February 22, 2016

Automation likely to displace workers making less than $20 an hour, CEA says

Workers making more than $40 an hour face virtually no chance of displacement, report finds.

By DC Velocity Staff

There is an 83-percent probability that automation will replace workers whose wages are less than $20 an hour, the White House's Council of Economic Advisors (CEA) said today in releasing its 2016 economic report.

By contrast, there is a 31-percent chance of automation substituting for workers who make between $20 and $40 an hour, and virtually no chance of it replacing workers whose hourly wages exceed $40, CEA said.

Those in the higher wage scale will find their work "complemented and improved" by workplace automation, CEA said.

Data on wages paid to warehouse and DC nonmanagement workers is difficult to come by. However, it is thought that workers in nonsupervisory roles make less than $20 an hour. The CEA report did not highlight salary conditions in the logistics field.

Worldwide shipments of industrial robotics, which are being eyed as the next frontier in warehouse workforce staffing and management, more than doubled from 2010 to 2014, to 229,000 units, according to the report. In 2012, the last year of data cited in the report, the U.S. had, on average, 135 robots for every 10,000 workers. That lagged Japan and Germany, but was ahead of China, according to the report.

The report found that, between 1993 and 2007, robotics added an average of 0.37 of a percentage point to a country's annual GDP growth, accounting for about 10 percent of all GDP growth during that period.

Citing a 2015 outside research paper, CEA found that higher levels of robot density within an industry leads to higher wages in that industry. Though that finding suggests that robotics are complements to labor, it is also possible that the higher wages are due to robots replacing lower-skilled workers in that industry, thus skewing wage estimates upward, CEA said.

The report had some historical reassurance for those worried that machines will take large numbers of jobs away from humans. Though machines over several centuries have been increasingly been performing tasks once done by humans, this trend has resulted in higher incomes, greater consumption, and more jobs for almost everyone who wants them, the report said.

"In other words, as workers have historically been displaced by technological innovations, they have moved into new jobs often requiring more complex tasks or greater levels of independent judgment," CEA said.


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