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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor---------------------- Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

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THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION (ITIF)

http://www.itif.org/

Are Robots Taking Our Jobs, or Making Them?

BY BEN MILLER AND ROBERT D. ATKINSON |9 SEPTEMBER 2013

http://www2.itif.org/2013-are-robots-taking-jobs.pdf

[full-text, 36 pages]

[excerpt]

This report analyzes the “robots are killing our jobs” arguments, shows how they are constructed on faulty analysis, examines the extensive economic literature on the relationship between employment and productivity, and explains the logic of how higher productivity leads to more jobs. We show that more technology benefits not just the economy overall, but also workers: more and better technology is essential to U.S. competitiveness and higher living standards. The claim that increased productivity eliminates jobs is misguided speculation.

These neo-Luddites make a rough and fallacious correlation between today’s high unemployment and the cool technology they see all around them (e.g., their smart phones, the kiosks at airports, Watson on Jeopardy). Clearly, in their minds, there must be a connection. For them, technology is enabling the same amount of work to be done with fewer people and doesn’t lead to a dynamic where these people become reemployed doing other work. In other words, they believe that the jobs are gone and the workers are added to the unemployment rolls.

This is what economists call the “Lump of Labor” fallacy, the idea that there is a limited amount of labor to be done. The implication is that technology can create unemployment by displacing workers, because the more efficiently we work (using machines or otherwise), the less work there is for workers to do. As we discuss below, this is a false reading of the process of technological change because it doesn’t include critical second order effects whereby the savings from increased productivity are recycled back into the economy to create the demand that in turn creates jobs.

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