OPINIONISTA: US productivity boost: Automation, digitalisation and investment in new technologies on the rise — but jobs could be lost

📆 2021/04/21 9:05:00
📰 dailymaverick

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With Covid-19 vaccines being rolled out and supportive fiscal and monetary policies fuelling aggregate demand, the US economy is poised to return to its pre-pandemic output level later this year. The labour market recovery, however, will be much slower and unevenly distributed, with employment unlikely to return to its pre-pandemic peak until 2024.

While the pandemic-era acceleration of automation and digitalisation may boost productivity on the supply side, it could have a detrimental effect on demand, by hampering growth in labour income and consumption — a major determinant of economic growth generally.

The long-run effects could be substantial. About 60% of the productivity potential identified in the most recent MGI report reflects efficiency-boosting cuts to labour and other costs.

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