The Luddites weren't wrong, they were just 200 years ahead of their time. JL
Eduardo Porter reports in the New York Times:
Over the last 40 years, jobs have fallen in every single industry that introduced technologies to enhance productivity. Research has concluded robots are reducing demand for workers and weighing down wages, which have been rising more slowly than productivity. There is a small island of educated professionals making good wages at corporations which reap hundreds of thousands of dollars in profit per employee. A sea of less educated workers are stuck at businesses like hotels, restaurants and nursing homes that generate much smaller profits per employee and stay viable by keeping wages low.
It’s hard to miss the dogged technological ambition pervading this sprawling desert metropolis.There’s Intel’s $7 billion, seven-nanometer chip plant going up in Chandler. In Scottsdale, Axon, the maker of the Taser, is hungrily snatching talent from Silicon Valley as it embraces automation to keep up with growing demand. Start-ups in fields as varied as autonomous drones and blockchain are flocking to the area, drawn in large part by light regulation and tax incentives. Arizona State University is furiously churning out engineers.And yet for all its success in drawing and nurturing firms on the technological frontier, Phoenix cannot escape the uncomfortable pattern taking shape across the American economy: Despite all its shiny new high-tech businesses, the vast majority of new jobs are in workaday service industries, like health care, hospitality, retail and building services, where pay is mediocre.The forecast of an America where robots do all the work while humans live off some yet-to-be-invented welfare program may be a Silicon Valley pipe dream. But automation is changing the nature of work, flushing workers without a college degree out of productive industries, like manufacturing and high-tech services, and into tasks with meager wages and no prospect for advancement.Automation is splitting the American labor force into two worlds. There is a small island of highly educated professionals making good wages at corporations like Intel or Boeing, which reap hundreds of thousands of dollars in profit per employee. That island sits in the middle of a sea of less educated workers who are stuck at businesses like hotels, restaurants and nursing homes that generate much smaller profits per employee and stay viable primarily by keeping wages low.Even economists are reassessing their belief that technological progress lifts all boats, and are beginning to worry about the new configuration of work.Recent research has concluded that robots are reducing the demand for workers and weighing down wages, which have been rising more slowly than the productivity of workers. Some economists have concluded that the use of robots explains the decline in the share of national income going into workers’ paychecks over the last three decades.Because it pushes workers to the less productive parts of the economy, automation also helps explain one of the economy’s thorniest paradoxes: Despite the spread of information technology, robots and artificial intelligence breakthroughs, overall productivity growth remains sluggish.“The view that we should not worry about any of these things and follow technology to wherever it will go is insane,” said Daron Acemoglu, an economist at the Massachusetts Institute of Technology.Semiconductor companies like Intel or NXP are among the most successful in the Phoenix area. From 2010 to 2017, the productivity of workers in such firms — a measure of the dollar value of their production — grew by about 2.1 percent per year, according to an analysis by Mark Muro and Jacob Whiton of the Brookings Institution. Pay is great: $2,790 a week, on average, according to government statistics.But the industry doesn’t generate that many jobs. In 2017, the semiconductor and related devices industry employed 16,600 people in the Phoenix area, about 10,000 fewer than three decades ago.“We automate the pieces that can be automated,” said Paul Hart, a senior vice president running the radio-frequency power business at NXP’s plant in Chandler. “The work force grows but we need A.I. and automation to increase the throughput.”Axon, which makes the Taser as well as body cameras used by police forces, is also automating whatever it can. Today, robots make four times as many Taser cartridges as 80 workers once did less than 10 years ago, said Bill Denzer, Axon’s vice president for manufacturing. Workers’ jobs were saved because the company brought other manufacturing work back from Mexico.The same is true across the high-tech landscape. Aircraft manufacturing employed 4,234 people in 2017, compared to 4,028 in 2010. Computer systems design services employed 11,000 people in 2017, up from 7,000 in 2010.
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