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Is Automation Warping the Labor Market as Dramatically as We Think?

A new study provides a counter to the conventional wisdom that robots are stealing our jobs.

The received wisdom is that automation is stealing away jobs from humans—maybe quickly, maybe slowly, but stealing nonetheless. A new report attempts to provide a counter to that school of thought.

An analysis of 165 years of U.S. labor history by the Information Technology and Innovation Foundation—a think-tank supported by the tech industry—reveals that America isn’t currently experiencing high levels of job churn (that is, the creation of new occupations and destruction of old ones). In fact, the results show the rate of churn is at a record low. ITIF argues that because labor disruption measured by that metric is small, technology isn’t having as profound an effect on jobs as many people seem to think—and it won't in the future, either

We do know that the arrival of robots in the workplace increases unemployment and decreases wages—but admittedly the claim that automation is causing that to be the case across the U.S. assumes that robots are actually being purchased, installed, and used. The truth is that many roles are so far more resistant to automation than some people would like to admit, and that the arrival of robots in the workplace may be slower than many people think.

In the Wall Street Journal, Greg Ip goes a step further than that, using the new report as an opportunity to call out concerns about the erosion of jobs by automation as “baffling and misguided.” There’s an historical argument that can be asserted here, after all: that the labor market has seen far larger shocks as a result of mechanization in the past, and yet it’s always recovered. This time shouldn’t be any different.

But history may not repeat itself. Our editor, David Rotman, did an excellent job of pointing out both sides of this argument a few years ago. One of the more compelling arguments against Ip and the ITIF's report is that, this time round, technologies are developing skills that are far more human-like than those that have gone before them—so they could wipe out many more of the skilled jobs that have so far resisted automation.

There is clearly uncertainty, which means that it’s questionable to argue that the problem of automation stealing away jobs is a problem that can be roundly ignored—as the ITIF does when it reassures policymakers that they can "take a deep breath, and calm down" over the issue. History can indeed inform how we approach the future, but it’s perhaps unfair to compare the arrival of tractors on farms in the 1920s with machine learning software that can take the jobs of a junior lawyer.

Still, the ITIF does draw one conclusion that it’s hard to argue with. It suggests that the lack of labor market churn is one of the factors that’s given rise to sluggish growth in productivity—the value of output for an hour of labor—over the past decade. Whoever’s right about the effects of robots on labor, we certainly agree that productivity needs a boost.

(Read more: ITIF, Wall Street Journal, “Dear Silicon Valley: Forget Flying Cars, Give Us Economic Growth,” “How Technology Is Destroying Jobs,” “Robots Will Devour Jobs More Slowly Than You Think," "Stop Saying Robots Are Destroying Jobs—They Aren't")

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