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Worker Pay is Stagnant — Economists Blame Robots

October 9, 2019 Leave a Comment

American workers are more productive than ever, but their paychecks haven’t kept pace. Researchers with the Federal Reserve Bank of San Francisco have a culprit: robots. CBS News reports:

Economists Sylvain Leduc and Zheng Liu theorize that automation is sapping employees’ bargaining power, making it harder for them to demand higher wages. Companies across a range of industries increasingly have the option of using technology to handle work formerly done by people, giving employers the upper hand in setting pay. The result — a widening gulf between wages and productivity.

The research may bolster proposals for universal basic income, which is a government cash stipend that typically doesn’t come with requirements. Andrew Yang, a Democratic presidential candidate who’s running on a platform of giving every American adult $1,000 per month in basic income, tweeted about the economic findings, writing that automation is “making it hard for workers to ask for more.”

“We should just give Americans a raise,” he wrote. To be sure, automation is leading to massive changes in work that are hitting some industries and workers especially hard, such as lower and middle-skilled workers. For instance, the ranks of office assistants and clerical workers is expected to shrink by 5% through 2026 as offices shift tasks to artificial intelligence and other software, according to the Bureau of Labor Statistics. This could result in a loss of 200,000 jobs.

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