At EconLog Scott Sumner posts what strikes me as a reasonable framework for considering technological unemployment, i.e. whether “robots are taking our jobs”. Here’s a snippet:
I think it’s possible that automation plays at least a small role in the 2.5% drop—perhaps by depressing the wages of unskilled workers, and making the unskilled work still available less attractive than other options.
In this area, it’s always best to try to approach the issue as unemotionally as possible. It doesn’t help to draw sweeping conclusions, such as “it’s all about laziness, after all the Mexican immigrants can find jobs” or “it’s all about a lack of aggregate demand, after all the big drop occurred during the recession.” People are complicated and dozens of factors can interact to produce a given outcome. Look at the comment section after their debate, and you’ll see how not to think about this sort of issue.
When I think about causation, I approach it in terms of counterfactuals. Suppose we moved away from free trade? Suppose we discouraged automation. Suppose we reduced the benefits paid to middle age people not working. Each policy counterfactual might or might not have much effect, at the margin. My hunch is that reducing benefits and reducing incarceration would slightly boost the participation rate–but nothing dramatic.
He concludes with the observation that we don’t really know.
As I’ve written before, while I think that the hypothesis is possible I think that a) it hasn’t happened yet and won’t happen for some time; b) there are plenty of other factors which can explain present unemployment; and c) the burden of proof is on those who believe that technological unemployment is a present or near term problem.
1) We produce more…
2) With fewer human workers.
3) How?
In the real world, there are feedback loops which regulate processes. This is true with robots and importing.
Once robots have taken over and put everybody out of work, they will work all day and night producing goods and services that the now unemployed workers cannot purchase. The robots will soon become unemployed, or the owners will become penniless. This devolution will continue until human labor becomes cheaper than mechanical labor.
At some point, electricity will stop being produced or will be too costly to be used for manufacturing. The existing supply system cannot be supported by a country full of unemployed citizens (see Venezuela). Therefore, humans, once again, become cheaper than machines.
Voila, problem solved.
Since the Industrial Revolution began, the human population has increased. Many products that still exist can employ all the workers needed at that time. Had there been no progress, there would have been little need for the Industrial Revolution. Without an increased population, there is little need for the means to support that increased population.
Imagining the world without the means to bring it into existence is called fantasy.
The reason that the free-traders are able to produce un/under-employed workers without a systemwide breakdown is because the US (and the entire world) have a financialized economy. The lost wages are replaced by indebting workers. The problem today is that peak-debt most likely has been reached, and this is why the economy is dragging along.
For the “it has never happened before, but this could be the first time” response, I am willing to play the game. There will be leprechauns passing out pots of gold to all the unemployed.
I we don’t destroy the world with nukes, probably more likely we end up with lots of cheap electricity from fusion, better nuclear and solar/wind.
Steve
Nuclear fuel and disposal costs money. Nuclear, solar, and wind all require manufacturing, construction, installation, service, repair, replacement, and disposal, and all of this costs money. Unless the workers are going to donate their time or the robots are going to do all the work, the electricity will need to be sold at a cost high enough to allow at least a break-even return.
Note that the robots will have the same manufacturing, servicing, etc. requirements also.
While it works perfectly in the Star Trek universe, for a real world example, see Venezuela.