We’re hearing a lot about how robots will take our jobs. The economic data, however, show that in fact the opposite is happening. The ONS estimates that the capital stock per worker has actually fallen in recent years, and next week’s figures are likely to show that business investment is still weak. In this sense, people have replaced machines rather than vice versa. Why?
One reason is that the financial crisis and then Brexit increased uncertainty. This encourages companies to hire cheap and dispensable labour rather than spend millions on capital equipment which might become an expensive liability if future demand proves to be weak.
A second reason is simply that real wages have stagnated for years. The flipside of people pricing themselves into work is that machines are being priced out of work.