Executive Briefings

Robots Are Slashing U.S. Wages, Worsening Pay Inequality

Robots have long been maligned for job-snatching. Now you can add depressing wages and promoting inequality to your list of automation-related grievances.

Industrial robots cut into employment and pay for workers, based on a new analysis of local data stretching from 1990 to 2007. The change had the biggest impact on the lower half of the wage distribution, so it probably worsened America's wage gap. Today's economic research wrap also looks at labor market slack, student loan defaults in times of crisis, and where rates might be headed in coming years.

The Pessimist's' Guide to the Robot Invasion

Industrial robots have had a large and negative effect on U.S. employment and wages in local labor markets, according to  new research by Massachusetts Institute of Technology's Daron Acemoglu and Boston University's Pascual Restrepo.

One additional robot per thousand workers reduces the employment-to-population ratio from 0.18 percentage points to 0.34 percentage points, and slashes wages from 0.25 to 0.5 percent, based on their analysis.

To put that in context, the U.S. saw an increase of about one new industrial robot for every thousand workers between 1993 and 2007, based on the study.

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Industrial robots cut into employment and pay for workers, based on a new analysis of local data stretching from 1990 to 2007. The change had the biggest impact on the lower half of the wage distribution, so it probably worsened America's wage gap. Today's economic research wrap also looks at labor market slack, student loan defaults in times of crisis, and where rates might be headed in coming years.

The Pessimist's' Guide to the Robot Invasion

Industrial robots have had a large and negative effect on U.S. employment and wages in local labor markets, according to  new research by Massachusetts Institute of Technology's Daron Acemoglu and Boston University's Pascual Restrepo.

One additional robot per thousand workers reduces the employment-to-population ratio from 0.18 percentage points to 0.34 percentage points, and slashes wages from 0.25 to 0.5 percent, based on their analysis.

To put that in context, the U.S. saw an increase of about one new industrial robot for every thousand workers between 1993 and 2007, based on the study.

Read Full Article