MIT: Taxing Robots Might Stave Off Job Loss, Income Inequality

(Photo: Arseny Togulev/Unsplash)As useful and impressive as robots can be, they present one ubiquitous concern: Will they take our jobs? Robots and other autonomous technologies are rapidly gaining prevalence across a variety of industries, from fast food and transportation to shoe shining and bartending. While some say it’s necessary to integrate robots into the workforce, others worry they’ll displace human workers who need that income the most. According to MIT, however, we can have our cake and eat it too—we just need to tax robots.

MIT isn’t new to the concept of robots’ effects on labor and income disparity. Last month the university completed a study confirming automation’s tendency to displace lower-income workers while increasing corporations’ (and their executives’) bottom lines. Scholars have been researching ways to embrace autonomous technologies while staving off job loss for years, and MIT’s most recent study on the subject suggests that a robot tax would do the trick.

The tax would incentivize companies to retain human workers while compensating for some of the payroll tax lost by a reduction in force. Arnaud Costinot and Iván Werning, two professors of economics at MIT, analyzed the rate at which robots tend to replace human workers to devise the ideal tax range. Also incorporated were displaced workers’ typical income levels as well as income taxes, the latter of which are meant to address income inequality to a certain extent.

An effective robot tax would likely sit between 1% and 3.7%, according to the economists’ calculations. Much higher than this, and the tax would exaggerate the role robots play in operational routines; go lower, and companies won’t be incentivized to keep their human employees at all.

Decades ago, robots were thought to be a form of futuristic technology capable of reducing humans’ workloads and facilitating a simpler, stress-free life. But rather than giving way to Jetsons-like leisure, the advent of semi- and fully-autonomous robots has exacerbated existing labor and income disparity. Companies like Tesla and Amazon, which are known for using cutting-edge robotics in their factories and warehouses, are also known for pushing dangerously long workdays and underpaying—not to mention dehumanizing—the very employees automation is meant to assist. When these systems fail, it’s often the employees at the bottom of the food chain who end up taking the blame. (It’s worth mentioning that both of these examples are headed by disproportionately wealthy people, too.)

Automation obviously isn’t going anywhere. Robots will continue to make their way into industries like agriculture and law enforcement, while artificial intelligence (an entirely separate field of study, yet equally built for convenience) takes on illustration and coding. This means ideas like MIT’s small robot tax are virtually guaranteed to mature in the coming years.

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