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The high rate of unemployment in the United States has presented a challenge to both economists and social scholars. One of the prevailing arguments in regards to this problem is that the advent of the robot technology is contributing towards a high rate of unemployment. Nevertheless, these fears are not limited to this period in history, as they have been recorded in the past. For example, in the 1980s most observers had gloom predictions about the use of automated and computerized processes in industrial assembly lines.
The process by which powerful computerized robots are being utilized to perform highly sophisticated tasks has seen machines replace human inputs in a variety of labor fields. The prevailing concern is that the machines will eventually replace human beings as the main source of labor. Furthermore, huge leaps in technology have also meant that modern robots are more efficient than human labor. In the current context, some economists have argued that there is a need to infuse social safety nets within the ongoing efforts to perpetuate ‘capital hypermobility’.
Another group of social economists is of the opinion that most governments should admit that their industrial and economic policies are in stark contrast with their social security needs. It is important to note that the industrial revolution had brought about similar fears to the cottage industry setups of the nineteenth century. One of the most solid arguments in the debate on robots’ effect on unemployment is that they have an unequal impact on various social groups. This paper presents an argument that robots do not have a significantly profound effect on unemployment patterns and their rise is a normal phenomenon of human progression.
One common misconception about the rise of robot technology is that it renders people unemployed. However, it is not theoretically possible to replace a worker who is economically productive. Some of the individuals who run the risk of being replaced by robot technology are what some economists refer to as “economic rent seekers” (Ford, 2015). It is normal for advances in technology to allow for production of more goods and services.
However, all advances in technology are a result of better knowledge levels. Therefore, robots come after the knowledge on machine technology and a general depreciation of human input over time. In essence, human learning is in itself an aspect of technological advancement. The rise of robot technology “implies an increase in standards of living, which may result from either greater output or more leisure while maintaining the same level of input” (Thompson, 2015, p. 52).
The goal is to use fewer resources and increase output levels at the same time. In the economic context, an unemployed individual is one who is willing to render labor services at the prevailing market rates but for one reason or another, he/she is denied such an opportunity. The norm is that all individuals tend to offer their labor services when they continue to look for better-paying opportunities. Therefore, these individuals would be technically be unemployed if they chose not to continue working as they scout for better opportunities.
The term economic rent seekers can be used to refer to individuals who refuse to work for wages that reflect the prevailing market rates even if they are lower. Consequently, robots can only replace rent seekers and not actual workers. Workers can always find a market for their services when other factors of production remain constant. Furthermore, use of robots to eliminate economic rent is a good method of achieving economic efficiency.
It is important to examine how robot technology is set to affect the rates of unemployment both in the short and long term. Overall, robots are set to change the scope of the labor market. The opponents of robot technology are of the view that robots are contributing to high unemployment rates in the short-term and possibly higher rates in the long-term. In the long run, robots are set to be the vehicles for delivering high standards of life.
The effect of robots on unemployment depends on how individuals react to changes in labor markets. The possibility of robots leading to higher unemployment rates in the short term depends on other imperfections in labor and production dynamics. If an economy reacts to these factors in a timely manner, there would be no short-term unemployment rates as a result of robot technology as claimed by its opponents. Furthermore, the argument that big industries will simply absorb labor resources while leaving thousands of individuals unemployed is flawed. In competitive markets, resources are not absorbed but they are transferred to other avenues.
For example, the prices of commodities are set to come down leading to increased sales and subsequent demand for more human labor. It is also important to note that some of the past concerns about the long term effect of robots on unemployment have not materialized. Most of these predictions date back to the 1960s but none of them have been realized. Furthermore, in the long run economists have come to the conclusion that human needs are unlimited and robot technology cannot change this fact (Brynjolfsson & McAfee, 2014).
There is a prevailing argument that robots lead to the depreciation of human capital thereby contributing to higher levels of unemployment. However, this argument ignores the fact that innovation often leads to creative destruction. The proponents of this argument often cite the recent job cuts in some of the most significant industries including the automobile and construction sectors.
However, these arguments fail to acknowledge that the past valuations on human capital were flawed. For instance, “automobile makers met their comeuppance in 1981 and 1982, when circumstances required them to take giant steps towards optimality” (Frey & Osborne, 2016, p. 255). The only way for the automobile industry to survive was to do away with most of its inefficiencies at the time. A similar case of wrong valuation of human capital has also occurred in the steel industry. Labor is just one factor of production and it is set to compete with capital as the dominant factor.
Therefore, at the moment the high levels of unemployment can be interpreted as a general shift towards capital as the dominant factor of production. Several governments have sought to influence the value of human labor in an en effort to provide social security. However, most of these efforts have only led to more problems. Human capital is a mere factor of production just like capital, and the rise of robots is a manifestation of an efficient production process. Furthermore, most economists have argued that wages can only be maintained at levels where they do not factor in economic rents.
Overall, the use of robots in industrial and other forms of production has increased significantly over the last few decades. The evolution of robots is also set to gain momentum as computing technology continues to evolve. However, the common rhetoric that robots will replace the human worker is a shallow form of sensationalism that does not take into consideration the deeper arguments. Robots can only render economic rent seekers unemployed as the legitimate workers can always be absorbed by the markets. Both long and short term effects of robot technology are subject to other preexisting economic factors.
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Brynjolfsson, E., & McAfee, A. (2014). The second machine age: Work, progress, and prosperity in a time of brilliant technologies. London, UK: WW Norton & Company.
Ford, M. (2015). Rise of the robots: Technology and the threat of a jobless future. New York, NY: Basic Books.
Frey, C. B., & Osborne, M. A. (2016). The future of employment: How susceptible are jobs to computerisation? Technological Forecasting and Social Change, 114, 254-280.
Thompson, D. (2015). A world without work. The Atlantic, 316(1), 50-61.