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Automation Caused More than Half America's Income Inequality Since 1980, Study Claims (scitechdaily.com) 287

A newly published study co-authored by MIT economist Daron Acemoglu "quantifies the extent to which automation has contributed to income inequality in the U.S.," reports SciTechDaily, "simply by replacing workers with technology — whether self-checkout machines, call-center systems, assembly-line technology, or other devices." Over the last four decades, the income gap between more- and less-educated workers has grown significantly; the study finds that automation accounts for more than half of that increase. "This single one variable ... explains 50 to 70 percent of the changes or variation between group inequality from 1980 to about 2016," Acemoglu says....

Acemoglu and Pascual Restrepo, an assistant professor of economics at Boston University, used U.S. Bureau of Economic Analysis statistics on the extent to which human labor was used in 49 industries from 1987 to 2016, as well as data on machinery and software adopted in that time. The scholars also used data they had previously compiled about the adoption of robots in the U.S. from 1993 to 2014. In previous studies, Acemoglu and Restrepo have found that robots have by themselves replaced a substantial number of workers in the U.S., helped some firms dominate their industries, and contributed to inequality.
At the same time, the scholars used U.S. Census Bureau metrics, including its American Community Survey data, to track worker outcomes during this time for roughly 500 demographic subgroups... By examining the links between changes in business practices alongside changes in labor market outcomes, the study can estimate what impact automation has had on workers.

Ultimately, Acemoglu and Restrepo conclude that the effects have been profound. Since 1980, for instance, they estimate that automation has reduced the wages of men without a high school degree by 8.8 percent and women without a high school degree by 2.3 percent, adjusted for inflation.

Thanks to long-time Slashdot reader schwit1 for sharing the article.
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Automation Caused More than Half America's Income Inequality Since 1980, Study Claims

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  • I would have guessed 70-90%.
    • by Luckyo ( 1726890 )

      Indeed. The entire concept behind automation is that "fewer higher skilled people can generate more value than many less/differently skilled people could do before".

      So by definition, this would concentrate wealth among those people that have skills relevant to automating industrial processes. And we have come a long way in automating things in last few decades. half to about three quarters in almost fourty years sounds very low considering just how massive the jump in industrial automation through computeri

      • by Arethan ( 223197 )

        So, you're saying that people that failed to acquire high value job skills don't make as much money as those that did.
        Huh. Weird.

        • by skam240 ( 789197 )

          The problem with just saying "oh well" to that is that a declining middle class is bad news for a democracy as a strong middle class is essential for stability.

          • Automation destroys jobs and creates jobs. I think the key is to help people with the transition: When railways are invented, people need help moving from wagon driving jobs to railway jobs. Of course in that transition, there will be some winners and losers - but I don't see a way to avoid that. I do see the Govts part of this is to provide the assistance people need to make the transition.
        • by ChatHuant ( 801522 ) on Sunday January 22, 2023 @03:20PM (#63230582)

          people that failed to acquire high value job skills don't make as much money as those that did.

          The problem is that the threshold between "low value job skills" and "high value job skills" keeps moving up, as machines, processes and automation improve. Humans are quite adaptable and can work in all kinds of different areas, but they're still biological beings, with some pretty hard built-in limits. Even if training can help a human being to perform close to the top of his potential, this potential is itself limited (see Flowers for Algernon for a poignant illustration). Moreover, different people will have different limits, with their "maximum potentials" probably distributed on a Gauss or similar curve.

          So, as the "high value job skill" threshold keeps moving up, more and more people get left behind. Some of those people could get back above the line by putting in a lot of effort to learn new skills, but some simply won't be able to, because the line is already above their maximum potential so even with training they'll never get in the "high value job skill" group (note that I'm not calling those people stupid; there are lots of other issues, like sickness or age that reduce your maximum capabilities).

          What then? We already have a category of people who are called "unemployable", and more and more people are pushed in this category by increasing automation. Sooner or later most people will be unemployable. What then? Should they starve?

