Fact of the Week: Automation Is Not the Culprit Behind Sluggish Employment Growth in the Years Following the Great Recession

John Wu February 15, 2017
February 15, 2017

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Many people assume automation and technological change eliminate middle-class jobs. As evidence, some pundits point to the fact that U.S. employment grew at a sluggish rate of just under 1 percent in the years immediately after the Great Recession. They claim that, to stay competitive, U.S. businesses used automation to replace many of the middle-class workers they let go from routine positions during the recession, so they did not need to re-hire as many people during the recovery.

But a recent discussion paper from the Institute of Labor Economics in Germany debunks this claim. The authors studied employment patterns in the years immediately following recessions in the United States and 16 other developed countries. They focused in particular on changes in employment and rates of information technology adoption in industries where routine tasks are common, and they found that technological advances implemented during and after a recession did not impact job growth as the economy recovered, including in middle-class jobs. Since other developed countries invest in technologies similar to the U.S., the authors suggest that factors other than technology change were at fault for the sluggish post-Great Recession job recovery.

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Fact of the Week: Automation Is Not the Culprit Behind Sluggish Employment Growth in the Years Following the Great Recession