Robots won’t kill the workforce. They’ll save the global economy.

[Note: This item comes from reader Randall Head. DLH]

Robots won’t kill the workforce. They’ll save the global economy.
Across the world, the labor pool isn’t growing fast enough to support our needs.
By Ruchir Sharma
Dec 2 2016
https://www.washingtonpost.com/posteverything/wp/2016/12/02/robots-wont-kill-the-workforce-theyll-save-the-global-economy/

The United Nations forecasts that the global population will rise from 7.3 billion to nearly 10 billion by 2050, a big number that often prompts warnings about overpopulation. Some have come from neo-Malthusians, who fear that population growth will outstrip the food supply, leaving a hungry planet. Others appear in the tirades of anti-immigrant populists, invoking the specter of a rising tide of humanity as cause to slam borders shut. Still others inspire a chorus of neo-Luddites, who fear that the “rise of the robots” is rapidly making human workers obsolete, a threat all the more alarming if the human population is exploding.

Before long, though, we’re more likely to treasure robots than to revile them. They may be the one thing that can protect the global economy from the dangers that lie ahead.

An increase of 2.5 billion people may sound catastrophic. But what matters for economic growth is not the number of people but the rate of population growth. Since its peak in the 1960s, that rate has slumped by almost half to just 1 percent, and the U.N. forecast assumes that this slowdown will continue. Women are having fewer children, so fewer people are entering the working ages between 15 and 64, and labor-force growth is poised to decline from Chile to China. At the same time, owing to rapid advances in health care and medicine, people are living longer , and most of the coming global population increase will be among the retirement crowd. These trends are toxic for economic growth, and boosting the number of robots may be the easiest answer for many countries.

One simple way to estimate how fast an economy can grow is by adding working-age population growth and productivity growth: If the number of workers and output per worker are both increasing by 1 percent a year, then economic output should rise by roughly 2 percent. Over the past decade, both sides of that equation have declined dramatically across the world. In the United States, productivity growth has fallen by almost half from its postwar average, but growth in the labor force has slid even faster, dropping by two-thirds to an average pace of 0.5 percent, according to calculations performed for my book. Though many explanations have been offered for the slow recovery from the global financial crisis of 2008, the clearest answer may be aging populations. Something will have to fill the void left by, say, retiring farmers, and particularly at a time of rising hostility to immigrants, it is likely to be farmbots.

It may not be long before economists are worrying about a global shortage of robots. In many industrial countries, from Germany to Japan to South Korea, growth in the working-age population has already peaked, acting as a drag on the economy. Widely overlooked, however, is the fact that the population-growth slowdown is unfolding even faster in the emerging world, according to my research.

Consider the turning point that China hit last year. For the first time since records began in the 1950s, its working-age population growth was negative. As a result, China’s labor force is expected to lose 1 million workers each year for the foreseeable future, and it is also aging rapidly. Studies by Evercore ISI, a research firm, show that the elderly share of the population is rising more than twice as fast as it did in the United States and more than four times faster than in France at similar stages of development. Asked by an alarmed dinner companion about the threat robots posed to jobs in China, Nobel economist Daniel Kahneman responded: “You just don’t get it. In China, the robots are going to come just in time.” No wonder Beijing now offers heavy subsidies to companies involved in industrial automation.

[snip]

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s