          I think the solution is to break the link between survival and employment. All through history we had people who didn't need to work to survive - the "gentlemen of leisure" class. This is what everybody needs to become - we should all be gentlemen of leisure, and not have to find employment in order to live our lives. Of course, how exactly do we get there is the difficult question.

          • What then? We already have a category of people who are called "unemployable", and more and more people are pushed in this category by increasing automation. Sooner or later most people will be unemployable. What then? Should they starve?

            Picture being held up at gunpoint in a grocery store parking lot over a bag of chips.

        • by mpercy ( 1085347 ) on Monday January 23, 2023 @08:41AM (#63232168)

          “Anybody who can go down 3,000 feet in a mine can sure as hell learn to program as well Anybody who can throw coal into a furnace can learn how to program, for God’s sake!”

          I disagree with Biden's assertion that "Anybody who can throw coal into a furnace can learn how to program", not to mention his callous disregard for his audience (a bunch of coal miners).

          OTOH, the general notion seems like a good answer for anyone who loses their job to automation: learn how to do something else. Better still, learn how to do something else before the job goes away, whether to automation or market forces.

          On the later, some years back there was a cassette tape manufacturing plant near where I lived, and a lot of people worked there. And then Compact Disc rose in market share, and then MP3 players, and then digital streaming. Each year, the plant produced less and less output as demand for cassette tapes disintegrated. When the plant finally shut down, all the interviews with people who were let go included something along the line of "We never thought this would happen." Really? CD's were introduced in 1982, by 1993 CDs outsold cassette tapes. Many vinyl pressers had already gone out of business, driven to the brink of extinction by cassette tapes and CDs, only the analog/audiophile market kept some alive. But you never saw this coming? You had YEARS of notice of it coming, YEARS with which you could have moved on to some other work, but you rode that horse right over the edge of the cliff and complained about it on the way down?

      • Fewer people may be needed in an office, but I've been in plenty of offices where they're allowed to stick around anyway.

        I wonder how much office headcounts have decreased compared to, say, factory headcounts. I'd wager not much.

        And I wonder how much this has to do with recently stagnant per-capita productivity. It seems like some office workers are able to keep their employment when they're not strictly needed, or barely utilized. It seems like other kinds of workers can't manage that arrangement so much.

        • I wonder how much office headcounts have decreased compared to, say, factory headcounts. I'd wager not much.

          Some, though. I've noticed in law that younger lawyers (early middle-age at this point) having learned how to use computers in school, and having been trained to do legal research and writing on them, need fewer assistants than the older ones who write longhand or dictate. Personally, I fell into the transitional period -- I learned how to research in books (which aren't even maintained anymore) because that's how it had been done for many decades, as well as on the computer. And I can't stand trying to

      • Hmm... Nice FP thread, though Slashdot should automate font correction for the fanbois.

        My take is slightly different. It involves leveraging expertise with automation. Now the gigantic corporate cancers can find the best experts and automate their approaches to eliminate most of the plodders. The work gets done in the best and most efficient ways and the plodders become unemployed.

        But these day's I'm seeing more and more things as aspects of the bootstrap problem. Short summary: We make society and then soc

      • Well, they just need to go back into education/training so they can get skilled jobs, right? Who's helping them with that?
    • by sound+vision ( 884283 ) on Sunday January 22, 2023 @01:47PM (#63230318) Journal

      Do you think greed isn't the main driving factor? Typically it's even a factor behind automation. Outside of automation scenarios, there's not much else to blame.

      On a nerd site, people will tend to fixate on the technology. But greed is something humans have always struggled with. The new tools don't eliminate that, they just change the calculus a bit.

      • by ranton ( 36917 )

        Do you think greed isn't the main driving factor?

        Greed isn't the type of factor they would be looking for here. Automation has decreased the value of unskilled labor and increased the value of skilled labor. Then humans get to decide what to do in this situation. Greed gives most of the benefits of this change to those who naturally benefit from it: owners of capital and skilled labor. Altruism redistributes wealth more evenly. You can blame greed and a lack of altruism, or you can blame automation. This article blames automation.

