Who Benefits from Automation?
We recently had new hardwood floors installed in our house. Upon seeing them, a neighbor said, “I bet you’re a slave to these floors now,” meaning that we work hard to keep them looking clean and shiny. “You’ve got to get a Roomba! It’s a lifesaver!”
I checked into the automated floor-cleaning robots, and found they ranged in price from about $200 to $1,000. This seemed a bit pricey when my broom cost less than $10, and frankly, I don’t really mind sweeping the floor. It’s a good way to clear my mind and get some exercise while accomplishing a household chore.
But I get that some people might want to buy a device that over time will cost a lot less than hiring someone to come clean up. Automation creates opportunities to save money and reduce the number of unwanted tasks we do at home and also has revolutionized our workforce.
That future is already here. Think about how many different tasks that we do ourselves online that were once done by a person. While reservations agents used to be the primary way that people made reservations for travel at hotels and for airfare, now we can easily do this online. Your local bookstore, video, or music sales clerk isn’t there anymore; we typically get books, movies, and music online too.
How has this impacted our economy already? Many people who have the technical skills have been able to get jobs in the tech industry within e-commerce and start new businesses that most could not have imagined even a decade ago. But for others who once held mid-level service positions, jobs that might have provided a modest but sustainable living, those opportunities have all but disappeared.
Fully 76 percent of the Pew Research Center’s respondents reported that they were concerned that automation in the workforce would exacerbate income inequality. Many jobs in warehouses, which might have paid modestly but provided steady income for workers, have already been replaced by robots in e-commerce fulfillment centers, as Sally Raskoff’s post from earlier this year details.
Most of the Pew survey’s respondents—70 percent—did not think that automation would affect their own jobs, and just 6 percent responded that they believed that their jobs have already been impacted by automation (which includes losing a job to automation or seeing their hours or pay reduced).
But whether we are aware of it or not, automation has probably already affected many of our jobs, even in ways that might not be obvious. Automation has likely contributed to many industries hiring fewer workers due to consolidation or increased worker productivity. Has technology made you more efficient in your job? If so, there might be less of a need to hire more workers than in the past.
Take my industry, education. When I was a student in the late 1980s, I held a work-study job answering phones in an admissions office. We would regularly get calls from prospective students requesting information about specific programs. We had forms to fill out to give to the mail department, who would then send out information packets to the people who called.
Today a prospective student can go to a website and view all the information there. If they want to talk with an admissions counselor they can fill out a contact request form online. So most of the people in the mail department are no longer needed in that office. And of course the post office no longer makes the money processing large volumes of mail that they once did, reducing the need to hire people in your local post office (if it hasn’t already closed).
In those days, when word processing software was less useful and more technical, many if not most faculty members gave their syllabi to an administrative assistant to type. One department I worked for as a student had several people on staff whose main responsibility was to type up syllabi and other assignments as directed by professors. Of course today we are expected to prepare all of our syllabi and assignments ourselves.
This is progress, and we can’t turn back the clock. Hypothetically we should all benefit from lower costs for a number of services, but the cost of education, for one, has dramatically increased since I was a student and presumably labor costs were higher. As this graph details, income has remained flat for the bottom 40 percent of earners while growing substantially for the top 20 percent. Automation has not benefitted everyone equally
What can be done? Among the Pew survey respondents, 85 percent favored or strongly favored a future policy where “machines are limited to doing dangerous or unhealthy jobs,” and more than half agreed that “there should be limits on [the] number of jobs that can be replaced by machines.” But automation is a process that will likely not stop anytime soon, and policies that reduce profits are unlikely to be adopted. What do you suggest might reduce the income inequality associated with automation?