Who stole your work robot or globalization

2022-07-24
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Who stole your job: robots or globalization

Guide: sandbu: in the face of the irreversible loss of manufacturing jobs, should robots or trade be blamed? What should we blame for both

in the first part of these mini series, I investigated how today's robots, automation and other productivity enhancing technologies affect the core industries of the economy and some more exotic science fiction examples. In the second part, I examined the strange combination of breathless innovation and stagnant labor productivity in the Solow paradox (but it's not so strange when you realize that there isn't so much investment in new technologies)

now, we focus on the greatest political impact of this. Who stole the job is it a robot or a foreigner? Or, less tendentiously, is the declining number of manufacturing jobs in rich countries caused by trade liberalization or automation and other technological changes to improve productivity

we mainly discuss manufacturing employment. What is special about the United States is that since the beginning of the 21st century, the overall employment rate (all jobs taken together) has been declining for a longer time than the male employment rate. As a large number of documents recorded by Jason Furman and his colleagues show, the serious manufacturing jobs that the United States is facing a more common problem have not only disappeared, but also not been replaced

so, is it robot or trade that is responsible for the transparency of some conductive materials? A simple and generally correct answer is: both are strange. But now there is another problem. This group includes the relative importance of direct metal laser sintering (DMLS) and selective laser melting (SLM) technologies, as well as where they are guilty

for decades, the manufacturing industry in all industrialized countries has been downsizing. This process began before the beginning of globalization in the 1990s. The trade balance obviously has nothing to do with this problem: Germany, which has always been in trade surplus, and the United States, which has always been in trade deficit, have much more similarities than differences in the change of employment structure

however, the overall trade growth brought about by regional and Global trade liberalization in the 30 years before the global financial crisis will change the employment and production structure of open economies. In fact, this is part of the significance of reducing trade barriers. The standard theory predicts that with the further opening of trade, countries will focus more on maximizing the use of their signals, and then the processor will handle the production of the relative endowments in labor, skills, capital and natural resources

recent studies by Adrian wood have measured the extent to which this happens. As shown in the following table (please refer to relevant papers for more details), the share of manufacturing in global production and employment has declined significantly in the 30 years after 1985. But different regions have undergone quite different changes. In particular, in most areas where land is scarce (which, according to theory, are particularly inclined to specialize in manufacturing), the proportion of manufacturing in the economy has expanded, while in all areas where land is abundant, the proportion of manufacturing in the economy has shrunk

wood believes that this shows that the rapid changes in manufacturing employment can be attributed to economic globalization. But the truth is not that simple. See which regions have seen the greatest changes in the share of manufacturing employment. In rich countries (OECD member countries), the share of manufacturing employment in land rich economies and land scarce economies decreased by the same amount. The increasing share of manufacturing in the output of land scarce economies, but at the same time, the loss of manufacturing employment, is certainly the impact of automation and technology. At the same time, the other two regions with great structural changes are the former Soviet Union and China. The former developed too fast and inefficient in 1985, and was overwhelmed by its own weight when the economy was liberalized. The liberalization and trade integration of the latter obviously promoted industrial reform

then, all this points to the process from the pre industrial employment structure to the industrial employment structure in many poor countries (but this process has stalled in some countries, especially in Africa), as well as the process from the industrial employment structure to the service-based employment structure in all rich countries. There is no doubt that the transformation or failure of poor countries has much to do with their ability to enter the world trading system. The transformation of rich countries looks more like the inevitable result of the continuous growth of manufacturing productivity, which is similar to the previous situation in agriculture

on the contrary, there is direct evidence to support the argument that automation causes manufacturing unemployment. New research by Daron Acemoglu and Pascual Restrepo attempts to measure the impact of increased use of industrial robots on employment (and wage levels) in the United States. In an interview with asimoglu on the research findings, the number of manufacturing unemployment caused by robots from 1990 to 2007 was 670000

what conclusions can we draw? First, both trade and automation have played a role. However, the second and more important point is that the two cannot be completely separated. Productivity growth driven by automation and the consequent loss of employment may be an inevitable part of economic change and accelerated by trade liberalization. Rich economies with highly skilled labor have the ability to cope with trade expansion by specialized production of higher value-added products. In the field of higher value-added products, automation can best improve productivity. For example, with the success of the U.S. automobile industry so far, it has produced more cars than ever before, and exported complete vehicles to China

Thirdly, although trade has caused the disappearance of some employment in the past, protectionist trade policies may not be of great benefit. Because even if trade has helped automation in this process, restricting trade will not reverse automation. At best, it may delay further automation, but it comes at a price. In particular, it will make it more difficult to export manufacturing products to global markets using the most cost-effective technologies. Trade skeptics trying to protect manufacturing employment should pay attention to the difference between protectionism and mercantilism. The latter aims to expand exports, while the former is likely to hinder exports as well due to import restrictions

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