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Monday December 10, 2018

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How Does New Technology in the Workplace Affect Worker Wages?

For the past few years, it has been said that new technology will destroy the job market. This statement does not have much to support it and new studies have actually found that the opposite is true. A recently published paper from Uppsala University and the London School of Economics shows that the introduction of industrial robots has actually increased wages for employees while also increasing the number of job opportunities for highly skilled people.

The research was conducted by analysing the impact industrial robots had to the economy between 1993 and 2007 for over 17 countries. During this time, it should be noted that industrial robots saw a huge rise in usage and an 80 % drop in the price.

"We can see that industrial robots increase employee wages and increase productivity and that the number of jobs for low-skilled employees, and also to some extent for the medium-skilled, decreases, while job opportunities for the highly skilled increase," the authors say.

What this data shows is that after the introduction of robots in the workplace, the wages of workers increased. It is hypothesized that the new technology helped in raising profits for the organizations which were then distributed among the workers. The research also found out that the introduction of robots did not reduce job demand or reduce the number of employees at all. In addition to this, it was found that they helped increase the productivity in the workplace, with the researchers claiming that they helped to increase GNP by 0.37%, and the overall productivity of workers by 0.36%.

"This means that without industrial robots, growth in labour productivity would have been about 5% lower during the 14 years we have studied," they say.

Overall, this trend is expected to continue as more and more robots will be implemented in workplaces across the world. They will help increase in both economic growth and labour productivity. "Industrial robots are evolving and will be able to do more. At the same time, new types of robots are coming, such as medical robots that can perform surgery or different types of robots for transport. This development will contribute to continued growth and production increases," they conclude.

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