Will Robots Eliminate 5 Million Jobs in the Next 5 Years? by Robert Wenzel. Robots are just capital goods. Like any capital good, they make people more efficient — without a shovel you have to dig with your hands. Capital goods make the world a much richer place.
Could robots, eliminate 5 million jobs? Of course! Capital goods always free up labor for different kinds of work.
Hell, wheels on luggage have resulted in something like 70% of hotel bellmen jobs being eliminated.
Wenzel takes exception to the notion that the net effect would be 5 million jobs lost, with no new jobs to replace them:
This indicates a fundamental failure to understand basic economics. In an economy, markets clear, that is, if there is more supply of a good the price will drop. This includes wages. Unless the price of labor goes to zero, there is demand for labor.
Like most economists, Wenzel knows that minimum wage laws increase unemployment, and a better solution is to integrate wages and social security payments. So are robots good?
Here is the real kicker. If capital goods are used to increase production, which they do, and they free up individuals for other work, which they do, then the amount of output in an economy increases. The more output, the more access individuals have to goods and services. In other words, increases in capital, including robots, are always a good thing. They increase the standard of living for an economy overall. Just think about what an economy would be like without cement trucks, freight planes, computers, forklifts, factory equipment and on and on.
Without capital, there would be jobs for all of us, but it would be gruesome work and the standard of living for all of us would be much, much lower. All hail the robots!