Hello,

We noticed you're browsing in private or incognito mode.

To continue reading this article, please exit incognito mode or log in.

Not an Insider? Subscribe now for unlimited access to online articles.

Business Impact

Actually, Steve Mnuchin, Robots Have Already Affected the U.S. Labor Market

The suggestion that job loss due to automation is 50 years off is laughable—and there’s finally some data to prove it.

The idea that automation isn’t harming American jobs is plainly false, according to a newly published analysis of the impact of robots on the labor force.

According to Treasury Secretary Steve Mnuchin, automation isn’t about to displace American workers. Speaking to Axios last week, he said that the phenomenon is “not even on our radar screen,” adding that such effects are “50 to 100 more years" away.

Sadly for Mnuchin, that is simply not true: the effect has already been playing out for a number of years. But until now, there has been little evidence to quantify exactly how many jobs have been affected by the arrival of robots in factories and warehouses around the country.

Now, as if on cue, a new working paper published by the National Bureau of Economic Research traces the effects of workplace robots on the labor market. It provides us with some hard numbers to show how automation is affecting unemployment and wages.

The research, carried out by Daron Acemoglu of MIT and Pascual Restrepo of Boston University, studied the effects of increased use of industrial robots between 1990 and 2007. Over that period, Acemoglu and Restrepo found that as many as 670,000 jobs were lost in local U.S. labor markets due to the arrival of robots, with manufacturing hit the hardest.

Adjusting for effects like globalization and demography, the analysis also shows that, on aggregate, an extra robot per thousand workers decreased employment by 5.6 workers and cut wages by around 0.5 percent. Those figures were worse for some specific areas outside of big cities.

Perhaps most important, though, is what this all means for the future. As Acemoglu and Restrepo note in their paper, there are still relatively few robots in the U.S. economy. While it’s difficult to accurately extrapolate their findings, the effects on employment and wages will be felt more acutely as robots continue to proliferate.

As Acemoglu told MIT Technology Review earlier this year, political leaders are “totally unprepared” to deal with this problem—something that Mnuchin’s comments demonstrate all too clearly.

(Read more: National Bureau of Economic Research, Axios, “How Technology Is Destroying Jobs,” “The Relentless Pace of Automation,” “Learning to Prosper in a Factory Town”)

Cut off? Read unlimited articles today.

Become an Insider
Already an Insider? Log in.
Next in Top Stories

Your guide to what matters today

Want more award-winning journalism? Subscribe and become an Insider.
  • Insider Plus {! insider.prices.plus !}* Best Value

    {! insider.display.menuOptionsLabel !}

    Everything included in Insider Basic, plus the digital magazine, extensive archive, ad-free web experience, and discounts to partner offerings and MIT Technology Review events.

    See details+

    Print + Digital Magazine (6 bi-monthly issues)

    Unlimited online access including all articles, multimedia, and more

    The Download newsletter with top tech stories delivered daily to your inbox

    Technology Review PDF magazine archive, including articles, images, and covers dating back to 1899

    10% Discount to MIT Technology Review events and MIT Press

    Ad-free website experience

  • Insider Basic {! insider.prices.basic !}*

    {! insider.display.menuOptionsLabel !}

    Six issues of our award winning print magazine, unlimited online access plus The Download with the top tech stories delivered daily to your inbox.

    See details+

    Print Magazine (6 bi-monthly issues)

    Unlimited online access including all articles, multimedia, and more

    The Download newsletter with top tech stories delivered daily to your inbox

  • Insider Online Only {! insider.prices.online !}*

    {! insider.display.menuOptionsLabel !}

    Unlimited online access including articles and video, plus The Download with the top tech stories delivered daily to your inbox.

    See details+

    Unlimited online access including all articles, multimedia, and more

    The Download newsletter with top tech stories delivered daily to your inbox

/3
You've read of three free articles this month. for unlimited online access. You've read of three free articles this month. for unlimited online access. This is your last free article this month. for unlimited online access. You've read all your free articles this month. for unlimited online access. You've read of three free articles this month. for more, or for unlimited online access. for two more free articles, or for unlimited online access.