Thanks to information technology and business practices like off-shoring and outsourcing, U.S. productivity is rising faster than employment. Since the end of 2001, the number of American jobs has increased by a mere 1.9 percent, while the total number of hours Americans have worked has risen by only 2.8 percent. During that same time, however, GDP has soared by 20 percent.
Thats great news for businesses and their shareholders, but the trend troubles those who imagine the nations workforce shrinking as automation increases. Specifically, the growing use of robots to replace human workers causes nightmares for those who envision the vast majority of jobs being done by machines.
Sales of industrial robots are climbing every year, with an increase of 38 percent between 2010 and 2012. By the end of this year, one expert predicts there will be 1.2 million robots in use around the world.
If you look at the rise of robotics pessimistically, that means robots are replacing 1.2 million human workers, or more than 1.2 million since robots can work faster, without breaks, and without getting bored or sick.
Among the pessimists are MIT professors Erik Brynjolfsson and Andrew McAfee, who blame robots in part for the jobless recovery1 As McAfee points out, "Our economy is bigger than it was before the start of the Great Recession. Corporate profits are back. Business investment in hardware and software is back higher than its ever been. Whats not back [are] the jobs."
According to Brynjolfsson, the jobs arent back because they are already being performed by machines. He laments, "The percentage of Americans with jobs is at a 20-year low. Just a few years ago, if you traveled by air you would have interacted with a human ticket agent. Today, those jobs are being replaced by robotic kiosks. Bank tellers have given way to ATMs, sales clerks are surrendering to e-commerce, and switchboard operators and secretaries to voice recognition technology. There are lots of examples of routine, middle-skilled jobs that involve relatively structured tasks and those are the jobs that are being eliminated the fastest. Those kinds of jobs are easier for our friends in the artificial intelligence community to design robots to handle them."
The result, according to Daniela Rus, director of MITs Computer Science and Artificial Intelligence Laboratory is that, "weve reached a tipping point in robotics," in which it will be possible for robots to handle the production at a factory "all while you are sleeping."2
This is already starting to happen at warehouses where robots do most of the work. For example, in Devens, Massachusetts, 69 robots now perform all of the heavy lifting while navigating through a distribution center that is 200 yards long, plucking 10,000 items per day from storage shelves and carrying them to the shipping area with a rate of speed and a level of efficiency that their human co-workers cant possibly match.3
Taking the current trend to its logical conclusion, its just a matter of time until robots are not only building entire complex products such as cars entirely by themselves ? but also building other robots to build the cars. Soon, costs will fall, but ? the pessimists fear ? consumers wont be able to afford to buy cars because they wont have jobs.
Fortunately, this scenario isnt very realistic. In the short term, at least, robots wont replace human workers; they will simply complement humans. For example, a robot called Baxter hit the market in September 2012 and it is already being used in manufacturing operations.4 While the robot can do the job of two human workers, it has been designed with a human face and with sensors that alert it when a human is in its path so that it can move out of the way. At a cost of $22,000, Baxter lasts three years, meaning it can work 6,500 hours at a cost of $3.40 per hour ? significantly cheaper than American workers, and about the same wage earned by Chinese workers.
What this means is that American manufacturers now have a viable alternative to off-shoring production to countries such as China that offer cheaper human labor. If a fleet of Baxters enables a company to stay in business and to keep its operations in the U.S., that means other jobs that robots cant handle can be kept in the U.S. as well.
For example, a company called Lear that makes automobile parts near Detroit is using robots to assemble some of its components.5 A company spokesman says that automating these tasks allows Lear "to stay competitive and to keep core employment for everyone."
This view is in line with a new study by the International Federation of Robotics (IFR) which found that in the countries that use the highest number of robots, paid employment has actually increased.6 Why? Because even if humans lose jobs to robots in manufacturing, they are needed to handle distribution and services ? and with robots producing a greater number of goods at lower costs, the result is more products that need to be sold and shipped, which leads to a higher demand for human workers.
A perfect example is Baltimore-based Marlin Steel, which uses robots to create its products. Over the past seven years, as robots have taken over more and more of its production, Marlin has nearly doubled its human workforce from 18 to 34 people, creating new jobs in administration, engineering, sales, and marketing. The company president explains, "Its a virtuous cycle. We are shipping great quality products fast due to robots, and that in turn means more jobs."
