How does automation affect unemployment rates?

Answer 1

No. Automation does not increase unemployment. Automation actually increases the quantity and quality of employment.

Frederick Winslow Taylor answered this question in 1911 in his book The Principles of Scientific Management.

"The cheapening of any article in common use almost immediately results in a largely increased demand for that article. The introduction of machinery resulted in making shoes at a fraction of their former labor cost, the demand for shoes has so increased that there are relatively more men working in the shoe industry now than ever before."

The same pattern is repeated again and again in every industry and every continent for the past 100 years. For every low-paying, menial jobs that automation eliminates, it creates one or more higher paying, less menial jobs.

See page 16 of Taylor's book in the Related Link below.

Answer 2

Automation can lead to job displacement in certain industries where machines or software perform tasks previously done by humans. This can contribute to short-term unemployment as workers adapt to changing job markets. However, in the long run, automation can also create new job opportunities in other industries and sectors as new technology creates new demands for a skilled workforce.

Answer 3

Automation can be viewed as both a job creator as well as a job killer. It is a job creator by making it economically feasible to start a new business to manufacture a product that without automation would be far too expensive to produce. There are no factories that exist with zero workers. This is a job creator. Consumer electronics is a good example. Even though there is still some manual assembly, without automation a smart phone might cost more than a thousand dollars and we'd all be lined up at phone booths asking for directions to our kids away games. Automation turns a luxury into a commodity and allows that same cycle to repeat.

On the other hand, when automation is introduced into an existing process there is usually a loss of some jobs over time, but it is somewhat gradual and starts with the reallocation of manual workers. The best of the manual workers get training in a related, more productive role. However, without the introduction of automation, competing companies that do have automation can price their products more competitively or be more profitable and entire industries are lost - think of the US steel industry loss of jobs to newer, automated, foreign mills.

Automation is the way to increase productivity, reduce the cost of goods, gain a competitive edge and enable the cost effective manufacture of new products.