How to Freak Out Responsibly About the Rise of the Robots

It's fun to imagine an economy where machines are smarter than humans. But we don't need  an artificial crisis over artificial intelligence.

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It's become very fashionable very quickly to talk about robots and their insatiable appetite for your job. Industrial machines can and do replace human beings in car factories, electronics plans, and food manufacturing centers. But the editorial rage against the machines is messy, and the automatons might not have as much to do with our current jobs crisis as the volume of robot reportage might suggest.

Let's say it upfront: Technology can replace jobs and (at least temporarily) increase income inequality. From the spinning jenny to those massive mechanical arms flying wildly around car assembly lines, technology raises productivity by helping workers accomplish more in less time (i.e.: put a power drill in a human hand) and by replacing workers altogether (i.e.: build a power-drilling bot).

Some worry that AI is getting so smart that we're making workers replaceable at an accelerating rate -- not just with car assembly bots, but also with big data and software that do white-collar work. Technology of the robot and non-robot variety has been replacing people for decades. ATM machines and airport kiosks tellers and simple office software does the work of thousands of tellers, and attendants, and office assistants better than humans ever could. But we had many of these technologies in the 1990s when unemployment was about 4 percent. So what's changed?


The robot fascination is leading some to think we are living through a particularly disruptive Age of Robots right now, and that it might even be contributing to the slow recovery. Maybe, but the case is far from clear. In the Financial Times, the super-sharp Edward Luce advances some frightening thinking about the future of robots shoving workers out their office chairs under the admonishing headline (which he might not have written, himself) "Obama must face the rise of the robots." 

Must he, though? Where is the evidence that the Obama recovery has been slowed by a recent acceleration of industrial bots, as Luce suggests? In fact, Obama's so-called jobless recovery has been significantly more "jobful" than the recovery we had in 2001 when you compare the pace of private sector jobs created. The labor recovery has been only slightly worse than our pace following the early '90s slowdown.

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You might respond that all of these recoveries have been stamped out by accelerating technology. And that might be true. But if it is true, you would expect two things to be true, as well. First, you would expect GDP to grow considerably faster than jobs, as technology added to productivity without adding to payrolls. Second, it should be easy to make the case the technology is replacing workers on a massive scale because the most technologically advanced sectors should be performing the worst.

Real GDP growth in 2011 and 2012 barely kissed 2 percent, which is almost fine for a healthy economy and really not at all fine for a recovery. In that time, we added a similarly fine but not especially remarkable 180,000 jobs per month. This doesn't look to me like an AI nightmare. It looks more like an old-fashioned demand-starved economy.

When you tab over to the sector-by-sector breakdown of jobs lost and gained between 2008 and 2012, you find construction and manufacturing scraping the bottom. Let's draw a bright white line between these two. Construction, which is clearly the economy's worst-performance industry, hasn't had much productivity growth, according to the analysis from the McKinsey Global Institute, and its miserable performance reflects a simple truth that has nothing to do with robots. Nobody's buying houses.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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