Will robots and automation necessarily cause deep unemployment?

Not any time soon.

Automation, and increasing labor productivity, has been happening for well over 200 years. So, we need to ask: how is this different?

People in developing countries need a lot more hard goods, including housing, transportation, etc.  We in OECD countries have enough goods, but their quality and features can improve. We don't have enough services - there's lot of room for growth in healthcare, eldercare, education, etc, without unemployment.  Healthcare has a lot of room to expand, given how much illness there is, and how many people die prematurely (let alone the need to increase our maximum lifespan), so there's a need for a lot of research beyond direct healthcare services.  We have a lot of work to do fixing environmental damage (fisheries, ocean acidification, climate change, species extinctions, etc, etc).

We don't have to worry about finding enough work for everyone to do any time soon. So, automation and robots won't be a primary cause of a structural unemployment problem.

Robots will cause the same transitional problems we have always had: what to do with farm workers, horse carriage manufacturers, railway workers, auto workers, etc, etc, etc.

But, the rate of labor productivity growth isn't accelerating. To the contrary, it's a bit lower than the post-WWII rates. http://www.bls.gov/news.release/prod3.toc.htm  That means that automation isn't putting people out of work faster than the normal historical rate.  Also, we're not seeing any signs of large-scale shortages of people in new industries. On the contrary - medical researchers complain bitterly about a shortage of grant funding - only about 15% of grant applications are currently being accepted.  There are anecdotal reports of shortages of programmers, but this doesn't show any signs of relieving unemployment of new college graduates.  Certainly there are no signs of employers creating on the job training programs - instead, they seem to just complain that there's a shortage of ready-made candidates - this doesn't seem serious.

Lawrence Summers says: "The premium to higher education has plateaued over the last 10 years. We see evidence highly skilled workers have less rapid career trajectories and are moving into less skill occupation if anything. Productivity is not growing very rapidly, and a lot of the employment growth we’ve seen in the past 15 years has been in relatively low education, in-person service occupations." http://www.nextnewdeal.net/rortybomb/one-where-larry-summers-demolished-robots-and-skills-arguments

I'd say the current problems are social, not technological: elites have managed to take more power, and weaken unions and government regulation. Thus, middle class wages have stagnated, and unemployment has grown, while more income is going to capital (as we see in financial rates of return that are higher than overall GDP growth).  Capital income mostly goes to the wealthy, who tend to save their income and not consume, thus causing a shortage of aggregate demand.

Here's Krugman:  "

So what is really going on? Corporate profits have soared as a share of national income, but there is no sign of a rise in the rate of return on investment. How is that possible? Well, it’s what you would expect if rising profits reflect monopoly power rather than returns to capital.

As for wages and salaries, never mind college degrees — all the big gains are going to a tiny group of individuals holding strategic positions in corporate suites or astride the crossroads of finance. Rising inequality isn’t about who has the knowledge; it’s about who has the power.

 

Now, there’s a lot we could do to redress this inequality of power. We could levy higher taxes on corporations and the wealthy, and invest the proceeds in programs that help working families. We could raise the minimum wage and make it easier for workers to organize. It’s not hard to imagine a truly serious effort to make America less unequal.

 

But given the determination of one major party to move policy in exactly the opposite direction, advocating such an effort makes you sound partisan. Hence the desire to see the whole thing as an education problem instead. But we should recognize that popular evasion for what it is: a deeply unserious fantasy."

 

http://www.nytimes.com/2015/02/23/opinion/paul-krugman-knowledge-isnt-power.html?mabReward=R3&src=recg&mabReward=R3&module=Ribbon&version=origin&region=Header&action=click&contentCollection=Recommended&pgtype=Blogs