Does Automation Create Jobs?

You would need to look at actual numbers to properly answer and it will most likely vary by company, by industry, and by country. Example 100 hand assembly workers replaced by 1 assembly machine. To build that one machine, the OEM might have hired 1 additional employee. Indirect hiring might result in another 4 additional employees. So in this example, 100 employees where replaced with 5 by automation. Those 95 employees will need to get additional training for possible new job in new industry. Manufacturing as whole is is still an enabler for a country, because it is not how many employees an industry adds, it is how much that industry increases the GDP and how much additional revinue the industry brings into the country. # of employees is not the metric to gauge how an industry is doing.

You could also imagine not replacing the 100 workers with one assembly machine, and then the company is unable to compete in the long run and go bust, not even the 5 new jobs are saved....

But if the new machine is installed and works well the unit price can drop significantly and more sales result and soon a second assembly machine will be needed together with more skilled maintenance workers and higher profit for the company

Just a thought experiment

So true Far, a great contribution to this though experiment.

Is the question about when the economy is growing or in steady state.

Obviously in a growing economy automation allows you to expand and capture the market (so there are jobs for everyone involved).

In a static economy you sell by taking someone else's market share, so reducing costs by automation makes your products cheaper but puts people out of work.

That's why all governments around the world want their economy growing and if it isn't they try to kick start it by lavish spending.

Whether continuous growth is possible is another question.

This is true too Ffej. Just like I said, "most likely vary by company, by industry, and by country", it depends on that particular situation. Another example, the company may chose not grow, but invest capital gained in another facility, company or even another country. Each instance of automation replacing workers is unique and has to be looked at as so.

An extreme example of just how unique each situation can be, and all the many metrics that would need to be analyzed ... ATM machines (automation) replacing bank tellers. With that, the product (cash withdraws) didn't didn't get cheaper for consumer, worker found jobs elsewhere relatively easy, and extra profits gained most likely invested in other countries or at least other industries.

Automation creates unemployment among untrained personnel doing manual operative jobs,which is the majority of workers. Automation cuts down them and create jobs to maintain machinery but those machines are imported not made in many countries. When we talk about economy or nation we should not forget employment,otherwise unemployed people will take drugs, commit crimes,join rebels,rob,steal,set fire etc

If you improve production people need to earn enough money to be able to afford the goods that are produced. Automation reduces the number of people earning money to buy the goods. The fewer people who are employed are more highly slilled and highly paid and can afford the good life.

Jobs move overseas where the labour is cheaper but the people can't afford the products they are making so companies export. Slowly the wages increase and people can afford the goods they are producing. Companies think they can make more money if they automate more or move to a cheaper country but that creates unemployment. Japan is an example of that where jobs have moved to China and robots are replacing people.

China is installing robots in their factories at an alarming rate. Will the masses ever be able to afford the goods that are being produced?

More and more people can only afford Dollar Store or Wall Mart quality products. The majority of people in the west earn their living pushing paper and get paid well even though they are producing nothing. How long can that last?

Opening an industry building robots doesn't mean that industry will hire more people to build those robots. Robots are used to build robots; at least parts of them. They still rely on humans to assemble and test them. It is safe to say; more jobs are lost through automation than are created.

Although a lot of bad press is associated with robots, there is still a lot of good praise for them. They don't make mistakes or get tired like humans; they are more precise than any human could ever be, especially when repeatability is needed. We would like not to depend on robots, but they are indispensible in producing the products that we take for granted. A CNC machine can produce a part in seconds that would take a human hours to make and be repeatedly precise with no mistakes.