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Robotics Businesses United States

Worker Pay is Stagnant -- Economists Blame Robots (cbsnews.com) 182

pgmrdlm writes: American workers are more productive than ever, but their paychecks haven't kept pace. Researchers with the Federal Reserve Bank of San Francisco have identified a culprit: robots. Economists Sylvain Leduc and Zheng Liu theorize that automation is sapping employees' bargaining power, making it harder for them to demand higher wages. Companies across a range of industries increasingly have the option of using technology to handle work formerly done by people, giving employers the upper hand in setting pay. The result -- a widening gulf between wages and productivity. The research may bolster proposals for universal basic income, which is a government cash stipend that typically doesn't come with requirements. Andrew Yang, a Democratic presidential candidate who's running on a platform of giving every American adult $1,000 per month in basic income, tweeted about the economic findings, writing that automation is "making it hard for workers to ask for more."

"We should just give Americans a raise," he wrote. To be sure, automation is leading to massive changes in work that are hitting some industries and workers especially hard, such as lower and middle-skilled workers. For instance, the ranks of office assistants and clerical workers is expected to shrink by 5% through 2026 as offices shift tasks to artificial intelligence and other software, according to the Bureau of Labor Statistics. This could result in a loss of 200,000 jobs.

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Worker Pay is Stagnant -- Economists Blame Robots

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  • Illegal immigrants did it!

    No, wait, China did it!

    No, wait, Muslims did it!

    No, wait, Robots did it!

    They ALL did it; ban anything that moves and let God sort it out!

    • The problem is lack of advancement ability.

      The traditional road to success, is the guy right out school, get a job in the mail room. Delivering mail to everyone he gets to know all the folks, where he then can get an advancement to a higher level job. and further up until he is the CEO of the company.

      Today
      There is no mail room, as people are doing most of their work via email. Entry level jobs are located in a particular department, and discouraged from interacting with other units. where we are expected

      • Re: (Score:3, Insightful)

        by apoc.famine ( 621563 )

        I think you're about a third right.

        First, the "traditional road to success" you describe is a load of illogical shit. There's 1 CEO and 400 employees. All 400 of those employees aren't going to be able to work their way up the CEO. Not even 40 will be able to break into upper management over their careers. Most people are very comfortable settling into a middle-of-the-road job and staying there for a long time, provided 1) they get incremental raises, and 2) they have a viable retirement strategy.

        The issue

    • by sit1963nz ( 934837 ) on Wednesday October 09, 2019 @05:04PM (#59289922)
      The wealthy did it. By the time they took more and more of the income (not profits) for themselves there was nothing left to give the workers.
  • Awfully nice of him to volunteer other people's money.

    Look, it's simple. If one can't perform a function better than a machine, find another function to perform. Robots handle repetitive (often unskilled) tasks quickly, cheaply, and reliably. They are unitaskers. They do one thing. They do it extremely well, the same way, every time. As a human, you are pretty darn adaptable, or at least capable of being so.

    • So much fun when sexbots put hookers out of work.

      • "They made us too smart, too quick and too many."

        When a viable sex-bot can affordably serve as a maid and butler-ette bot, human population will probably begin to decline pretty rapidly.

      • by mysidia ( 191772 )

        The tragedy of this scenario was very nicely detailed in the public service announcement from the Futurama series: I Dated a Robot [theinfosphere.org]

    • by rsilvergun ( 571051 ) on Wednesday October 09, 2019 @05:36PM (#59290052)
      We're asking for the rich and powerful to give up some of their enormous largess. We're obviously not asking for it from the middle class (what's left of it) or the poor. Blood from a stone and all that rot.

      As for it being "their" money, well, did they build the robots? Write the software that makes them tick? How about invent the products they make? How about the roads that drive their goods to market? Or did they educate the people buying their goods? Did they do anything besides get handed a shitload of money from Daddy or from investors that got it from Daddy? No?

      If you don't like paying your dues in a club get the frak out of the club. Civilization's a pretty nice club though.
      • I agree with you, but if you ask them, they will indeed claim they did everything you wrote. Clearly they are the masters of the universe and therefore directed us commoners to do all those things, otherwise we would be living in huts without the masters total awesomeness to see us to where we are today.

      • by LubosD ( 909058 )
        They didn't build the robots or write the software, but they paid agreed money for that.

        If you build me a house and I pay you for it, should you have any rights to it?

