSR did or there'll be some sort of revolution as it's pretty clear that the greedy aren't going to exercise any sense when they can just build bunkers and ever taller walls around their property.

Re:Because unemployment is the road to riches

[djinn6]

Pretty much the most fundamental rule of economics and life is that if you want success in the long term, you need to endure hardships in the short term.

Since when is this a rule? What the heck is "hardships" anyways?

If a farmer has the option of sowing or eating his wheat, and he chooses to sow everything, then he will be dead long before he gets to be "successful". If the farmer sows some, but still too much wheat for him to take care of properly, then he'd have wasted them, and his half-assed attempt to farm everything might have actually hurt his total output.

Often it's a bad idea to trade consumption for investment. There are times when there is too much investment and you end up with waste. Maybe if you waited instead for a more opportune moment to use those natural resources, you could've put them to better use.

Sometimes what seems to be consumption could turn out to be investment, such as nutritious meals for kids, which promotes learning and lowers healthcare costs later.

And sometimes the consumption is not optional, such as when you tell unemployable people to go die in a ditch, and they send you and the rest of your government to the guillotines.

There's a surprise...

[fuzzyfuzzyfungus]

As always, unlimited amount of magic financial instrument money are just 'productivity'; but any rise in real wages means that we are just days away from Wiemar hyperinflation. I'm totally shocked that the Wall Street Journal might hold this opinion.

Actual wage levels are irrelevant

[Solandri]

For there to be a sale, there has to be a buyer. As Henry Ford inadvertently found when he paid his workers what was then considered an outlandishly high wage, if workers are being underpaid, then increasing their wages actually increases economic activity. His workers were paid enough to afford to buy the cars they were building. And the increased sales of his cars helped catapult Ford into one of the wealthiest men in the world.

Countries where the rich keep the masses in check (South/Central America, Middle East) have stagnated at a productivity level of around $10k-$20k per capita per year. To reach Western levels of productivity ($30k-$60k per capita per year), you have to pay workers much closer to the actual value of their productivity. If you don't pay the masses enough, they can't afford to buy stuff, economic activity suffers, and your per capita productivity drops.

So the doomsday scenario of automation taking away everyone's jobs is highly unlikely to happen in developed nations. If it did, the wealthy would actually start to lose wealth because the masses would be underemployed and no longer able to buy the products being produced in automated factories. Every sale needs a buyer. It would then become in the wealthy class' best interest to find ways to put the unemployed back to work - so they can earn money and once again start buying stuff the wealthy are producing in their automated factories. Everyone (wealthy, middle class, poor) will be on the same page, and government action to rectify the situation will pass effortlessly.

Re:Actual wage levels are irrelevant

[demonlapin]

His workers were paid enough to afford to buy the cars they were building.

But that's not why he got rich. He paid what he did in order to get the best workers. So, yeah, if you can identify the most productive workers in society, and use higher wages to get them all working for you, you will absolutely be well-positioned to beat your competitors. That's not the same as saying that raising the general level of wages will somehow automatically increase productivity. The best workers aren't going to stick around and deal with your demanding schedule if they can get the same amount of money for less work at another business down the street.