Feature Post: Does Automation Cause Job Loss?

This is from a post on 12/30/2009.  Go to the original post to comment.

Does Automation Cause Job Loss?

This topic comes up quite regularly. I’ve had to wrestle with this question myself as what I do has the potential to displace workers.

On a short term basis the answer would be yes. At least some of the time workers are displaced by automating an operation that used to be done manually. Interestingly, this does not come up as much as someone might think. Most of the time operators are happy that a manual or error prone task has been automated, allowing operators more control over their operations.

Stepping back from the question a bit; if we consider the time since the industrial revolution began, and then note that up until just recently unemployment in the United States was at a record low, being under 5%, it would seem that automation does not put people out of work in the longer term. Instead people do different things to bring more goods and services to each other, creating demand for these goods and services and in the end increasing our standard of living.

In fact it seems evident that automation has had the effect of increasing our standard of living by allowing each worker to produce more and higher value for their companies. As a result this has raised our gross domestic product (GDP) and the economy as a whole.

Without automation we would perhaps still all be living mainly on family farms with a comparatively modest standard of living. Or alternatively we would be working in factories in fairly hazardous environments. Or perhaps other countries would have automated while we lagged behind creating goods that are not competitive in the global market place. This latter scenario would have the result of causing unemployment anyway.

So in the end, while automation can cause short term job loss, looking at the longer term it seems evident that automation is actually a catalyst that has increased our living standard.

Updated 2/9/2010 | Created 12/30/2009

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