Monday, July 31, 2017

RoR

Daron Acemoglu of MIT and Pascual Restrepo of Boston U did a regression analysis attempting to isolate the effects of robots on wages and employment in a variety of work environments between 1990 and 2007.  The bottom line:

" According to our estimates, one more robot per thousand workers reduces the employment to population ratio by about 0.18-0.34 percentage points and wages by 0.25-0.5 percent."

That's ten years ago and you ain't seen nothin' yet.

My guess is that we won't see huge effects until the next recession, and then I expect catastrophe.

These phenomena suggest that Democrats may be barking up an inappropriate tree with plans to increase the minimum wage.  WB said that Warren Buffett prefers an increase in the earned income credit.  That and related ideas are probably preferable.