  • CHeckout persons cashiers) used to be highly efficient when I was a lad. They seemed to drop off immensely after 1980. It seems that after that they could not even make change without the assistance of a tabulator machine to tell them what to do. The rise of automation was probably directly related and a compensatory response to the decline of the quaility of the worker and not the othe rway around.

    • My local "Market Basket" supermarket has mostly older cashiers, and a generally better/more efficient checkout experience, compared to the other local supermarket chains. And I -despise- self-checkout as horribly inefficient. So I agree with the first observation in the parent comment. I'm not sure about the conclusion drawn by the parent commenter, but I think it's at least a hypothesis worth checking.

      (I used up my moderator points earlier this morning, so I'm responding rather than moderating :-) :-) )

    • by dvice ( 6309704 )

      > CHeckout persons cashiers) used to be highly efficient when I was a lad.

      That was just an illusion. Cashier might be able to serve even 2 person per minute, but a programmer at Amazon can possibly serve million person per minute and the only upper limit is amount of customers.

    • What do you propose was the cause of the decline? The tabulating machine itself? Lower education was still broadly functional in 1980, higher education was accessible, and all the concrete statistics I've seen (flawed though some may be, like IQ measurements) indicate that intelligence was on the rise.

      I know that, in my own work, I take steps to minimize the chance of errors creeping in. Not because I'm likely to make an error, but so that I can focus more fully on the rest of my job. That seems to be the

  • Even those who used to do the firing are being automated away [imgur.com]. Instead of people it's now a person who presses a button.

  • Nonsense (Score:3, Insightful)

    by Malenfrant ( 781088 ) on Sunday January 22, 2023 @12:58PM (#63230170)
    Automation didn't cause any inequality of any kind, whether income or other types. Capitalism and other Hierarchical systems causes inequality, automation is just one of the mechanisms used to do so.
    • No it's because of the boundary conditions of existence.

      You need to pick causes at a level where they help you to guide policy, a certain level of capitalism and a certain level of socialism are both needed. The human condition doesn't respond too well to "From each according to his ability, to each according to his needs", we're assholes.

      • And again, stop with your assumptions. I made no value judgements and said nothing about whether we should use Capitalist systems or not.Why does explaining how they work get people so riled up?

    • Re:Nonsense (Score:5, Insightful)

      by Geoffrey.landis ( 926948 ) on Sunday January 22, 2023 @01:31PM (#63230260) Homepage

      Automation didn't cause any inequality of any kind, whether income or other types. Capitalism and other Hierarchical systems causes inequality, automation is just one of the mechanisms used to do so.

      Both.

      Automation means that jobs are being done by machines that used to require humans. These have mostly been low-level jobs, so it's competing for wages against the low end of the economic scale.

      In a capitalist economic system, the machines are owned by the capitalist class. So, the rich get the benefit of the automation, and the poor don't.

      • Yes, automation effects the level of inequality. That is a true statement. But 'automation causes inequality' is false. The inequality was already there, caused by the economic system. Automation is merely a mechanism that increases it above the base level but it does not cause it. It's a gearing system not an engine. Automation did not cause any inequality. You could have automation without inequality if you had an economic system that wasn't hierarchical.

        And before you or others start, it is irrelevant to

      • If a worker finds a way to boost productivity do they get rewarded? in today's culture?
        No. You get a thank you and an employee of the month award and none of the money saved goes into your pocket. Then they lay you off years later because you are old and more expensive than your replacement. Forget the money you saved that went into the pocket of management may have been enough to easily fund your salary for your whole life.

        No loyalty; yet they bitch about worker loyalty, non-competes, and push sick BS li

  • They just starve us slowly.

  • Seriously? (Score:5, Insightful)

    by backslashdot ( 95548 ) on Sunday January 22, 2023 @01:25PM (#63230240)

    So far 99% of our robots and automation is good for moving something from A to B repeatedly .. if that's what people are displaced from spending 50% of their awake life doing, it's a good thing. The failure is that we didn't provide them with UBI, the automation aspect is NOT the failure.

