Does automation always lead to a decline in low-wage jobs?
[...]since the Great Recession, jobs intensive in both routine manual and routine cognitive tasks have been negatively impacted by automation. [...]since low-wage jobs have few skill requirements and the minimum wage acts as a wage floor, individual low-wage workers displaced from low-wage employmen...
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Veröffentlicht in: | Chicago Fed Letter 2019 (413), p.1-4 |
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Hauptverfasser: | , |
Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | [...]since the Great Recession, jobs intensive in both routine manual and routine cognitive tasks have been negatively impacted by automation. [...]since low-wage jobs have few skill requirements and the minimum wage acts as a wage floor, individual low-wage workers displaced from low-wage employment have been able to transition into newly created jobs without much of a wage penalty. The employment decline takes place slowly over multiple years, consistent with capital investment or other sources of labor substitution taking time to implement. [...]we find that the effect of a minimum wage hike dissipates to zero among higher wage occupations. Some evidence suggests that minimum wage hikes cause labor-intensive firms disproportionately to fail because the cost of the hike falls more heavily on these types of firms.4 As production shifts to more capital-intensive incumbent and entrant firms, the tasks associated with their newly expanded employment would reflect their higher-tech production. [...]if these new capital-intensive firms are more productive, their expansion could offset nearly all of the employment declines at labor-intensive firms. |
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ISSN: | 0895-0164 0895-0164 2163-3592 |
DOI: | 10.21033/cfl-2019-413 |