Has The Rise Of Industrial Robotics Increased Worker Wages? | Straight Talk


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This article is by Featured Blogger Adi Gaskell from his blog The Horizons Tracker. Republished with the author’s permission.

The predominant narrative in the past few years has been that new technology will destroy our jobs.  This overly simplistic perspective doesn't really have any evidence to support it, and the latest study to dispute the dystopian predictions comes from a recently published paper from Uppsala University and the London School of Economics, which shows that the introduction of industrial robots has actually increased wages for employees while also increasing the number of job opportunities for highly skilled people.

The researchers conducted a comprehensive analysis of the economic impact of industrial robots over 17 countries between 1993 and 2007 across 14 different industries.  The period of analysis corresponded with a huge rise in the use of industrial robots, with the price of such machinery also falling by approximately 80%.  What impact did this have on the human workforce?

"We can see that industrial robots increase employee wages and increase productivity and that the number of jobs for low-skilled employees, and also to some extent for the medium-skilled, decreases, while job opportunities for the highly skilled increase," the authors say.

Changing workforce

In other words, the wages of workers seem to increase after the introduction of robots into the workplace, with the authors hypothesizing that the introduction of new technology raises profits, which are then divided among the company and the workers.

The analysis echoes other research which highlights the trend towards a labor market with a higher proportion of higher skilled workers, but it does also highlight that the introduction of robots into the workforce didn't reduce the overall number of jobs at all.

What it did seem to do however is increase the productivity of the workforce, with the researchers claiming that they helped to increase GNP by 0.37%, and the overall productivity of workers by 0.36%.

"This means that without industrial robots, growth in labor productivity would have been about 5% lower during the 14 years we have studied," they say.

Like the railways

The authors liken the contribution of robots to the economy to that of the railways in the 19th century, or even to the various IT-based technologies introduced more recently.  They are however much less capital intensive, and account for just 2% of overall capital expenditure, which is a much more efficient investment than previous technologies.

Of the countries surveyed, the number of robots grew most rapidly in Germany, Denmark and Italy, and there appeared to be a clear link between the rise in robots in the workplace and the increase in overall labor productivity.

Whilst the research only covered the period to 2007, the authors believe there is no reason at all why this trend cannot continue, although there is a sense of diminishing returns as you add more and more robots into the workplace. Despite this, the researchers believe that robots will continue to contribute to an increase in both economic growth and labor productivity.

"Industrial robots are evolving and will be able to do more. At the same time, new types of robots are coming, such as medical robots that can perform surgery or different types of robots for transport. This development will contribute to continued growth and production increases," they conclude.