    • Precisely this. Automation is a *good* thing. It frees people from drudgery to do more interesting things. In the end isn't that what we're all striving for? Face it, very few people love their jobs so much that they'd choose to do the same thing all day every day if that wasn't the only way to put food on the table. But we have to share the wealth with the people who were displaced by the automation. Money saved by automation shouldn't go exclusively to the bosses, it should go to cover the expenses of the

  • by v1 ( 525388 ) on Sunday January 22, 2023 @01:33PM (#63230268) Homepage Journal

    Automation Caused More than Half America's Income Inequality Since 1980

    The blame is being placed on the tool rather than the mechanic. Lots of employers switching to automation is what caused that.

    Don't blame the potholes for damaging your suspension, blame your city for not doing anything about the potholes. The potholes definitely don't care about your car., and raging against the potholes doesn't fix the problem.

  • Check the difference between top earners and bottom earners since 1980 and you'll notice that the main reason for people getting poorer is people getting richer. And that in turn is simply due to paying the money you don't pay to blue collar workers to C-Levels for ... yeah, I'd love to know what for.

  • by argStyopa ( 232550 ) on Sunday January 22, 2023 @03:01PM (#63230548) Journal

    How many jobs and whole industries have the internet and automation created? Shall we discuss the astonishingly higher standard of living over that time as well?
    Kings and presidents at the start of that span would have idolized smartphones the internet and their abilities, and now we give them away to poor people.

    The fact that some jobs and industries will be deprecated by the advance of time and technology is inevitable. This report implies there is some alternative - there isn't.

    • homeless people have smartphones, manly have cars too.

      Homeless people today do not have a better standard of living than a king 200 years ago. Technology does not make up for a lack of safety, security, shelter or food.

      • Which king had those things? They certainly did not have security. Their healthcare sucked too. No antibiotics, nothing .. state of the art treatment was bloodletting which made things worse.

        • Which king had those things?

          Hm how about every single eligible monarch of the United Kingdom? (i.e. Chas III because he's brand new and doesn't predate the internet or smartphones)

          Ann (died 1714 Age 49)
          George I (died 1727, Age 67)
          George II (died 1760 Age 76)
          George III (died 1820 Age 81)
          George IV (died 1830 Age 67)
          William IV (died 1837 Age 71)
          Victoria (died 1901 Age 81)
          Edward VII (died 1910 Age 68)
          George V (died 1936 Age 70)
          Edward VIII (died 1972 Age 70, abdicated 1936)
          George IV (died 1952 Age 56)
          Elizabeth

  • Isn't the word they're looking for 'innovation' and then it makes sense?

  • by Miles_O'Toole ( 5152533 ) on Sunday January 22, 2023 @06:59PM (#63231084)

    McDonald's USA Employee: $9.00/hour, no benefits. Big Mac: $5.78

    McDonald's Denmark Employee: $22/hour, 6 weeks vacation, 1 year paid maternity leave, life insurance, pension. Big Mac: 30 kr = $4.80

    https://hellosafe.ca/en/blog/big-mac-index [hellosafe.ca]

  • by zkiwi34 ( 974563 ) on Sunday January 22, 2023 @07:49PM (#63231168)
    Way many jobs have been lost and are continuing to vanish because of this alone.
  • We will never face the real problems though, which are:

    1) Too many people.

    2) Too many stupid, people.

    Smalltown America's barstool Bob or baristra Barbara are never going to be "retrained" for any tech job. Period. Full stop. They don't have the mental capacity. Some people don't and never will.

    And soon their jobs will be gone. Being bored, they'll spend their time making more untrainable versions of themselves. As they age, finding themselves poor, powerless and with no prospects, they'll join their local crazy religion or radical political movement because... why not? They've got nothing else. (Sound familiar?)

    Fixing that, problem would require radical methods like sterilizing stupid people or genetically enhancing any children they had for increased intelligence when that becomes possible (and it will). Right now, I don't see Americans having the guts for those kinds of hard choices.

After all is said and done, a hell of a lot more is said than done.

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