Contrary to neo-luddite fears, industrial automation increases jobs and wages

Contrary to neo-luddite fears, industrial automation increases jobs and wages
Contrary to neo-luddite fears, industrial automation increases jobs and wages

“Robots will take away our work and turn us into a beggar servitor” - this is the weighted average slogan of opponents of automation of production, and at least once, perhaps, everyone has heard such arguments. But, as a review of nearly 40 years of active robotics in Japan has shown, bringing robots into work procedures only expands the job list, rather than displacing people from production. At least in the Land of the Rising Sun.

Contrary to neo-luddite fears, industrial automation increases jobs and wages

Interesting data was published recently on the portal of the World Economic Forum. This article is based on a series of studies by Japanese experts on the impact of industrial automation on the labor market. There is no doubt about the relevance of the data - the period under review includes almost four decades: from 1978 to 2017. However, before extrapolating the results of this work to other countries, it is important to take into account the peculiarities of Japan. But more on that later, first, the conclusions of the researchers.

Contrary to all possible slogans and prophecies of the opponents of robotization - neoluddites - the automation of production has led to an increase in the labor market. Moreover, it even contributed to the growth of wages. And, most interestingly, it reduced the average number of hours per shift for each employee. Indirectly, robots contributed to a decrease in labor migration between regions, and also did not affect the distribution of the working-age population between the service sector and industries. In concrete figures, the following picture turned out:

  • for every percentage point of cost reduction for robots, their "adoption" (production automation) increased by 1.54%;
  • a decrease in the cost of robots by 1% increased the employment of the working-age population by 0.44%;
  • accordingly, each percentage of robots 'adoption' caused an increase in employment by 0.28%;
  • each new robot per thousand workers led to an increase in employment by 2.2%.
Contrary to neo-luddite fears, industrial automation increases jobs and wages

For their assessment, the Japanese researchers used data from the International Federation of Robotics (IFR) and the Japan Robot Association (JARA). The analysis also took into account the average cost of one robot, which was calculated as a simple arithmetic average of the total number of robots sold in the country and their sales in monetary terms. By the way, we got an interesting distribution by type of device: welding machines fell the most, but assembly units in 2017 cost almost the same as in 1982. This data was overlaid with information about the labor market in different regions of Japan.

Significantly, the findings in this study are at variance with earlier analyzes of manufacturing automation in America. It turned out that each new robot per thousand workers, on the contrary, reduced employment in the industry by 1.6%. Explaining the resulting difference, experts turned to the economic characteristics of Japan in general and the robotics industry in particular.

Contrary to neo-luddite fears, industrial automation increases jobs and wages

Firstly, the Land of the Rising Sun has become a real pioneer in the automation of production, which is clearly seen in comparison with other states. As of the mid-1990s, Japan had more industrial robots than the rest of the world.And most of these items were locally produced. From the very beginning, the robot-makers were forced to compete with each other and create more and more perfect solutions. As a result, there was a smooth and gradual adoption of production automation in the country, they learned to use new technologies wisely and in a saturated market, where there is plenty to choose from.

Secondly, this factor was superimposed on the rapid development of the Japanese economy, which required more and more advanced tools to work in difficult conditions. Each pair of human hands that were freed found a place for itself in a safer, but also complex area. This is especially noticeable in the automotive industry.

And, finally, thirdly, the Japanese economy, and especially in those industries where robots are massively used, is export-oriented. Consequently, it actively developed after the saturation of the domestic market. In fact, it was the large-scale expansion of Japanese goods to other countries that played one of the key roles in such a successful industrial automation.

In conclusion, the researchers point out that their results need to be interpreted with caution. In modern conditions, the automation of production in other countries can lead to completely different effects. However, the findings of this scientific work are an excellent example of the possibility of positively influencing the economy with the help of robots, and at the same time not reducing the number of jobs.

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