Apr 11, 2018

Report: Robots steadily erode wages

Guided robots in Yiwu, China. Photo: Zhang Cheng / Xinhua / Getty

Some of the more optimistic forecasts on robots forecast that it's not jobs that will vanish, but tasks. That is, about half of the things that make up current occupations are automatable, according to a recent report by McKinsey, however that just means the workers will retrain and transform those jobs into something else.

But, but, but: According to a new report by Barclays called Robots at the Gate, those little tweaks to jobs are precisely what makes automation so pernicious: Wages, says report author Ajay Rajadhyaksha, end up suppressed because automation happens in steps, steadily eroding the value of a job as it assumes control of the tasks required to do it.

The bottom line: This is the case for the best new technologies, sometimes continuing even decades after their release, said Rajadhyaksha, who heads Barclays' macro research team. "Technology frequently ends up lowering the skill-set needed to do a job," he writes, "in turn expanding the pool of potential workers, which then acts as a drag on wage growth."

  • When a new technology is released, Rajadhyaksha told me, small things that may not seem important end up being primary to their impact. As an example, he cites the introduction of rear cameras and power steering to semi-trucks. Since the trucks were now easier to navigate and required less strength to steer, driver wages fell. "You see this over and over," he said.

Go deeper

The race to catch Nike's Vaporfly shoe before the 2020 Olympics

Illustration: Aïda Amer/Axios

Four months ago, on the very same weekend, Eliud Kipchoge became the first human to run a marathon in under two hours, and fellow Kenyan Brigid Kosgei shattered the women's marathon record.

Why it matters: Kipchoge and Kosgei were both wearing Nike's controversial Vaporfly sneakers, which many believed would be banned because of the performance boost provided by a carbon-fiber plate in the midsole that acted as a spring and saved the runner energy.

Go deeperArrow44 mins ago - Sports

Reassessing the global impact of the coronavirus

Illustration: Aïda Amer/Axios

Economists are rethinking projections about the broader economic consequences of the coronavirus outbreak after a surge of diagnoses and deaths outside Asia and an announcement from a top CDC official that Americans should be prepared for the virus to spread here.

What's happening: The coronavirus quickly went from an also-ran concern to the most talked-about issue at the National Association for Business Economics policy conference in Washington, D.C.

Tech can't remember what to do in a down market

Illustration: Rebecca Zisser/Axios

Wall Street's two-day-old coronavirus crash is a wakeup alarm for Silicon Valley.

The big picture: Tech has been booming for so long the industry barely remembers what a down market feels like — and most companies are ill-prepared for one.