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Fear of the Robot Lives On But Evidence is Lacking

The Economist June 19th 2021 pp72 |Finance & Economics| Free Exchange| “Stay of Execution” “Many people are convinced that the pandemic is accelerating automation.

Don’t be so sure”

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Routine jobs, those that are easily automated include work like data entry and grocery clerking. What does the data show regarding current job numbers? Looking at America the number of routine jobs as a % of total employment has declined from January 2015 at about 43% to 41% as of May 2021. Important to note that unemployment around the wealthy world is at record levels with 9.3 million open roles in America. Canada and Europe echo these reports with Canada being 20% above pre-pandemic unemployment levels. Causes are unclear but discussions now center around “welfare policy, and economic disruption.”

Without much data, economists “have confidently asserted that a wave of job-killing robots was sweeping the labour market.” It is true that economic recessions “often lead firms to adopt more robots” and it’s logical that a contagion like COVID could lead to more robots as robots don’t need social distancing and don’t call out sick. It is also argued that government relief to companies due to the pandemic has filled business coffers with money that could be directed to buy more automation. Furthermore, there are anecdotal examples of companies installing voice activated menus for fast food ordering, UV robots for deep cleaning and machines to kill weeds and pick strawberries but is there real data supporting increasing adoption of robots etc.? As it turns out, with the pandemic disruption “it is hard to disentangle the effect of technological change from lockdowns.”

True American GDP is close to pre-pandemic levels but is this the effect of more automation or higher productivity by the remaining workforce? It’s true as well that wages for routine jobs are increasing making automation more attractive as well. But truth be told, routine jobs have risen beyond what was estimated at 40.9% to 41.4% which equates to 1 million extra routine jobs.

Could it be that the pandemic has simply slowed the adoption of robots? No doubt suppliers are impacted and installers were and are less able to move around during the pandemic. Supporting such a thought, imports of robots to America “fell by 3% in 2020.”

Looking at Australia, a country that managed COVID well and had good freedom of movement for nearly a year, routine jobs have fallen from 57% (2019) to 55% now but their unemployment rate is unchanged. So one could surmise that “Automation is not, it seems, putting people on the economic scrapheap.” While fear of automation has been a rallying call throughout the years “centuries of technological improvement have never led to widespread structural unemployment. Countries with more robots tend to have less joblessness, not more.”

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