Saturday, March 25, 2017

Ryan Avent — How Automation with a Robust Safety Net Increases Productivity


Workers replaced by technology don't drop out of the labor market because then the would face poverty, alone with bankruptcy and seizure of assets if they are indebted, as most workers are. So workers replaced by technological innovation have to seek reemployment. This drives down the wage and employment conditions that workers in general are willing to accept.
So there you are: continued high levels of employment with weak growth in wages and productivity is not evidence of disappointing technological progress; it is what you’d expect to see if technological progress were occurring rapidly in a world where thin safety nets mean that dropping out of the labour force leads to a life of poverty.
Technological innovation that increases productivity provides the opportunity for increased leisure but this doesn't mean that this opportunity will be distributed, especially when the benefits accrue chiefly to owners, top management, and highly skilled workers associate with the technology.

Evonomics
How Automation with a Robust Safety Net Increases Productivity
Ryan Avent | senior editor and economics columnist at The Economist

11 comments:

Bob said...

If you accept this argument, how can it be mitigated? UBI? JG? Both?

Tom Hickey said...

The basic challenge is distributing increased leisure.

Previously it was done by extending the weekend, going to the 8 hr workday, and increasing holidays and vacation time, as well as pensions allowing retirement and longer time spent in school.



Matt Franko said...

Pension systems rely on positive interest rates....

Andrew Anderson said...

Technological innovation that increases productivity provides the opportunity for increased leisure but this doesn't mean that this opportunity will be distributed, especially when the benefits accrue chiefly to owners, top management, and highly skilled workers associate with the technology. Tom Hickey

Yet the technological innovation has often been financed with what is, in essence, the public's credit.

Not to mention DIRECT government investment in technology development and basic research.

Andrew Anderson said...

Pension systems rely on positive interest rates.... Franko

If pensioners need welfare then let's give it to them but proportional to need not account balance.

Calgacus said...

Tom: The basic challenge is distributing increased leisure.

No, it isn't. Any way one looks at it, beyond a point, "increased leisure" is (a road to) hell. Most of the measures mentioned were something like restoration to norms before capitalism.

The challenge is ensuring, offering everyone a reasonable place in society - which entails as much leisure as they choose, within reasonable / real / social constraints. Not manufacturing and distributing unwanted leisure, which is a primary tool of capitalist control of society, that makes the other side, the unwanted deprivation of leisure, look good.

Bob said...

Mass unemployment = distributed leisure

Andrew Anderson said...

Not manufacturing and distributing unwanted leisure, Calgacus

If leisure is unwanted, it's because it is not sufficient in itself, e.g. prisoners have plenty of leisure but little to spend it on. Hence the popularity of prison factories among prisoners aside from the petty income they earn. Likewise with those without jobs with insufficient means* to employ themselves - doing what they desire, when and how they desire doing it.


*Land, workshops, income, etc.

Andrew Anderson said...

So I suggest you and Neil work to free people, not supplement private wage-slavery with public wage-slavery.

Tom Hickey said...

Mass unemployment = distributed leisure

According to conventional economics, which views all unemployment as voluntary.

Bob said...

What about the lump of labour fallacy? Doesn't that preclude the redistribution of work itself?