Robots aren’t stealing our jobs

It may seem a rather odd title, but there’s a very lively debate going on in the UK and US on whether robots are stealing our jobs.

The typical argument suggests that as technology advances, machines are able to do the repetitive and precise jobs of skilled workers. This reduces the demand for these jobs, which in turn is hollowing out the middle of the workforce: robots are stealing jobs.

Now I’ve got lots of problems with this theory and the implication for economic policy.

Alan Manning (a professor at the London School of Economics) captures one of the problems pretty well:

Indeed, rather than too much capital investment in robots, it seems  more likely that Britain’s much-discussed current stagnation in living  standards is caused by too little capital investment. Rising wages have  traditionally been associated with giving workers more capital with  which to work and new capital tends to embody the latest technology.

In other words, investing in technology helps raise wages (not to mention creating more jobs) and that maybe the best way to raise living standards is investing in more robots, not less.