Attempting to save his flailing presidential candidacy, New York City Mayor Bill de Blasio announced a plan to tax businesses for automating jobs, calling it a “robot tax.” Ironically, the plan would hurt the workers that de Blasio aims to help.
De Blasio’s plan would involve establishing a tax on businesses that replace human jobs with automation in the form of five years’ worth of payroll taxes for the jobs eliminated. The revenue raised from this tax would be used to “guarantee” displaced workers jobs at comparable salaries in healthcare and green energy.
There are some fairly obvious administrative issues with how this plan would be implemented, like defining what exactly qualifies as a job eliminated by automation, how to guarantee workers with no experience or training in the healthcare industry a high-paying job there, and so on. However, the far bigger problem with this plan is that it is a classic example of the Luddite fallacy.
The idea that technology destroys jobs, and that we are steadily trending toward a fully automated workforce, ignores the jobs created by technology. The clear trend of technological innovation’s effect on the economy is this: technology replaces menial, low-paying jobs with automation, allowing businesses to offer consumers better products and services at lower prices. This creates a more prosperous economy overall, which helps absorb dislocated workers over time in other industries.
This trend has been showing itself for some time now. Over the last century, employment in certain industries, such as agriculture, has declined drastically due to technological improvements. Yet few mourn the smaller share that agriculture employment now represents, as higher-paying and better jobs in the service industry replaced them. As economist Alex Tabbarok puts it, “if the Luddite fallacy were true, we would all be out of work because productivity has been increasing for two centuries.”
And the data doesn’t bear out the fears of the Luddites. Not only are countries with high rates of automation surviving the robot apocalypse, they actually are some of the richest and have the lowest unemployment rates in the world. The supposed horrors of “late-stage capitalism” were greatly exaggerated.
De Blasio’s plan would harm American workers while hampering technological advancements that have drive significant improvements in quality of life for Americans over the last century. Not only has income per person increased by 250 percent for Americans since 1960, but the vast majority of Americans have affordable access to technologies that were either nonexistent or only available to the elite a century ago: the internet in the palm of your hand, large televisions, air travel, to name just a few. That’s in no small part thanks to automation.
De Blasio also seems to forget that our tax code already taxes robots. Businesses that choose to invest in capital are taxed more heavily than others. Firms that want to make their workers more productive, which leads to lower costs for consumers, are penalized on their investments. Adding another tax on robots would further limit America’s economic potential.
Rather than fighting the positive changes that technological improvement brings, policymakers should be embracing them. Improvements in human flourishing are something to be celebrated, not mourned.
Andrew Wilford (@PolicyWilford) is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to fiscal policy analysis and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.