A Young Illinois Reader Notes Progress In Industrial Robotics—Is Immigrant Labor Obsolete?
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From: A Young Illinois Reader [Email him]

I would like to call your attention to this revealing conversation from Bloomberg TV on the subject of labor-saving automation. The chart presented in the video clip is from a Boston Consulting Group study that anticipates substantial implementation of industrial robotics here over the next decade.

Rise of the Robots Lowers Industrial Labor Costs

In today's "Single Best Chart," Bloomberg's Brendan Greeley displays the projected savings in labor costs by 2025 from work done by robots. He speaks on "Bloomberg Surveillance." (Source: Bloomberg, April 17, 2015)

To their credit, the panelists (including economist Dr. Edmund Phelps) sympathize with the concerns that automation engenders among workers, but their consensus about the prospects for American labor is generally blithe.

There are a couple things to be said about this exchange, which is pretty representative of economic elites' attitudes.

First, there is no rule in economics that says workers must end up with better jobs after labor-saving technology is introduced. They often have, historically, but then again, our ability to automate is getting ever more advanced, whereas human nature is not. It seems entirely possible to me that many workers will have little to offer that can't be done more efficiently without them. Such workers would end up either unemployed or shunted into low-wage, low-status service sector positions in a "Downton Abbey" economy.

Second, further increases in automation will not be appearing in a vacuum. They will be occurring on top of chronic stagnation in wages and employment for the working class. If these are persistent features of the current labor market, why should we expect them to be mitigated with additional structural dislocations?

That's not to say that industrial automation is something to be deplored. As panelist Hal Sirkin says, "we need to be competitive as a nation." It's better to be competitive on high labor productivity (e.g., South Korea, near the leading edge of automation) than on low wages (e.g., India, where labor is too cheap to justify much automation). It is precisely because a leaner, more technologically leveraged labor force is desirable that we should avoid having an excess pool of unskilled workers.

In this context, the panelists' complete omission of the "i" word seems like a gross oversight. The notion that we can build a hi-tech, high-productivity economy on the backs of an ever-growing imported peasantry is absurd on its face. I think it's fair to say that further importation of unskilled labor represents a net liability for the 21st-century welfare state.

I should note that although immigration isn't mentioned here, Chuck Schumer is mentioned, in the context of his alleged concern for the American worker. As we know, Mr. Schumer wants only the best for our Proposition Favela.

See previous letters from this reader.


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