  • Economists? (Score:3, Insightful)

    by Anonymous Coward on Wednesday October 09, 2019 @03:52PM (#59289602)
    Economists may blame robots but I blame the board rooms...
  • by TigerPlish ( 174064 ) on Wednesday October 09, 2019 @04:00PM (#59289642)

    Explain why American wages have been flat since 1973.

    Not sure I understand why. In fact I'm convinced we've been robbed of half a century of real wage increases..

    • by bluefoxlucid ( 723572 ) on Wednesday October 09, 2019 @04:29PM (#59289792) Homepage Journal

      Explain why American wages have been flat since 1973.

      Minimum wage.

      All wages are based on minimum wage. You don't have the power to negotiate $15/hr; you have the power to negotiate above minimum wage. If minimum wage is $20/hr, you're going to get like... $30. It's $7, so you get $15.

      You might notice that 15 is more than 2*7, but 30 is less than 2*20.

      That's because of sag: mean wages and median household incomes both fall when minimum wage falls; they fall more slowly. That means when minimum wage falls compared to per-capita income, mean wage is a larger multiple of minimum wage, but a smaller multiple of per-capita income. Like so [twitter.com].

      You can look at indexing minimum wage to inflation versus to per-capita income [twitter.com] to see the dramatic difference. You can also look at the historical level and the level in other countries [twitter.com].

      You might notice the actual minimum wage has been in line with inflation, or a cost-of-living adjustment. That means "able to buy the same amount, not more, not less".

      Why have wages been in line with inflation, not able to buy more, since 1973?

    • They haven't been, but it's not stopping people with an agenda citing that refuted, completely bullshit study.
    • Explain why American wages have been flat since 1973.

      Not sure I understand why. In fact I'm convinced we've been robbed of half a century of real wage increases..

      No one has "robbed" you of anything. The "golden age" of the American worker from post WW II through the end of Vietnam was an illusion propped up by government spending and policy, a prop that couldn't last very long. In the 1950's, 50% of the federal budget went to the Pentagon. All those bombers, ships, and cannons kept industrial production at full peak along with the government stimulated boom in automobiles, refrigerators, TV's etc, almost all of which were produced in the United States because the re

  • There is plenty of work which is not automated or easy to automate.
    In fact in the Western world, high chances are if a robot could do the task, a human isn't working on it.
    The reason wages have stagnated in the West IMHO is due to two things. The fall from grace of labor unions, and globalization.
    Most decent paying jobs most people could do migrated elsewhere and the decent paying jobs which remain are a tiny sliver of that not enough for most people.
    They require skills most people do not have, and availabl

    • Re:Bollocks (Score:4, Interesting)

      by CrimsonAvenger ( 580665 ) on Wednesday October 09, 2019 @04:35PM (#59289820)

      Is it a coincidence wages have stagnated ever since the 1970s when there was an oil price crunch? I don't think so. There is a proven link, whereby people with less transportation access have lower paying jobs. Just think about it. If fuel prices increase that makes it harder for you to work by commuting longer distances.

      Yes, it's a coincidence.

      It should be noted that gasoline prices today, adjusted for inflation, are about what they were in 1970.

      It should also be noted that inflation has averaged less than 4% per year since 1970.

      And then there's the fact that cars are, if anything, MORE common than back in 1970. Back then, middle class meant owning a car. Now it generally means owning two cars. Or one car per driver by the time the kids are teenagers....

  • Government consumes a good chunk of productivity increases, rather than the benefits of more work per worker filtering down, by tying borrowing to GDP, thus incurring new debt whose annual interest payments become functionally permanent.

    Workers do more work per hour. Instead of getting the benefits of more of the extra stuff produced, or more money, government spends it.

    • by hey! ( 33014 ) on Wednesday October 09, 2019 @04:21PM (#59289746) Homepage Journal

      If so then that's local taxation, because federal tax receipts as a percent of GDP haven't changed significantly since the 1950s. It cruises around 17% spiking up or down as the economy swings down or up, but generally within 15-20%.

      • In the absence of a balanced budget, government spending can easily exceed tax receipts. The federal budget hasn't been balanced for quite some time.

        • by hey! ( 33014 )

          That happens with businesses as well. Businesses like Ford or GE don't "balance" their budgets in the sense that people who want a federal balanced budget want the government to do it. They, like the government, issue bonds that they have to repay.

          The question is, what do you issue the bonds for? It makes perfect sense to "deficit spend" for things like highways and bridges. If you did government accounting the way you did business accounting, you'd have an offsetting asset for the debt liability. It's

  • Comment removed based on user account deletion
    • AI/Robotics is inherently a deflationary force. Why is any of that news?

