Robots have replaced workers in many areas of the United States over the past few decades. But how much? While some technologists predict that automation will bring about a future without jobs, others are more skeptical.
A study by an MIT professor has now put numbers on this trend. It finds a real effect, although it is not as significant as a robot takeover. The study also found that the U.S.'s impact on robots is highly dependent on the industry and the region. This could play an essential role in increasing income inequality.
Daron Acemoglu, the MIT economist, says that "we find quite major negative employment effects," although he acknowledges that the impact of this trend can be overstated.
From 1990 to 2007, the study shows adding one additional robot per 1,000 workers reduced the national employment-to-population ratio by about 0.2 percent, with some areas of the U.S. affected far more than others.
This means that each additional robot in manufacturing replaces approximately 3.3 workers on average.
The increased number of robots used at work also led to a drop in wages of around 0.4 percent over the same period.
Acemoglu states that there are adverse wage effects. Workers are losing real wages in areas more affected by robots.
The paper "Robots and Jobs" appears online in advance in the Journal of Political Economy. The authors are Acemoglu and Pascual Restrepo PhD'16, an assistant professor in economics at Boston University.
Displaced in Detroit
Acemoglu and Restrepo used data from 19 industries. This data was compiled by the International Federation of Robotics, an industry group based in Frankfurt that maintains detailed statistics about robot deployments worldwide. This data was combined with U.S.-based data from the Bureau of Economic Analysis, the U.S. Census Bureau, and the Bureau of Labor Statistics.
Researchers also compared the U.S. robot deployment to other countries and found it behind Europe. In contrast, U.S. companies introduced almost one new robot for every 1,000 workers from 1993 to 2007. European firms had 1.6 new robots for every 1,000 workers.
Acemoglu states that the U.S. is technologically advanced, but it is behind other advanced economies in terms of innovation and production of industrial robots.
The U.S. has four major manufacturing industries that account for 70% of robotics: electronics (15 percent), automakers (38% of robots in use), plastics and chemical (10%), and metals manufacturers (7%)
The study examined the impact of robots on 722 commute zones across the U.S. -- essentially, metropolitan areas -- and found significant geographic variation in how often robots were used.
According to industry trends, the area most affected by robot deployment in the automotive industry. Michigan has the highest concentrations of robots at work, with more jobs in Detroit, Lansing, and Saginaw than any other state.
The researchers discovered that each robot could replace approximately 6.6 jobs in commuting areas where robots have been added to the workforce. In a subtle twist, however, robots in manufacturing can also benefit people in other industries or other parts of the country by lowering the price of goods. For example, the researchers found that one robot can replace 3.3 jobs in the country.
The inequality problem
Acemoglu & Restrepo tried to determine if robot-heavy regions' employment trends might be due to other factors such as trade policies but found no evidence of any.
However, the study suggests that robots can impact income inequality. This is because robots replace manufacturing jobs in areas with few other options. This means there is a direct link between robot-using industries and the sagging incomes of blue-collar workers.
Acemoglu states that there are significant distributional implications. "The burden falls upon the low-skilled and especially middle-skill workers when robots are integrated into manufacturing plants." This is an important part [of our research] on robots. Automation makes up a more significant part of technological factors that have significantly contributed to the rise in inequality over the past 30 years.
While claims that machines will eliminate all human work may seem exaggerated, Acemoglu's research shows that the robot effect in manufacturing is very real, with critical social implications.
Acemoglu states that it won't support those who believe robots will take over our jobs. However, it does indicate that automation is something to be fought with.