Robots, China Cause Millions of US Job Losses- Report

Robotization has certainly ruined many jobs, putting more reliance on automated machines rather than manpower.

Not only automation has caused unemployment, innovation and technology destroyed many jobs as well "Technological unemployment". Whether it's record stores, DVD stores, or even photographic processing, switchboard telephone operator, bowling alley pinsetter, lift operator, film projectionist, bridge toll collector, railway station ticket seller, not to mention robotics-based automobiles industry.

[caption id="attachment_90106" align="aligncenter" width="616"] Automatic railway ticket machines[/caption]

Many Democratic presidential candidates in the United States have been locked in a debate over job losses in the country.

Noah Smith, an assistant professor at Stony Brook University said in an article published by Bloomberg Opinion that the 2020 US presidential candidate Andrew Yang referred to automation as the main cause of job loss, proposing to provide a basic income to provide more employment opportunities.

Moreover, both candidates John Biden and Bernie Sanders, arguing that a federal job should be guaranteed.

On the other hand, candidate Elizabeth Warren, bucked that trend by declaring that the main reason for job losses was bad trade politics.

The Associated Press Fact Check says economists often blame job losses on automation rather than business deals, however, the facts are not as clear as the AP listed. The reasons for job losses remain controversial among economists.

There were two main reasons for job losses in the past decade, being stagnation and aging of the population. The Great Recession caused widespread job losses and slowed employment, and after the recession ended the employment rate recovered once again.

But the fact that everyone has a job does not mean they have a good job, as many politicians have lamented the low employment rate in high-income industrial jobs.

By 2022, the total task hours completed by humans will drop by 13%, according to the World Economic Forum statistics.

Also, a research carried out by Deloitte, and the University of Oxford predicted that 35% of the jobs we do today in the UK could go to robots by 2034.

The proportion of Americans employed in manufacturing has declined steadily since the early 1950s, from around 33.3% in 1953 to 8.5% today.

Much of the decline is due to increased productivity involving automation, long before robots, including better machine tools and factory process developments allowing fewer workers.

If the demand for industrial goods was able to rise further, one would not have faced a decline in the proportion of factory workers.

But on the contrary, citizens became more satisfied with their cars, homes and physical goods, and started spending more money on education, healthcare, insurance, travel, entertainment, etc.

So many Americans are starting to work in the service industry, which usually offers lower wages than factory jobs, perhaps because they require less skills, yet, the service sector is less powerful in trade unions.

The mild recession in 2001 was not enough to cause that catastrophic downturn, and even after the economy recovered, manufacturing operations continued to decline.

The loss of jobs usually measured is not the actual number of jobs that have disappeared, but rather the gap between the reality and the illusory future of abundant factory labor and stagnant productivity.

In addition to being a very peculiar definition of job losses, If productivity did not rise in the first decade of the third millennium, American products would likely lose to their overseas competitors faster than they did.

[caption id="attachment_90107" align="aligncenter" width="616"] Telephone operators[/caption]

But what has often happened is that productivity has increased very quickly because only the most efficient factories have managed to survive the Chinese attack by cheap goods, through the use of offshoring and franchising.

The China Syndrome lead to rising imports, higher unemployment, lower labor force participation, and reduced wages in US local labor markets.

When it comes to the actual number of industrial jobs lost to an external competitor via imported goods in the 2000s, the most serious estimate puts the share at around two-thirds.

A research paper estimated the total of jobs lost to China between 1999 and 2011 are estimated between 2- 2.4 million jobs, accounting to about 60% of manufacturing jobs lost between 2000 and the beginning of the Great Recession.

The stagnation of wages in the manufacturing sector during this period is further evidence that competition has been a major factor in increasing productivity.

[caption id="attachment_90104" align="aligncenter" width="616"] Automated Vehicle factory[/caption]

Although economists do not know exactly how many industrial jobs were lost due to Chinese competitors in the first decade of the 21st century, they are likely to be many.

Fortunately, that competitive threat has diminished as production costs increase in China, while automation is not yet the threat that Yang and others stress.

Rather than worrying about the problems of the past or the unknown, politicians should focus on improving the welfare of workers today, by strengthening unions, improving the social safety net, and encouraging industry and technology in the United States.

The World Bank's World Development Report 2019 argues that while automation displaces workers, technological innovation creates more new industries and jobs on balance.