Donald Trump's economic team has been widely ridiculed for its projection that economic growth will average 3.0 percent annually over the next decade. However, a Washington Post article implies that Trump's team may actually have been overly pessimistic. The article discusses the possibility that robots will be used to replace cashiers at Whole Foods, now that it has been purchased by Amazon.
The piece also raises the concern that automation will displace large numbers of workers throughout the economy over the next two decades.
"A 2013 study from Oxford University predicted that 47 percent of jobs in the United States could be performed by machines over the next two decades, and cashier roles carry an especially heightened risk."
This pace of automation (losing 47 percent of jobs over two decades) is consistent with a 3.0 percent rate of productivity growth, roughly the same rate as the U.S. experienced in the long Golden Age from 1947 to 1973 and again from 1995 to 2005. By contrast, the Congressional Budget Office is projecting productivity growth of roughly 1.5 percent. If the Oxford study's more optimistic assessment proves correct, with labor force growth in the range of 0.5 to 0.7 percent annually, GDP growth would be in the range of 3.5 to 3.7 percent. This far exceeds the Trump administration's 3.0 percent projection.
Contrary to what is implied in this article, rapid productivity growth should lead to rapid wage growth and low unemployment, as was the case through most of the prior two periods. Of course, this assumes competent management of economic policy and there is a serious problem with being able to find qualified economists, which is why the people in charge of policy completely missed the housing bubble.