Progressive and smart economist Jared Bernstein on the productivity puzzle of robots eating all the jobs (or not):

Productivity growth was up 1% last year and has averaged 0.8% since 2011, a smooth trend through the numbers. The trend suggests that the pace of productivity growth has decelerated since the first half of the 2000s which begs an important question.

 

I keep hearing about ‘the end of work‘ based on the assumption that the pace of labor-saving technology such as robots and artificial intelligence has accelerated. Maybe it has. There’s lots of good anecdotes to that effect, most recently that geeky-looking Google self-driving car.

 

But the robots-are-coming advocates need to explain why a phenomenon that should be associated with accelerating productivity is allegedly occurring over a fairly protracted period where the [productivity] trend in output per hour is going the other way.

 

A shave with Occam’s razor [explanation] would be weak demand and its corollary, weak capital investment [nothing to do with robots]. Until someone can convince me what’s wrong with the above argument, I don’t want to hear that automation is precluding full employment.

 

My own take: We’re still coming out of a severe macroeconomic down cycle, credit crisis, deleveraging, liquidity trap. The prevailing pessimistic economic theories (death of innovation, robots eating all the jobs, crisis of inequality) will fade with recovery.

For bonus points, identify the other tech-driven economic force that could explain low productivity at a time of great tech advancement. My nomination: Tech-driven price deflation; lowers prices, reduces measured GDP and productivity, while boosting consumer welfare.

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12

Category:
Business

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