Tuesday, February 19, 2013
What impact will automation – the so-called "rise of the robots" – have on wages and employment over the coming decades? Nowadays, this question crops up whenever unemployment rises.

In the early nineteenth century, David Ricardo considered the possibility that machines would replace labour; Karl Marx followed him. Around the same time, the Luddites smashed the textile machinery that they saw as taking their jobs.

Then the fear of machines died away. New jobs – at higher wages, in easier conditions, and for more people – were soon created and readily found. But that does not mean that the initial fear was wrong. On the contrary, it must be right in the very long run: sooner or later, we will run out of jobs.

For some countries, this long-run prospect might be uncomfortably close. So, what are people to do if machines can do all (or most of) their work?

Recently, automation in manufacturing has expanded even to areas where labour has been relatively cheap. In 2011, Chinese companies spent 8bn yuan (£8.37bn) on industrial robots. Foxconn, which build iPads for Apple, hopes to have their first fully automated plant in operation sometime in the next five-to-10 years.

Now the substitution of capital for labour is moving beyond manufacturing. The most mundane example is one you will see in every supermarket: checkout staff replaced by a single employee monitoring a bank of self-service machines. (Though perhaps this is not automation proper – the supermarket has just shifted some of the work of shopping on to the customer.)

For those who dread the threat that automation poses to low-skilled labour, a ready answer is to train people for better jobs. But technological progress is now eating up the better jobs, too. A wide range of jobs that we now think of as skilled, secure, and irreducibly human may be the next casualties of technological change...