Of course we have not seen workers getting the benefits of productivity growth in higher pay in recent years. This is due to policies and institutional changes that undermine workers’ bargaining power. For example, trade policy has deliberately put manufacturing workers in competition with low paid workers in the developing world. The Federal Reserve Board routinely raises interest rates to slow job growth when it fears that workers are getting too much bargaining power and could possibly get inflationary wage increases. And, lower unionization rates mean that workers are less effective in demanding higher pay from employers.
For these reasons, most workers have not gotten their share of the gains from productivity growth, but there is another problem with the robots displacing workers story. Rather than robots leading to a massive surge in productivity, in recent years productivity growth has been unusually slow. According to the Bureau of Labor Statistics, annual productivity growth has averaged less than 0.6 percent since 2010. This compares to an average rate of 3.0 percent in the Internet boom years from 1995-2005 or 2.8 percent in the long post-World War II boom from 1947-1973. Even in the years of the productivity slowdown, from 1973-1995, had a 1.4 percent annual rate of growth, more than twice the recent pace. In short, there have not been many gains to share…
The Six-Hour Work Day: Preparing for the Attack of the Robots | Beat the Press | Blogs | Publications | The Center for Economic and Policy ResearchPosted: October 15, 2015 in Economy