We have written about all kinds of robot journalists before but here, from the WSJ, is an explanation why in this “economic recovery,” companies have been more willing to spend money on equipment than people.
Temporary tax breaks, the Journal says, meant that any capital purchase last year could be written off 100% for the first year. And that’s part of the reason why productivity has increased while hiring has remained anemic at best.
“History suggests that investment that increases productivity eventually will create jobs and raise living standards,” the Journal continues. “The mechanization of the farm and the automation of the factory both raised fears of permanent unemployment that were unrealized, as efficiencies in production of basic commodities created jobs in all sorts of services.”
But in the short run, that just means fewer jobs to go around.
This effect isn’t confined to machines, either. White-collar companies are investing in software rather than new personnelwhich is great for the software companies, says Jason Furman, deputy director of the White House’s National Economic Council.