Taxing automation a terrible idea

I recently read about U.S. politicians who are considering taxing manufacturers that implement robots at plants. So while machine shop owners are coping with the labor shortage and scrambling for people to operate CNC machines to meet production needs, government officials are finding more ways to prevent the United States from competing globally.

“There are three numbers that explain the current labor shortage,” said Aaron Prather of ASTM International. “They are 1.6, 2.1 and 10,000. The current birth rate in the U.S. is 1.6 births per woman, which is way below the 2.1 births we would need to have to just maintain our current population. Top this with 10,000 baby boomers hitting retirement age every day. We just don’t have the people to fill open jobs like we used to. We have entered a phase where we will have more people over 65 than we have under 15 for the foreseeable future.”

Certain politicians are considering taxing manufacturers that implement robots at plants. Image courtesy of C. Zoberis

It is important that our government officials understand that the workforce has declined significantly, leaving automation as the only solution. Further, here are eight points that they need to know:

1. Taxing robots reduces incentives for developing innovative technologies, which can result in less efficiency, productivity and economic growth.

2. Taxing robots would discourage businesses from investing in automation, which would harm job creation. A more automated workforce can increase productivity and ultimately lead to more job growth.

3. Robots enhance the competitiveness of companies by lowering the cost of production, which fosters economic growth. As production increases, the economy grows, which then leads to an increase in jobs across all industries.