      Plus, modern automation is different from the industrialization of the past in that instead of being used to make human workers more productive, it's designed to completely eliminate human workers as completely as possible, for maximum cost savings.

      Past work technologies were about making you more productive. NEW automation is about getting rid of you.

      • Comment removed based on user account deletion
        • We might wipe out a significant portion of people if a plague ends up running rampant. It's definitely a concern.

      • It doesn't matter. The net effect is the same. Labor that was tied up in some activity has been freed to to something else. Are you going to bemoan the loss of telephone switch operators? Of course not. But we'd have fewer people doing research into curing cancer, developing more fuel efficient vehicles, etc. if we needed to devote human labor to those jobs that we've since automated out of existence.
  • You could make a chart showing union membership dropping as wage stagnation increases... must be unrelated.

  • This has nothing to do with robots unless, of course, you're referring to the mind-numb robots who have no clue how much of their income goes to pay rent on every aspect of their life. You pay a fee every month for things whether you use them or not. Every year, there are more and more rent-seekers around and that rent never goes down. When you start looking at your bills in detail instead of just writing them a check or worse using auto-pay, you realize that you're getting boned all the damn time.

  • by Ryzilynt ( 3492885 ) on Wednesday October 09, 2019 @04:21PM (#59289750)

    OK then it isn't the robots.

    It's the same thing it's been for the last 40 years : Greed.

    • It's almost as if we are taught about:

      Virtue and sin

      Truth and lies

      Good and evil

      Only to grow up and think it was all just a fucking fairy tale.

      Evil flourishes when good men are lazy and stupid.

      I'm not saying that evil/corruption doesn't find its way into all men and all political parties to some degree, very few if any are without fault.

      But what I do not understand it how people can be educated and not understand that democrats are by in large for the people ( again not without fault). And republicans are fo

    • You say this like it's a mutually exclusive thing. Sure, it's greed. Greed enabled by robots...
    • by LubosD ( 909058 )
      I don't know why you call it greed. As an employee, you want to have more money too. How's that any different?
  • Robots? I thought it was violent videos games? My bad.
  • Do we want more production, or do we want more scarcity? Of course to keep *your* job you need scarcity. In fact most people can only make money by actively creating scarcity either through the government via legislative action or buy purchasing and monopolizing resources. We need to encourage production not scarcity and then work on the distribution aspect. A job is a form of welfare when that job could have been done by a robot. The only reason the robot isnt doing the job is if the human forces the prod

  • oligarchs (Score:5, Interesting)

    by sdinfoserv ( 1793266 ) on Wednesday October 09, 2019 @04:46PM (#59289854)
    No, not robots... Starting in the 1980's (as the report points out) is when wages began to stagnate. That corresponds to Reaganomics, aka trickeldown economics, aka voodoo economics. Reagan slashed the top earners tier from 70% to 28% tax rates. The resulting deficit forced Reagan to raise taxes on the middle class 11 times in his 8 year presidency. This began the rich taking from everyone else, till today where we have huge income inequity, crumbling infrastructure, underfunded education, atrocious health care, and corporate oligarchs who run rampant gorging themselves on public funds.
    The trend continues today with Trump giving a $1.3T tax break to the rich, increasing the deficit by that much (what happened to the GOP being balanced budget hawks? ya) while corporations use the tax breaks to buy back $.9T in stocks, artificially inflating stock price and enriching ownership without increases in production or capital investment.
    Robots?!?... nonsense.
    • Re:oligarchs (Score:4, Insightful)

      by RightSaidFred99 ( 874576 ) on Wednesday October 09, 2019 @06:07PM (#59290168)

      BS. It started with globalization. Safe, secure, reliable transportation and shipping. Global banking. The Internet. All that stuff. You can't expect the first world to grow at a crazy rate forever while the rest of the world stagnates. Their standard of living has been rising greatly, and ours has been growing more slowly relative to what it used to.

      But I agree we need a rebalancing, tax rates on the upper 10% or so of the income spectrum need to go up, and tax rates on the upper 1% more so. Not the commie socialist 99% nonsense, but a nice little increase. And we need to cut back military spending by about 25% too.

    • Balanced Budgets are only a thing when Dems are a majority, and they are important because the target is ALWAYS social programs, never military spending, or ever corporate welfare.....
  • They spelled "business owners" in a really strange way.
  • I blame the C suite, Ivy League Schools, and MBAs.

    Thankfully tariffs are putting the boot right up their rear ends.

