Technology, Automation and Employment
We’ve had a lot of discussion recently about returning manufacturing jobs to the United States. One of the major factors for manufacturing being outsourced initially was the cost of labor. One of the successful ways to keep manufacturing in the United States is to provide higher levels of automation. Automation can often effectively reduce the cost of labor and a fully automated factory can compete in whatever country it exists.
The downside of highly automated factories is that they don’t employ as many factory workers. The upside is that they do employ more highly paid technicians and computer maintenance staff. Jobs are also created for engineers, programmers and machinists are necessary to design and build the automation.
It is interesting to observe that there is a trend to use automation in many areas of the service industry as well as in manufacturing. There has been a trend recently for fast food workers to pressure for wage increases and a national trend for the fifteen-dollar minimum wage. In many jurisdictions, including New York where I live, wage laws have been rewritten to put provide a fifteen-dollar minimum wage for many in the service industries. The fast food industry immediately recognized the risk this put them under. Fast food chains, including McDonalds, decided to counter the wage increases by using higher levels of automation. They have experimented with and plan to roll out stores where food preparation and service is done completely by robots. The first store completely staffed by robots will open in 2017. Many jobs will be lost. There is some good news though. McDonalds will need technicians and other staff to care for and maintain the robots. These jobs will pay much more than fifteen dollars an hour.
Another major area of employment with rising pay rates is the trucking industry and truck drivers. There are those looking for ways to reduce these costs as well. Just last month the first self-driving beer delivery truck was “driven” in Colorado. The truck transported a full load of Budweiser beer without the assistance of a driver for most of an 80-mile trip. There are also prototype self-driving Uber cars in use in Pittsburgh, self-driving tractors for plowing and harvesting crops and highly automated drones being tested for package delivery.
According to World Economic Forum, it is estimated that over five million jobs will be lost by 2020 as a result of developments in artificial intelligence, robotics and other technological change. In addition to the jobs listed above many professional opportunities are also carried out more effectively by machines. We can use the legal industry as an example. Computers can be used to sort through corporate documents to find those that are relevant to lawsuits. This process, done manually, can run up millions of dollars in legal bills. Electronic methods can erase the vast majority of those costs and do the job more accurately.
There is a positive side to all of this. And all employment is not at risk. In many cases, workers will have greater employment opportunities if their occupation undergoes some degree of automation. For individuals who can learn to use new tools, automation can be their friend. Not all aspects of any job will be completely automated in the near future. The main impact of automation in the immediate future will not be to eliminate jobs, but to redefine them. There will be jobs, but workers will need to be trained in new sets of skills.
At Optimation Technology we focus on automation. As the future becomes the present we plan to be a part of this new revolution. We’ll improve lives and provide jobs for a more highly trained and skilled set of workers able to compete in the 21st century.