Robot Macroeconomics: What can theory and economic history teach us?

I wonder if we're talking past each other. Perhaps robots aren't the top reason for the apparent worldwide decline in labor participation (http://data.worldbank.org/indicator/SL.TLF.CACT.ZS ). But robots have brought economic dislocation, especially in the manufacturing sector. The worry has been out for a long time on whether displaced workers can find other gainful employment in reasonable time (http://www.bls.gov/opub/mlr/1982/09/art2full.pdf ). Note this is not about getting merely any job, but a job that can bring a satisfying life. As the automation has grown more capable, so has this concern (https://hbr.org/2014/12/what-happens-to-society-when-robots-... ).

Consider the full quote regarding the "neither employed nor actively looking for work"[1]: It critiques the official unemployment rate as shrouding a dysfunctional employment scene. Gallup says: "The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a big lie."

The usnews article also cites other stats on wage gains, shrinking middle class, growing low-income, etc., all to illustrate its main point: "The Pew study considers a widening wealth gap to be driving the wage growth disparity, as more and more workers find themselves at the extremes of the income spectrum. And this gap is generated in part by the unavailability of what Gallup considers to be good jobs."

This pressure for "good jobs" has brought movements such as raising the minimum wage or implementing universal basic income. Invariably this leads to questions on whether the wages for low-skill jobs should ever exceed their apparent economic worth in the name of a "living wage". From there inevitably robots are brought into the picture (limited, gimmicky, or otherwise), if for no other reason than to suggest that low-skill workers may price themselves out of a job.

Putting it all together - robots on top of widening wealth gap on top of shrinking middle class... - well people worry, you know?

==== [1] The full quote is: Gallup also is among a host of organizations and individuals to criticize some of the government's statistical methodologies in recent years. The national unemployment rate of 5 percent, for example, doesn't keep track of the more than 94 million Americans who are neither employed nor actively looking for work. And while at least some of those not counted in the labor force are either in school or retired, there's also a sizable portion that simply hasn't actively looked for a job in the last four weeks. People who give up looking for employment altogether aren't actually counted as unemployed, even though they may have been without a job longer and in greater need than anyone who's regularly sending resumes out.

Can you actually make a car? How many people are involved in making a Honda Civic vs Ford Model T?

That stopped years ago. Ask any auto worker.

There's no economic reason that increased productivity should lead to an increase in wages. The benefits of increased productivity accrue to capital, not labor. What produced the increase in wages with productivity was labor activism, and fear of government intervention.

It's hard to imagine now, but there was a time when American companies were seriously afraid of what workers could do, both through unions and politics. Communism was considered a serious competitor to capitalism from about 1930 to 1980. That's what kept wages rising.

Once Ronald Reagan successfully made the case for unbridled capitalism, that ended. Now the US has "just in time" workers, few unions in the private sector, and weak worker protections. Competition between employees keeps wages down.