Economy

America’s Business Elites Admit They’d Rather Hire Robots Than People

CREDIT: AP/Paul Sakuma

Corporate boards lavish them with massive pay packages and politicians venerate them as “job creators.” But it turns out that America’s business chieftains would rather not create full-time jobs to do what needs doing if they can possibly avoid it, according to the latest annual survey from the Harvard Business School (HBS).

About 46 percent of HBS alumni say their firms would rather invest in technology to fill their labor needs than hire humans, compared to just 26 percent who disagree with that sentiment. A full 49 percent say their company “prefers to rely on vendors that can be outsourced rather than hire additional employees,” and “firms that increased their reliance on part-time workers during the past three years outnumbered those that relied less on part-timers by a ratio of two to one,” the school’s survey report says.

The survey report also remarks on “the recent divergence of outcomes, with firms…thriving and workers struggling” in the U.S. economy. It calls business leaders who do not measure their success partly through their company’s contributions to the standard of living for Americans “shortsighted” because the business world “has a profound stake in the prosperity of the average American” and “cannot succeed for long while their communities languish.” As with a recent Standard & Poor’s investment analysis that made news for summarizing the longstanding economist consensus that economic inequality hurts outcomes for everyone, these passages of the Harvard Business School report do not contain new information. They are notable instead because they illustrate that America’s economic elites may be taking a healthier view of how their well-being is interlocked with that of middle- and low-income Americans.

Whatever growth there may be in elite awareness that middle-class economic outcomes matter, though, the finding that employers would rather outsource or robotify than hire Americans indicates that labor costs are still one of the business world’s favorite places to cut corners. From the sweatshop-like warehouses that help Amazon undercut other retailers on price to wage theft and misclassification at fast food chains and American ports, the modern U.S. economy is rife with examples of that tendency to trim labor costs in service of profits. The elite attitudes on display in the Harvard survey contrast sharply with the working-class outrage that is driving strikes and other low-wage worker activism in the fast food, shipping, commercial logistics, and retail sectors.

One potential model for bridging that gap comes from Seattle. After more than a year of pressure from workers and far-left activists and politicians, a minimum wage of $15 became a political inevitability. The business community got on board with the idea in order to avoid being left out of the process of determining what that $15 wage law would contain. The resulting coalition of union power, business owners, and on-the-ground service providers and activists produced a compromise bill that will help link business success to working-class gains in Seattle for decades to come.