News that efficient fast-food robots are entering the market have sent shudders through advocates of a guaranteed minimum wage. What’s the sense of aiming for a career in flipping burgers if those jobs are poised to go the way of buggy-whip makers and slide-rule manufacturers? Technological innovation is menacing employment. Salon warns that ”robots are coming for your job: Amazon, McDonald’s and the next wave of dangerous capitalist ‘disruption’”
In the United States and other advanced economies, the major disruption will be in the service sector—which is, after all, where the vast majority of workers are now employed. This trend is already evident in areas like ATMs and self-service checkout lanes, but the next decade is likely to see an explosion of new forms of service sector automation, potentially putting millions of relatively low-wage jobs at risk.
San Francisco start-up company Momentum Machines, Inc., has set out to fully automate the production of gourmet-quality hamburgers. … While most robotics companies take great care to spin a positive tale when it comes to the potential impact on employment, Momentum Machines co-founder Alexandros Vardakostas is very forthright about the company’s objective: “Our device isn’t meant to make employees more efficient,” he said. “It’s meant to completely obviate them.”
Change never stops and its effects work in both directions. The Left had been poised to leverage the fact that while fast-food workers entered the industry young, they aged like everyone else. ” Nearly 90 percent of fast food workers are twenty or older, and the average age is thirty-five. Many of these older workers have to support families—a nearly impossible task at a median wage of just $8.69 per hour.” So far, so good. But what time giveth, it also taketh away. Now, after strikes in 50 US cities had put the minimum wage movement on the verge of triumph, “disruptive capitalism” has come along to eliminate the jobs themselves.
But automation will not stop at replacing burger flippers. Its insidious fingers are reaching into every corner. Robert Kuttner of the American Prospect noted that “robots have indeed eliminated a great deal of factory work and are rapidly moving on to product design, medical diagnostics, research, teaching, accounting, translating, copy editing, and a great deal more. Once-secure professions are no longer safe. From that, many economists conclude that we may just have to adjust to a high plateau of unemployment.” Unlike Salon, Kuttner believes jobs will simply be displaced into tasks where humans have a competitive advantage. Flipping burgers is a terrible waste of a mind anyway, he argues. The “invisible hand” will guide them to a higher use of their time.
This story [of universal unemployment] is mostly malarkey. Not the automation part; technological displacement of human work is indeed accelerating.
The part that is malarkey is the assumption that high rates of human unemployment must necessarily result. They will indeed result if we trust “the invisible hand” to do the transition.
But the “invisible hand” is often less powerful than the visible one. The late Nobel Prize winning Harvard economist Wassily Leontief noted that if horses could vote the government would never have allowed the rise of the motor car industry in the early years of the 20th century. One place where horses don’t vote is China, maybe because people don’t vote there either.
The Chinese are embracing automation with a fervor that would put fast-food chains to shame. “The robotics industry is on the cusp of revolutionizing the way business is conducted in China; and the world. With China expected to have the most industrial robots operating in production plants worldwide by 2017,” writes China Briefing.
The Chinese government is pushing forward with robotic research, and leading foreign robot manufacturers are their main focus. With demand rising, Chinese manufacturers will be looking to acquire foreign companies to speed up development through the use of imported technological knowledge and materials – something that China is currently lacking….
Currently, the automotive industry is the most prominent industry for robotics in China, claiming 40% of robots in operation. The next big industry to follow will be electronics, but the adoption of robotics is constantly increasing and has expanded into the aerospace, healthcare, railway, energy, consumer durables, apparel and jewelry industries. The automation of China’s production plants is still in the beginning stages, but is expected to double within the next three years (from 200,000 units today to more than 400,000 units) – surpassing Europe and North America. …
Over the past five years, companies in China have adopted the use of robots to combat worker shortages, rising wages, increase efficiency and to cut production costs. The ratio of industrial robots to workers in China is still relatively low, but that is swiftly changing. China has been long known as a source of low-cost manual labor, but as the cost of automation drops and wages increase, industrial automation is looking increasingly attractive. Wages have been increasing at a rate of 10% annually over the past decade while the cost of robot production has been decreasing by 5% year on year over the same period.
While Americans are working to set minimum wages, ironically the Red Chinese are working to abolish them. In time this may reverse the current relative reliance on labor. China is choosing to become an automated economy while the West is determined to reinvent itself as legally-mandated labor intensive society. The Chinese vision is a Jetson-like future. The Western future is one of spinning wheels, bicycles and craft beer. Thus, one of Leontief’s predictions about international trade may come true, but with the roles of the First and Third Worlds reversed. He wrote that jobs would move to where the technology was, assuming that the technology would remain in the US and Europe.