The robots are coming! The robots are coming!
The White House is concerned that robots are coming to snatch low-wage jobs.
In a report to Congress last week, White House economists predicted that there’s an 83% chance that workers making under $20 per hour will lose their jobs to robots.
Even wage earners making up to $40 in hourly pay run a 31% chance of being replaced by robots, while those who earn more than $40 are relatively secure – with only about 4% risk of losing their position to automation.
The estimates highlight the very large threats facing low-wage workers in America, who have already been crushed in recent years by stagnant wages, shrinking employment prospects and rising education costs if they want to earn the degrees they need to attain better-paying jobs.
In an economic landscape increasingly defined by the widening gap between rich and poor, White House economists fear that increased automation could make that inequality even worse, as the well-paid enjoy the gains of robot-fueled productivity, while everyone else is left to fight for the crumbs.
One study referenced by the White House showed that automation has especially hurt middle-skilled Americans, like bookkeepers, clerks and assembly-line workers. The shortage of additional training and education opportunities has left these workers with few options except lower-skilled positions, and even lower wages.
Already, the White House highlighted in its report, most economists consider these changes in technology as “partially responsible for rising inequality in recent decades.”
Robots and other advances in technology are expected to displace a sizable number of blue- and white-collar workers, according to nearly half of the experts surveyed by the Pew Research Center in 2014. They also predict that robots and “digital agent” will eat up more jobs than they create by 2025.
Many experts surveyed by Pew noted a significant concern that the rise of robots and other advances I technology “will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order.”
Of course this is not a new concern. In 1930 the famed economist John Maynard Keynes wrote extensively about “technological unemployment,” or the theory that workers could become unemployed as a result of society’s improving labor efficiency at a faster rate than it finds new uses for labor.
Yet White House economists admit that they lack sufficient information to determine whether increased automation will boost or hurt the U.S. economy. For instance, new jobs might be created to develop and maintain robots, or other new forms of technology.
“While industrial robots have the potential to drive productivity growth in the United States, it is less clear how this growth will affect workers,” the White House said in its report.
The prospects raise two important questions, according to White House economists. 1) if robots replace existing workers, will those workers have enough bargaining power to share in their employers’ newfound gains? 2) will the economy create new jobs quickly enough to replace the ones that disappear?
Falling union membership — some 11% of U.S. workers had union membership last year, a significant drop from the rates of 20% in 1983. This development indicates that workers may not have sufficient power to demand higher wages from employers who are automating them out of a job.
Perhaps the economy will create enough new, decently-paid jobs to help those displaced by robots, but the plight of factory workers who have lost their jobs in recent decades as manufacturers shipped work abroad suggests that this could also be a challenge.
Instead, according to the White House, the key will be to develop a “robust training and education agenda to ensure that displaced workers are able to quickly and smoothly move into new jobs.” With most Americans now financing higher education through debt (nearly 1 out of 8 Americans collectively owe $1.3 trillion in student loans) within this era of sluggish wages, it’s not clear if higher debt burdens will translate into a better economic future.