Issues 2020: Automation Is Not What’s Hurting Workers

If output growth had remained at historical levels, manufacturing employment would be near an all-time high

NEW YORK, NY — Politicians, pundits, and even some economists regularly express fears about robots coming for American jobs, but their concerns are misplaced, according to a new Manhattan Institute issue brief. In the first of the Issues 2020 series, senior fellow Oren Cass explains that productivity growth, the key to understanding automation, has slowed in recent years. The problem for workers is that output growth has slowed even more.

Traditionally, automation has improved productivity by allowing fewer workers to do the same job, giving firms the ability to expand, employing the same or more workers to create more and better goods and services. If manufacturing output had grown this century at its 1950–2000 rate, the U.S. would have 6 million more manufacturing jobs today—more than existed in 2000. The key to improving prospects for workers in the American economy, according to Cass, is greater technological progress to re-establish industrial strength and generate strong output growth for workers.

Key findings include:

1. Manufacturing employment would be near an all-time high, with six million more workers employed, had the industry’s output growth this century kept pace with its 1950-2000 rate;
2. The U.S. is far behind other developed countries in robot adoption and continues to rely as heavily on production-line workers as decades ago; and
3. Forecasts of future automation suggest the rate of progress will be no faster than in the past.

Click here to read the full report.

The Issues 2020 series applies the Manhattan Institute’s breadth and depth of expertise on major issues of national public policy to the key arguments and proposals of the 2020 presidential campaigns. MI scholars identify where the central claims driving key debates reflect fundamental misunderstandings about what is happening in America. With succinct explanations of what the data show, they provide a much-needed corrective and a solid foundation for political debates about the nation’s future. Click here to read more.