New factories use very few people, part of the reason why it's difficult for many countries to industrialize like South Korea or China did (climbing manufacturing ladder).
> Further the jobs from building the factory are temporary.
This is correct, and it has an impact on local employment and social dynamics, but not at the country level.
> They need fewer people to build and to maintain than older ones did.
That's absolutely not true. Quite the opposite. You do need less people to build and maintain a modern plant than to operate an factory in the past.
Also, you need to clarify what you mean by “older”, because heavy industries have automated steadily between the 50s and the 80s, and that process was mostly achieved by the 90s.
And I can't think of an industry that was still labor intensive by the 20s and that has been more impacted by automation than offshoring.
There’s plenty of papers showing exactly this. What do you think has driven productivity? People simply bring smarter?
The fact is capital expenditure from company or investors has bought machinery, compute, pipelines, transport, and massive investment to make those workers more productive for decades. As such, the returns to capital as a share has increased. Those places able to deploy capital to add productivity win over those that don’t.
And real total remuneration across all quintiles has increased significantly. BLS among others has all historical data to check.
If/when there’s a period where there isn’t more gains to be had by more investment per worker, and workers become more productive via their own skill (education, diet, genetic implants,…), then more returns will flow that direction.
“Productivity” is a terrible metric for such a discussion, it's not what it sounds, it's merely “real” GDP/worked hours.
> The fact is capital expenditure from company or investors has bought machinery, compute, pipelines, transport, and massive investment to make those workers more productive for decades. As such, the returns to capital as a share has increased. Those places able to deploy capital to add productivity win over those that don’t.
This is the fairy tale you learn in econ 101, but in reality that's not what happened in the period, the businesses that won during the 2000-24 period (the so-called “tech” companies) were companies for which capex were well below average.
> This is all well known, and easily checked.
That's not “well known”, you're just saying the gospel. It doesn't matter if it's contradicted by evidences, you believe that how the world work so it must be true.
It's interesting you cut out the "There’s plenty of papers showing exactly this." then pretended the rest is simply ignorant belief.
> the businesses that won during the 2000-24 period (the so-called “tech” companies) were companies for which capex were well below average.
First, it's odd that when discussing the point about total US worker productivity and capital expenditures, you somehow think a sector consisting of less than 1% of workers is evidence. And even on that claim you are incorrect.
Here's the datasets for that period capex by industry [1]. You are demonstrably wrong by a large margin. I expect you to have some better sourced or more convincing data, otherwise it seems you're operating on belief, not evidence.
If you want to try again, try looking at all workers, not cherry picked examples.
> That's not “well known”, you're just saying the gospel
Here's google scholar on the literature around this [2]. Go ahead and tell me again how this is not well known? Pretty much every paper and piece of empirical evidence on this points to the same reasons.
Robots (and other tools) are capital. A way I think of it:
if you formed a co-op of sorts, with let's say 20 people, starting with no land ownership and hardly any tools, they could try to make a business. Whatever they end up starting would be a fairly low-productivity business- washing windows, janitorial services, lawn service, etc. The more tools and land a co-op has to work with, the more productive they can be. With a few million dollars up-front they could have built a factory instead.
The increased productivity generated can be attributed to the capital share of income.
That's econ 101. But that doesn't mean that's what happened in the real world.
The thing is you won't be able to name a single industry for which automation has had a significant impact on labor productivity during the 2000-2020.
The US lost almost half of its manufacturing jobs in the 2000s and it has pretty much nothing to do with productivity, and everything to do with businesses moving their production abroad.
Robots can have a huge impact in the coming decades, but you can't argue that they had negligible impact on the past two decades.
Automation isn't foreign to the topic. There's some discussion here that refrains from estimating too hard, but I think it's closer to outsourcing's effect:
Outsourcing and automation both reduce worker leverage, which reduces wages, which could explain reduced labor share. I'm not sure how one would weight it all.