This Is the End


Markets, Risk and Human Interaction

August 23, 2012

Will the Unemployed Really Find Jobs Making Robots?

There is a recent story in the New York Times on the growing use of labor-saving robots to increase production efficiency and, by replacing low-cost overseas labor, to return production to our shores. But the operative term here is “labor saving.” They return production to our shores, but given that they do so by replacing the low-cost foreign labor with machines, it opens up the question of the implications for employment once the production returns. If the robotic revolution is successful, will all the unskilled laborers that are being replaced move up the chain into more skilled and higher paying jobs? Or will they simply be replaced?

This is a critical question right now, because it is at the center of whether the high level of unemployment is structural rather than cyclical. By the time the dust settles on the cyclical component, we may discover we are looking into a growing chasm of labor-lite production.

In some cases, replacing human labor with robots may be a good thing all around. Take the development of robotic warehouses. Warehouse packing is the sweatshop job of our time. The article “I Was a Warehouse Slave” gives a day-in-the-life view of these workers, effectively paid for piece-work, without benefits, with one-day notice job security, in physically grueling conditions. (The warehouse workers are usually employed by temp agencies that act as what I would call “labor launderers”, a buffer between the sub-par conditions of the workers and the image of the company that uses them).

There are a number of companies now that provide robotic solutions for many of these jobs. One of them, recently acquired by Amazon, is Kiva Systems. I first saw what their robots can do at a Wired Conference a few years ago. Check out this video from that conference, or any number of other ones on their robots. It is amazing and entertaining. Another company in the same space is the start-up Symbotic, but they don't seem to have any cool videos out yet.

The problem, of course, is that a sweatshop job might be better than no job at all. So what do these workers do next. This is where the “Well, someone will have to make all those robots” sort of refrains begin. From the New York Times article: “Robotics executives argue that even though blue-collar jobs will be lost, more efficient manufacturing will create skilled jobs in designing, operating and servicing the assembly lines, as well as significant numbers of other kinds of jobs in the communities where factories are. And robot makers point out that their industry itself creates jobs. A report commissioned by the International Federation of Robotics last year found that 150,000 people are already employed by robotics manufacturers worldwide in engineering and assembly jobs.”

Well, common sense tells you that you don't replace five $30K-a-year workers with a $250K robot only to reemploy those five workers in other, higher-paying jobs to build and maintain the robots that just replaced them. There will be skilled jobs in designing, operating and servicing the assembly lines. But obviously not as many jobs as the robots replace, and, taking nothing away from the potential for retraining, most likely not to be filled by the unskilled workers who just lost their jobs.

We have a ingrained view that when one door for labor demand closes, another one opens, that the march of economic progress pushes the workers along with it. It has happened in the past, and in a spectacular way. For example, the industrial revolution came about by the efficiencies that reduced the need for labor in agriculture, freeing up labor for industry. The push of the unemployed and disenfranchised from the farms into the factories was critical for the industrial revolution because at the outset the industrial jobs were not attractive enough for those in agriculture to leave their land and move into the factory system voluntarily. The same has continued over the course of the industrial age. As industry after industry developed efficiencies of production that reduced the need for unskilled labor, new jobs opened up either because of new skills being required to deal with new manufacturing methods, because the raw demand for consumption expanded the labor demand, or because new products, even new industries arose.

But it doesn't always have to happen that way. Where do the displaced workers go this time around? To say that they will move up the chain and go into more skilled jobs building the robots is glib. The entire point is that the robots are labor saving. It certainly is not a good business proposition if they save on the cheap labor but pay out more for more skilled labor.

Whatever analogue there is to the Industrial Revolution, workers do not play much of a role in it. It is interesting that u to this point much of the displacement from computers has been in the mid-level jobs, like bookkeepers. These medium skill jobs that focus on rote but quantitive tasks are the easiest for a computer to do. Replacing workers doing relatively unskilled, manual tasks is actually more difficult. But the rubicon is being crossed. For example, Meyakawa Manufacturing is shipping robots that can debone chickens at the rate of 1,500 per hour, replacing ten human workers. As one commentator put it, “if you can do that, you can do most anything.”