Following-up on an earlier Newsletter arguing that a dramatically higher minimum wage should be re-labeled "the Robot Employment Act" (Strategic CSR – Minimum wage), the article in the url below suggests that, rather than killing jobs, "robots aren't killing our jobs fast enough":
"From Silicon Valley to Davos, pundits have been warning that millions of individuals will be thrown out of work by the rapid advance of automation and artificial intelligence. As economic forecasts go, this idea of a robot apocalypse is certainly chilling. It's also baffling and misguided."
The problem, the author argues, is that too many industries are resisting the advance of atomization, which ultimately reduces overall value creation:
"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."
The author also argues that, if robots were increasingly replacing employees, we would expect job creation to be declining (it is increasing) and productivity to be increasing (it is decreasing):
"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 Back of Atlanta."
In short, the author explains these trends arise due to the shift in overall economic activity from manufacturing jobs (which are more easily automated) to services (less easily automated). In addition, whether overall productivity rises depends as much on which jobs in which sectors are being created/destroyed:
"Since 2007, low productivity sectors such as education, health care, social assistance, leisure and hospitality have added nearly seven million jobs. Meantime, information and finance, where value added per worker is five to 10 times higher, have cut or barely added jobs."
The author concludes that the solution is to push robots into more and more industries, if for no other reason than containing overall inflation levels.
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Robots Aren't Killing Our Jobs Fast Enough
By Greg Ip
May 11, 2017
The Wall Street Journal
Late Edition – Final