How Will Automation Affect Unemployment?

Robot, automation, unemployment

This question is starting to haunt us all. AI (Artificial Intelligence) is starting to take over our assembly plants, and some people are predicting that unemployment could get as high as 25% in our lifetime.

But is that true, or a whole lot of fearmongering? Let’s look at the facts:

The unemployment rate in 1890, before the first car assembly line started, was a measly 3.97%[1]. But then, Ransome Eli Olds started mass-producing its Dash Oldsmobile in 1901. That was the beginning of an era.

Then Henry Ford started the first car assembly line in 1913, and things went downhill from there.

Or did they?

From what I can tell of the figures, America actually saw some of the lowest unemployment figures in the history of our country after technology started becoming a part of our daily lives.

In fact, according to unemployment figures I found in The Balance[2], unemployment rates have not been because of technological advances, but because of recessions.

Consider this: The highest unemployment rate we have seen in the US in the last 100 years was in 1982 (that was the year the Intel 286 was introduced for my fellow techies). That was also the year personal computers started hitting the market (computers were mostly used for business and technology before that). Unemployment dropped to 6.6% within four years while, at the same time, the number of personal computers being sold doubled.

And, between 1982 and 2018, unemployment has not gone over 10%. But the number of computers being sold just in the US is currently over 1000 times more per year than it was in 1982.

But the US unemployment rate of 2018, with somewhere in the range of 2 billion computers in the world, is 4.1%, 2 tenths of a percent higher than 1890, when there were no computers, no assembly lines, no automation all.

Now, think of this: The population in the United States in 1890 was just under 63 million people. In 2017, the US population was just under 326 million. Think of all the automation we have seen in the last 100 years, then combine that with a population of over 5 times as many people. But the unemployment rate is almost the same as it was in 1890!

Still worried about how automation will affect us?


[1] J.R. VERNON, University of Florida Gainemille, Florida Unemployment Rates in Postbellum America. https://delong.typepad.com/1-s2.0-0164070494900086-main.pdf.

[2] https://www.thebalance.com/unemployment-rate-by-year-3305506

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