OPINION:
Ever since the wheel, Luddites have warned that new technologies spell doom.
If we listened, humankind would have long ago been replaced by a smarter species.
Nowadays, alarmists hyperventilate about robots, artificial intelligence and the marriage of the two in self-programming machines.
Business and government responses to pandemic shutdowns — working from home, Zoom and other collaborative technologies — have proved enduring and are permanently reshaping cities, workers’ expectations and labor markets.
Downtown office occupancy is way down, retailers and restaurants are shuttered, and a shortage of workers has accelerated the deployment of robots and AI.
After COVID-19, supply chain disruptions caused by Russia’s invasion of Ukraine, the looming recession and whatever else the Greek gods choose to throw at humanity to knock civilization from its axis, many lower-wage jobs in factories, drugstores and distribution centers are fading away. Businesses are replacing metal workers, cashiers and drivers with smart robots, scanners and soon, delivery drones.
In 2022, orders for new robots hit record highs, as AI makes those machines smarter. Robotics is finally spreading from the automotive sector, where it enjoys its most concentrated presence, to food processing, pharmaceuticals, many consumer products and distribution.
New tools like OpenAI’s ChatGPT will leverage professionals’ time much like nurses, paralegals and research assistants do now for physicians, lawyers and professors.
MIT economics professor Daron Acemoglu warns that present labor shortages are temporary and reliance on automation will result in a shortage of jobs and drive down wages.
Enter stage left, the progressive boogeyman — more inequality!
By that reasoning, the wheel should have been burned, horses left in the wild and goods forever pulled from place to place by ignorant laborers hitched to sleds.
The Erie Canal and railroads should not have been built to replace teamsters, and the Wright brothers should have been locked up as capitalist tools bent on arming the rentier class with airborne bayonets to exploit the proletariat.
The professor’s work — much like that criticizing the benefits of free trade — shows that in industries where automation is most prominent, the wages of less-educated workers are inclined to fall. But that is a jaundiced view of the world.
The income generated by higher productivity may initially be concentrated in the hands of those who own the machines, enjoy patent royalties and a management class that happily exploits wage arbitrage. But as they spend their bounty, it creates broader growth and jobs in other industries and boosts research and development.
Technological progress and competition put the capitalist class in a squirrel cage — run to innovate or perish.
Ask General Motors. Toyota’s rise in the 1970s was as much about superior factory management and productivity as it was lower Japanese wages, and now Tesla is taking it to school again.
Just as turnpike and canal advocates opposed railroads, pious, self-appointed spokesmen for minorities and low-wage workers want to use public procurement and taxes on robots to slow automation.
That’s silly.
Japan, Germany and South Korea all lead the United States in robots deployed per 10,000 employees. Yet in those countries, the shares of workers earning low pay — defined by the Organization for Economic Cooperation and Development as less than two-thirds the national median wage — averages about 14%, whereas in technophobic America, it’s 23%.
Where do we see the most tent cities — Tokyo, Seoul, Berlin or San Francisco?
During the recent recovery in which automation and new collaborative technologies have been so prominent, low-skilled workers from industries like retailing, restaurants and lodging have been seeking out retraining for tech-centric positions, and firms like Levi Strauss and Verizon are offering to upskill employees displaced by technology.
Corporations are abandoning degree requirements and recognizing that workers often acquire valuable skills outside the traditional higher education system.
Consequently, lower-wage and less-formerly educated workers are enjoying rapid pay increases in step with the middle class and professionals. Yep, free markets work better than social engineers, government bureaucrats and cynical progressive politicians trolling for votes.
Similarly, the United States has not benefited from free trade as it should, because the World Trade Organization does a better job of opening American markets to foreign competition than opening foreign markets to U.S. exports. And the U.S. dollar’s role as a reserve currency makes the world eager to buy U.S. bonds and property to finance the resulting trade deficits.
The result is greater concentration of workers in low-wage service jobs that is knocking down R&D enough to subtract significantly from U.S. productivity and GDP growth.
If America and its allies don’t exploit automation and push the frontiers of AI, our competitors and bad actors will. According to Russian President Vladimir Putin, “Artificial intelligence is the future. … Whoever becomes the leader in this sphere will become the ruler of the world” AI is central to China’s social control systems.
Take your pick: Presidents Putin and Xi Jinping or Presidents Biden and Ursula von der Leyen.
• Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.
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