Free exchange

Is the pandemic accelerating automation? Don’t be so sure

The pessimists could, of course, eventually be proven right

AS ECONOMIES REOPEN, labour shortages are still worsening. In America the number of unfilled vacancies, at 9.3m, has never been so high. Job postings in Canada are 20% above pre-pandemic levels. Even in Europe, slower out of the post-lockdown gates, a growing number of employers complain of how hard it is to find staff. Debates over labour shortages have focused on welfare policy and economic disruption. But the phenomenon has a deeper lesson. It tells us something about the myths of automation.

Economists have confidently asserted that a wave of job-killing robots was sweeping the labour market. The IMF says the pandemic is “hastening a shift in employment away from sectors more vulnerable to automation”. In a recent co-written article Joseph Stiglitz, a Nobel prizewinner, says the extra costs of covid-19 are “accelerating the development and adoption of new technologies to automate human work.” In congressional testimony last year Daron Acemoglu of the Massachusetts Institute of Technology suggested that more firms were “substituting machines for workers”. But can pandemic-induced automation really be creating an army of surplus workers if employers are complaining of a deficit?

The economists had good reason to believe that job-killing automation would surge. Recessions often lead firms to adopt more robots, in part because labour gets more expensive as…