    Hate him all you want, but the fact that the current president made it expensive to do business in a certain place that rapes the earth, manipulates their currency, rates their citizens on arbitrary Orwellian metrics, and wants to racially subjugate everybody that isn't them is a good thing.

    • Hate him all you want, but the fact that the current president made it expensive to do business in a certain place that rapes the earth, manipulates their currency, rates their citizens on arbitrary Orwellian metrics, and wants to racially subjugate everybody that isn't them is a good thing.

      You really set that one up for the inevitable "Where, the US tee hee" jokes...

    • Meanwhile, US farmers are going out of business because China is retaliating by not buying US soybeans and other crops. So much winning.
  • We need more unions!!

  • uuhhhhhh (Score:5, Insightful)

    by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Wednesday October 09, 2019 @06:51PM (#59290336) Homepage Journal

    "We should just give Americans a raise," he wrote.

    Which increases the value of automation.

    Here's a counterproposal: tax corporate incomes, not profits. Spend the proceeds on UBI. If they can't make a profit while being taxed on income, they should let someone with a better idea take over.

    Or just print the money, with UBI pegged to inflation.

    But frankly, taxing corporate incomes is going to be the only reasonable way forwards when all the "workers" are robots or software agents, and not paying income taxes. Taxing robots or software would be dumb, because you'd have to tie that to their productivity somehow and managing that would be a nightmare.

    • by smugfunt ( 8972 )

      UBI is inflationary in itself. If you peg it to inflation you create a positive feedback loop.

      • UBI is inflationary in itself. If you peg it to inflation you create a positive feedback loop.

        That's fine, if it's not the only place you get the money. Steady inflation discourages cash hoarding, which is another way of saying that it encourages investment. It effectively taxes anyone holding US dollars anywhere in the world. For that matter, it also taxes US dollars which have been lost or destroyed. It's only a problem if it happens unpredictably, or so fast that it's inconvenient for others who would otherwise use it as a medium of exchange. So that's a reason not to get all of the money by prin

        • by LubosD ( 909058 )
          Inflation destroys the savings of the middle class. Your hate for the rich will take a significant toll on the middle class.
    • by LubosD ( 909058 )

      Here's a counterproposal: tax corporate incomes, not profits.

      This is insane. There are companies glad to be making a rather small margin by selling a lot, and then there are companies making a bigger margin selling a few. Why should the former company pay more on taxes? Do you have any experience at all running a business?

      when all the "workers" are robots or software agents

      That's never happening. You'll always need someone servicing the robots, checking them, setting them up, developing them. Yes, people

  • Google Andrew Yang. UBI NOW!

  • And, CEO's pay is out of range vs employees.
  • Wages have been stagnant for a loooong time [forbes.com], so this is old news. Until the early 1970's, wages and productivity grew in lock-step with each other, but then they started to diverge. Productivity kept rising ever upward but wage growth slowed and has been largely flat. For the last eleven years, I've been an advocate of having multiple streams of income as way to (A) Not be 100% financially dependent on one's job and (B) Overcome wage stagnation. My job's annual wage increase was usually 3%, which meant I wa
  • "We should just give Americans a raise," he wrote.

    Oh, is that all ...

    You do know that money is just a medium of exchange, right? If you create more money, you've created ... more money. Not more goods and services.

    When more money chases the same goods and services, they cost more. It's math.

  • Economists should blame globalism. The entire manufacturing capacity of the United States was moved to China over the past 30 years. This created downward pricing pressure on skilled labor and hollowed out the middle class. Look no further than Bubba Clinton, Dubya and Obama to understand why "worker pay is stagnant". And I'm not sure they're "robots".

  • I mean it's a bit racist to call them robots but no, the cause of wage stagnation here is the mass importation of hundreds of thousands of workers a year.

    Drives up housing costs, rent prices and makes public transit terrible.

    Great for big business with more customers and employers with more options though!

  • by Tom ( 822 ) on Thursday October 10, 2019 @05:31AM (#59291484) Homepage Journal

    Researchers with the Federal Reserve Bank of San Francisco have identified a culprit: robots.

    Right. Because robots make the salary decisions in HR. Because robots tell the CEO that his HR costs are too high. Because robots send the consultants that always manage to identify job-cutting and saving on salaries as solutions, no matter what the question was.

    Because we still haven't figured out how to build a society based on automation. All the profits from it go to the capitalists, not the people. Marx would have a field day. Omg, I said the evil words, come trolls, blast on me. But fact is: If you think that through, society is not sustainable. If every job has been automated, nobody will earn anything anymore. What is your proposal for running a society that way?

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