So Are Robots Stealing Our Jobs? And Is This a Bad Thing?
August 11th, 2009 by Matthew Bleicher
Several years ago I attended the North American International Auto Show in Detroit, Michigan. One of the many exhibitions there was one put on by the UAW and GM – it was very, very cool. Right on the show floor they would assemble a car from start to finish. During this exhibition they showed how in the “old days” it used to take 16 people to move the car’s chassis and position it so that various parts could be placed on it – they even had a video running showing this laborious process. However, they pointed out that thanks to robots, now this job can be done with just 4 people – which is exactly what we witnessed on the show floor.
So, in other words, only a quarter of the previous workers are needed to accomplish the same job. 75% of all jobs in that one area alone, across every auto factory in the world was cut by this single robot. That is a staggering number. Can you imagine if you heard this number of jobs lost by outsourcing at a factory? It would be everywhere on the news. Yet this got nothing – and was, in fact, part of a display supported by the auto union! And this is hardly the only robot used on the factory floor.
So, somehow, this fact is ignored when conversations come up about what is reducing manufacturing jobs in America. Instead, it is blamed on outsourcing. Yet this doesn’t hold water – the USA manufactures more now than at any time in its history. Yet there are, without a doubt, fewer factory jobs. This is because of robots.
I know, it is easy to dismiss this as a Frankenstein-complex thing and to mock this. But it really is a major cause of job loss in the manufacturing sector.
Check out this video in which Drew Carey talks about how advanced robots are and how they are taking far more jobs than people realize.
Of course he also points out, correctly, that while many jobs are lost – many, many more are created as a result. This is NOT a bad thing. It is just a new thing.
This is why I differ from Bryan in our bet – I believe we can absorb those job losses because there will be whole new industries created.
However, as Gregory Clark points out in the Washington Post, I could be quite wrong on this. That, up until recently, we have had high-paying unskilled labor jobs. But many of these jobs are going away not just because of the Recession, but because they are no longer needed. More and more robots are able to take over these jobs as robotic complexity grows. Though I think this is just a generational thing. Unskilled jobs will disappear, of that I have no doubt, but that will only mean more and more people will learn new skills that will be in demand in this new economy. The current unskilled labor force might be out of luck – but future generations will be fine.
To be very clear, I am not saying we should live in fear of robots and that we should legislate against robotic advancements or something stupid like that. We must embrace these advancements in robotic technology. It would also be a good idea to keep all future discussions of where and why job losses AND gains occur by keeping track of job losses and gains because of technological advancements.
Lou Dobbs might keep track of every job lost in America to an overseas company, but as far as I can find no one is tracking job losses/gains because of technology.
However, we must make this part of the national conversation. There needs to be an awareness that this is not something for the future – it is happening right now.
August 11th, 2009 at 12:47 pm
Funny enough, in the dawn of time (1988) I won what used to be a notable writing award “Jack Hamady” award for the people from Michigan) predicting that if we wanted to have jobs in Flint in 30 years we should start producing robots, not cars, and the then GMI (now Kettering) should work on developing robotic engineering specialties. Neither happened.
Honestly though, off shoring is a more serious issue than robotics at this point, those 16 people you mentioned can be had for 10 years for less than the cost of a robot in much of the world. GE recently announced the creation of 1k jobs in the US and spoke of a commitment to keep the US a manufacturing power, but I fear it is too little, too late.
August 12th, 2009 at 1:38 pm
Except those people I mentioned were not theoretical – it has actually happened. That is because money isn’t the only reason. Robots are not only cheaper than any person over the long-term, but they have 100% accuracy. Quality rises when a robot is turning a screw 1,000 times a day rather than a person. So this means less legacy costs, in addition to the costs of paying a person and giving them benefits, no matter how cheap.
Additionally, if off-shoring was the issue, than manufacturing in the USA should be going down. Yet we make more in the USA now than at any other time in our history. So why the fewer jobs?
I firmly believe this is because of robots. A single position across every factory in America was eliminated by 75% by a single robot. Multiply this by other positions that robots have no doubt eliminated and the real problem of continually underemployed, unskilled labor is put into perspective.
August 12th, 2009 at 2:38 pm
You said, “Additionally, if off-shoring was the issue, than manufacturing in the USA should be going down. Yet we make more in the USA now than at any other time in our history. So why the fewer jobs?”
This is completely accurate, the increase in reliable productivity due to automation means we are making more, but the fact is we could be making everything that we make and China makes and still not exhaust our available workforce. However, shareholders like to hear about profit per share, not about reinvestment and growth, the demand money NOW, not in 24-48 months. Privately owned companies could weather a large increase in capital expenditure by taking the long view, publically owned companies seem incapable of doing so. The end result of this is cutting costs while slowly introducing more automation, rather than focusing on increasing productivity while maintaining the workforce to grow. The problem is that people are ignorant, they would rather have cheap less reliable goods than goods that are made to a higher standard, Most people would rather pay 2k for a car that lasts them a year, than 10k for a car that lasts 7. This is interestingly paralleled in the way our politicians run the government heh.
Letting China keep MFN (Most Favored Nation, granted to keep them less in the Soviet camp and now needing to be removed) status, and not using the power of tariffs properly has allowed foreign competition to dramatically undercut costs. If GM/GE/Admiral etc could produce goods cheaper here they would not have spent the last 30 years moving their lines overseas.
We have reached (and some say passed) a tipping point where our ability to purchase goods is hampered by the lack of jobs. SE Michigan is a good example of this problem. We can hope that as standards of living improve in the third world they will in turn want higher end consumer items, but I fear that their local manufacturers will be able to undercut us. Especially since most governments use protective tariffs to encourage their own industry.
September 1st, 2009 at 8:30 pm
I’ve been saying, for a long time now, that with the technology we have today, and where it’s going, will soon make human work obsolete. Though it’s just a fictional animated feature Wall-E did a pretty good job of illustrating this trend – and how it affects our health, development and well being. While I agree with some of the points presented in the reason.tv video they didn’t really substantiate their claims about the alleged new jobs that were being created from automation. They also didn’t compare these newly created jobs with the rates of job loss, among other important factors, which may have been able to support their position – or contrary to it. There is no one, right, answer for these problems but most of us should know that the path we are currently on is the wrong one. Wealth is made up of elements of poverty and poverty is made up of elements of wealth. I do believe it is possible to change this to where the differences aren’t as extreme between the small minority who controls the majority of wealth and the working class and poor who are the majority. Class war is fine as long as those at the bottom don’t know about it and are so preoccupied with trying to survive that they don’t have time to fight it. If you give them just enough they will be complacent with what little they have and not take action. You also need a large enough middle class to use as a buffer between those working class poor and their masters at the top. “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” – Warren Buffett