February 24, 2015

THINKING ABOUT ROBOTS AND ZMP (ZERO MARGINAL PRODUCTIVITY) WORKERS. “Some robots do not cause a productivity explosion because they replace low productivity workers and the quality of the task done does not improve much after the initial introduction of robots. The automated equipment that turns a worker into a zero marginal productivity (ZMP) ex-worker does not need to offer a large and growing impact on the firm’s total productivity. It just has to lower total costs. . . . Suppose you manage low skilled and low productivity workers. Suppose they aren’t very conscientious. What is your day going to be like? Kinda like someone running around plugging new holes that spout in dikes. Will you like your job? For most people the answer is going to be “No!”. So automate the jobs and stop dealing with people who are a hassle to deal with. Think about it from the perspective of managers. They’d rather manage more fun and interesting problems and more talented people. Computer systems and robots are enabling them to do that. So I expect firms to develop technology that lets them shift their hiring preferences toward the sorts of workers their managers would rather manage. This might be why the labor market participation of high school drop-outs has dropped so low. Nobody wants to deal with them and the technology now exists to avoid it.”

If this is true, then an education focused on making people pleasant to work with might be as valuable as one focused on modest improvement in basic skills.

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