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Partial automation and the technology-enabled deskilling of routine jobs

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  • Downey, Mitch

Abstract

Evidence shows technology automates middle-wage occupations’ routine tasks. I argue technology only partially automates these, simplifying them so that they can be performed by less-skilled workers. Thus, post-automation costs include technology and low-wage workers to use it. The minimum wage raises these costs, lowering the profitability of automation and slowing the adoption of routine-replacing technologies. I test this claim using new cross-state variation in the minimum wage (induced by state price differences) and new cross-industry variation in the importance of low-skilled labor for technology (measuring using the Current Population Survey Computer Use Supplement and the Dictionary of Occupational Titles). Because low-skilled workers are needed alongside technology, I show that a low minimum wage increases the automation of routine jobs.

Suggested Citation

  • Downey, Mitch, 2021. "Partial automation and the technology-enabled deskilling of routine jobs," Labour Economics, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:labeco:v:69:y:2021:i:c:s0927537121000087
    DOI: 10.1016/j.labeco.2021.101973
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    Cited by:

    1. Arindrajit Dube & Attila S. Lindner, 2024. "Minimum Wages in the 21st Century," NBER Working Papers 32878, National Bureau of Economic Research, Inc.
    2. Bürgisser, Reto, 2023. "Policy Responses to Technological Change in the Workplace," SocArXiv kwxn2_v1, Center for Open Science.
    3. Ramos, Minerva E. & Garza-Rodríguez, Jorge & Gibaja-Romero, Damian E., 2022. "Automation of employment in the presence of industry 4.0: The case of Mexico," Technology in Society, Elsevier, vol. 68(C).
    4. Bürgisser, Reto, 2023. "Policy Responses to Technological Change in the Workplace," SocArXiv kwxn2, Center for Open Science.
    5. Wei, Xiahai & Xu, Jiawei & Cao, Hui, 2024. "Production automation upgrades and the mystery of workers' overwork: Evidence from a manufacturing employer-employee matching survey in China," Journal of Asian Economics, Elsevier, vol. 91(C).
    6. Albinowski, Maciej & Lewandowski, Piotr, 2024. "The impact of ICT and robots on labour market outcomes of demographic groups in Europe," Labour Economics, Elsevier, vol. 87(C).
    7. Wen Zhang & Kee-Hung Lai & Qiguo Gong, 2024. "The future of the labor force: higher cognition and more skills," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-9, December.
    8. Chao Wu & Yu Hua, 2023. "Does Environmental Regulation Have an Employment Dividend? Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-20, April.
    9. Bauer, Kevin & Nofer, Michael & Abdel-Karim, Benjamin M. & Hinz, Oliver, 2022. "The effects of discontinuing machine learning decision support," SAFE Working Paper Series 370, Leibniz Institute for Financial Research SAFE.
    10. Julie M É Garneau & Sara Pérez-Lauzon & Christian Lévesque, 2023. "Digitalisation of work in aerospace manufacturing: expanding union frames and repertoires of action in Belgium, Canada and Denmark," Transfer: European Review of Labour and Research, , vol. 29(1), pages 139-154, February.
    11. Gregory, Terry & Zierahn, Ulrich, 2022. "When the minimum wage really bites hard: The negative spillover effect on high-skilled workers," Journal of Public Economics, Elsevier, vol. 206(C).
    12. Cörvers, Frank & Reinold, Julia & Chakkar, Saena & Bolzonella, Francesco & Ronda, Vera, 2021. "Literature review labour migration," ROA Technical Report 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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    More about this item

    Keywords

    Minimum wage; Technology adoption; Automation; Wage inequality;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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