The IFR study found that the use of robotics has directly created 150,000 jobs worldwide, as well as another 150,000 jobs for support staff and operators. Another 2 million to 3 million jobs have been created or kept from being destroyed when robotics allowed products to be made that couldnt otherwise be made. In cases where poor working conditions would not allow a job to be done without the help of robots, another 150,000 to 300,000 jobs have been created. In sectors where using robots allows companies to be competitive with lower labor costs in other countries, robots created 2 million to 3 million more jobs.
At the same time, even more jobs have been created indirectly by robotics. These 3 million to 5 million downstream jobs were created by new products and services that would not exist without increased automation, such as new phones, videogame consoles, and computers. When these are added to the jobs directly created by robotics, the IFR concludes that the use of robots has created a total of 8 million to 10 million jobs worldwide.
Looking ahead, please consider the following forecasts:
First, the increasing use of robots poses a threat to people who work in positions that are easily automated.
For example, a few pharmacies are now using robots to accept digital prescriptions, gather the prescribed medicines, and package them for patients. The UCSF hospital system has used the system for several months without a single error.7
Second, robots will increasingly be used to provide services, rather than being limited to manufacturing jobs.
One example is a robot that babysits children at retail stores while parents shop. As weve discussed in previous issues, many types of robots are being designed to provide home-based care for the elderly or those with severe medical conditions.
Third, the risk that robots will one day perform every job, leaving humans with no work and therefore no incomes, is nonexistent.
Even if robots or artificial intelligence could somehow automate every profession, the result would not be a world in which products would continue to be produced at their current prices, which would be higher than unemployed people could pay. Instead, as Forbes.com writer Tim Worstall points out, production of goods and services would become so efficient that the costs would continue to plummet while the supply would continue to increase.8 The result would be that everyone would be able to consume everything they needed or wanted; it wouldnt even be necessary to get a job or to earn an income in order to consume.
Fourth, the greatest threat that robotics poses is not to U.S. workers, but to their counterparts in countries like China and India.
When a robot such as Baxter can be deployed for $3.40 an hour, theres simply no advantage to off-shoring production to developing countries.9 Unquestionably, prices of robots will drop further due to innovations and economies of scale, even as labor costs will inevitably rise overseas. Without the need to pay shipping costs, manufacturing in the U.S. will be cheaper than off-shoring. Another benefit will be faster response time to customer preferences. When fashions change or sales of a product accelerate or decline, U.S. factories will be able to adapt in real time. American made products will also reach store shelves more swiftly, without the long delay caused by overseas shipping. Finally, quality will improve dramatically, because American companies will once again be able to oversee and control every step of the production process rather than off-shoring it to factories in foreign countries.
References List : 1. CBSNews.com, January 13, 2013, "Are Robots Hurting Job Growth?" ⓒ 2013 by CBS Interactive, Inc. All rights reserved. http://www.cbsnews.com/2102-18560_162-57563618.html2. Denver Post, March 7, 2013, "Will Robots Create Jobs or End Them?" by Cecilia Kang. ⓒ 2013 by The Denver Post. All rights reserved. http://www.denverpost.com/technology/ci_22737600/will-robots-create-jobs-or-end-them3. CBSNews.com, January 13, 2013, "Are Robots Hurting Job Growth?" ⓒ 2013 by CBS Interactive, Inc. All rights reserved. http://www.cbsnews.com/2102-18560_162-57563618.html4. Ibid.5. Denver Post, March 7, 2013, "Will Robots Create Jobs or End Them?" by Cecilia Kang. ⓒ 2013 by The Denver Post. All rights reserved. http://www.denverpost.com/technology/ci_22737600/will-robots-create-jobs-or-end-them6. Ibid.7. NBCNews.com, April 1, 2013, "Nine Jobs that Humans May Lose to Robots," by Judith Aquino. ⓒ 2013 by NBCNews.com. All rights reserved. http://www.nbcnews.com/id/42183592/ns/business-careers/t/nine-jobs-humans-may-lose-robots/-.Ua4qoOsf2mF8. Forbes.com, December 27, 2012, "Robots and Jobs: Is Paul Krugman Really Saying This?" by Tim Worstall. ⓒ 2012 by Forbes.com LLC. All rights reserved. http://www.forbes.com/sites/timworstall/2012/12/27/robots-and-jobs-is-paul-krugman-really-saying-this/9. CBSNews.com, January 13, 2013, "Are Robots Hurting Job Growth?" ⓒ 2013 by CBS Interactive, Inc. All rights reserved. http://www.cbsnews.com/2102-18560_162-57563618.html
