Thu. Jul 18th, 2019

Robots are not to blame for low wages | Economy

Robots are not to blame for low wages | Economy



The other day I was in a conference talking about the stagnation of wages and the great increase in inequality. There were very interesting debates. But one thing that surprised me was that many of the participants simply assumed that robots are an important part of the problem, that machines are keeping good jobs, or even jobs in general. Most of the time, this was not presented as a hypothesis, but as something that everyone knows.

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And this assumption has real repercussions in the political debate. For example, much of the turmoil in favor of universal basic income stems from the belief that jobs will become increasingly scarce as the apocalypse of robots takes over economics. So I think it's a good idea to point out that, in this case, what everyone knows is not true. The predictions are difficult, especially those related to the future, and it is possible that the robots come one of these days to take over all our jobs. But automation is not the main part of the story of what has happened to American workers over the past 40 years. It is true that we have a serious problem, but it has very little to do with technology, and much with politics and power. Let's go back a moment and ask ourselves what is, in any case, a robot. It does not have to look like C-3PO, or roll around saying "Exterminate! Exterminate! "From an economic point of view, a robot is anything that uses technology to perform a task previously performed by humans.

And in this sense, robots have been literally transforming our economy for centuries. David Ricardo, one of the founding fathers of the economic sciences, already wrote about the disturbing effects of machinery in 1821. Nowadays, when people talk about the apocalypse of robots, in general they do not think about things like mining in the sky open or in the mining of removal of vertices. But these technologies completely transformed mining: coal production almost doubled between 1950 and 2000, but the number of coal miners fell from 470,000 to less than 80,000.

It is true that we have a serious problem, but little has to do with technology, and much with politics and power

Or think about containerization of charges. Before, longshoremen were an important part of the landscape in the large port cities. But while the great world trade has skyrocketed since the 1970s, the proportion of US workers handling "sea cargo" has been reduced by almost two-thirds.

Therefore, technological disturbances are not a new phenomenon. Still, are they accelerating? No, according to the data. If the robots were really replacing the workers massively, it would be expected that the amount of things produced by each remaining worker - labor productivity - would skyrocket. In fact, productivity grew much more between the mid-1990s and the mid-2000s than since then.

So technological change is an old story. The novelty is that the workers are not sharing the fruits of this technological change. I do not say that facing that change was ever easy. The decline in employment in the coal sector had devastating consequences for many families, and many of the previous coal-mining areas have never recovered. The loss of manual labor in port cities undoubtedly contributed to the crisis of the 1970s and 1980s.

It is a distraction tactic to not face the way in which the system is rigged against workers

But although there have always been victims of technological progress, until the 1970s the increase in productivity translated into an increase in wages for the vast majority of workers. Then the connection broke. And it was not the robots' fault. What was the reason for that break? More and more economists, although not all, agree that one of the key factors in the stagnation of wages has been the decrease in the bargaining power of workers, a decline whose roots are ultimately political.

More obviously, the federal minimum wage, adjusted for inflation, has fallen by a third over the past 50 years, despite the fact that the productivity of workers has increased by 150%. That divergence has been purely and simply political.

The weakening of the unions, which in 1973 protected a quarter of the workers in the private sector but only 6% today, may not have such a clear political origin. Other countries have not experienced the same weakening. Canada is as unionized now as the United States in 1973; In the Nordic countries, trade unions cover two thirds of the active population. What has made the United States so exceptional has been a political environment deeply hostile to labor organization and akin to employers who are enemies of unionization.

And the weakening of the unions has changed things a lot. Think of the trucker job, which used to be good, but for which now one third less than in 1970, with terrible working conditions. Where is the difference? Deindicalization has been an important part of history. And these quantifiable factors are mere indicators of a sustained and generalized bias against workers in our policy.

Which brings me back to the question of why we talk so much about robots. The answer is that it is a distraction tactic, a way of not confronting the way our system is rigged against workers, just as the debate about "lack of qualification" was a way of diverting attention from the bad policies that kept unemployment high. And progressives, above all, should not fall into this simpleton fatalism. American workers can and should have better working conditions. And insofar as they are not getting them, the fault lies not with the robots, but with our political leaders.

Paul Krugman is a Nobel Prize in Economics.

© The New York Times, 2019.

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