Mr. Steve Kroft
60 Minutes
CBS News
New York, NY
Dear Mr. Kroft:
In your segment last night “Are Robots Hurting Job Growth?” you conclude too quickly that today’s stubbornly low rate of employment is the result of automation.
First, it’s not clear that the pace of automation is today faster than it was during some important periods in the past. Are robots in 2013, for example, replacing factory workers faster than motorized farm equipment in 1913 replaced farmhands? Maybe; maybe not. The answer isn’t obvious.
Second, given your recognition that 200-plus years of automation in the past haven’t resulted in any long-term inability of a fast-expanding population of people to find high-paying jobs – and given also the reality that America’s longest and deepest period of unemployment occurred 80 years ago, before the invention of the Internet, the microchip, and even the solid-state transistor – a more plausible, if more mundane, explanation of today’s dreary jobs picture is found in economics and not in technology.
Some economists blame today’s persistently high unemployment on inadequate government spending; others blame it on inadequate growth in the money supply; while others blame it on excessive government regulation and the fear of higher taxes. Whichever of these (or other) economic explanations is most plausible, adherents of each of them can point to the fact that net private domestic investment in the U.S. today is 56 percent lower than it was at its pre-crisis peak (during the first quarter of 2006), and 44 percent lower than it was for 2007, the last full year before the current crisis began.* This continuing sorry state of private investment is far more likely than is automation to be the cause of today’s bleak employment situation.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
* Data are available from the BEA on row six here.
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HT to Tim Townsend for notice of this 60 Minutes segment.
