….Technological unemployment. It’s an old story that’s been knocking at the door for over thirty years, but the message is finally coming home. The old economics textbooks of the late seventies were preaching the gospel of a future of machines run by a skilled cadre with the unskilled and semi-skilled up the proverbial creek. But even the skilled are now going to be affected. Yet, reading between the lines of Bernanke’s latest efforts at performance art, the banking system is getting stronger and are lending a bit more, housing has consolidated and started to grow; only unemployment remains a concern. The social and political question, is what to do with 20 per dent unemployment and a low historically speaking, labor force participation. Higher corporate taxes means that loot will stay out of the country and they’ll play a shell game to hide it. But discretionary consumer spending is two-thirds of the economy. Is the future Argentine style car-jackings, more robberies, kidnappings, a return to the 1930′s and the need for a new-new deal. In any event, the short term looks painful.
With robotics transforming the workplace, here is a real fiscal cliff here, not the make-believe ping-pong match between Chairman Obama and the GOP. At heart of the liberal economic ideology is the standard cry of the Paul Krugman’s and Stiglitz: “More Stimulus!” as if at the Crazy Horse Bar or the Cage aux Folles; that is, the view that unemployment is cyclical as opposed to structural and a little Keynsian cash dump will tide John Q. Ordinary over. The truth is that the information age we are entering can be seen as severely cyclical or moderately structural depending on how you crunch the numbers and what you’ve been smoking. Employment will catch up, its just going to take time, and not succumb to Krugman’s demagoguery of robots and robber barons turning society into a T.S. Eliot Wasteland.
From a good piece from CBS (see link at end)…One of the hallmarks of the 21st century is that we are all having more and more interactions with machines and fewer with human beings. If you’ve lost your white collar job to downsizing, or to a worker in India or China you’re most likely a victim of what economists have called technological unemployment. There is a lot of it going around with more to come.
At the vanguard of this new wave of automation is the field of robotics. Everyone has a different idea of what a robot is and what they look like but the broad universal definition is a machine that can perform the job of a human. They can be mobile or stationary, hardware or software, and they are marching out of the realm of science fiction and into the mainstream.
but instead of serving us, we found that they are competing for our jobs. And according to MIT professors, Erik Brynjolfsson and Andrew McAfee, one of the reasons for the jobless recovery.
Andrew McAfee: 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 it’s ever been. What’s not back is the jobs.
Steve Kroft: And you think technology and increased automation is a factor in that?
Erik Brynjolfsson: Absolutely.
rcentage 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.
Erik Brynjolfsson: 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. They could be software robots, they could be physical robots.
Steve Kroft: What is there out there that people would be surprised to learn about? In the robotics area, let’s say.
Andrew McAfee: There are heavily automated warehouses where there are either very few or no people around. That absolutely took me by surprise.
It’s on display at this huge distribution center in Devens, Mass., where roughly 100 employees work alongside 69 robots that do all the heavy lifting and navigate a warehouse maze the size of two football fields — moving 10,000 pieces of merchandise a day from storage shelf to shipping point faster and more efficiently than human workers ever could.
Bruce Welty: We think its part of the new American economy.
Bruce Welty is CEO of Quiet Logistics, which fills orders and ships merchandise for retailers in the apparel industry. This entire operation was designed around the small orange robots made by a company outside Boston called Kiva. And can now be found in warehouses all over the country.
…Steve Kroft: If you had to replace the robots with people, how many people would you have to hire?
Bruce Welty: Probably one and a half people for every robot.
Steve Kroft: So it saves you a lot of money?
Bruce Welty: Yes.
And it’s not just going on in warehouses. El Camino Hospital in California’s Silicon Valley has a fleet of robots called tugs that ferry meals to patients, medicines to doctors and nurses, blood samples to the lab and dirty linen to the laundry.
A hospital spokesman told us the tugs are supposed to supplement nurses and hospital staff – not replace them. But he also believes that robots and humans working together is the beginning of a new era.
Robots are now wielding scalpels for surgeons, assisting in the most delicate operations — allowing them to see and snip their way through prostate surgeries with minimal damage. And they have begun filling prescriptions in hospital dispensaries and local pharmacies.
Economic evolution has been going on for centuries and society has always successfully adapted to technological change creating more jobs in the process. But Erik Brynjolfsson and Andrew McAfee of MIT think this time may be different.Read More:http://www.cbsnews.com/8301-18560_162-57563618/are-robots-hurting-job-growth/?pageNum=2
(see link at end)…Even the early stages of the Industrial Revolution quickly made England the wealthiest society that had ever existed, but it took a long time for the wealth to be reflected in the earnings of ordinary workers.Economic historians still argue about whether real wages rose or fell between 1790 and 1830, but the very fact that there is an argument shows that the laboring classes did not really share in the nation’s
It’s happening again. As with early-19th-century England, late-20th-century America is a society being transformed by radical new technologies that have failed to produce a dramatic improvement in the lives of ordinary working families–indeed, these are technologies whose introductions have been associated with stagnant or declining wages for many. The Industrial Revolution was based on iron and
steam, while we are living through a revolution based on silicon and information; but in a deep sense the story is probably much the same.
As far back as 1817, the great economist David Ricardo explained how technological progress can raise productivity yet hurt workers; his analysis, suitably reinterpreted, remains valid today. Here is a modernized version of Ricardo’s story: imagine that initially our economy uses a technology requiring that each worker be supplied with $50,000 in capital equipment. And suppose that the current level of savings and investment is just enough both to replace old capital as it wears out and to equip new workers with the same level of capital as those already employed. In such an economy, there will be more or less full employment and a stable distribution of income between capital and labor.
Now suppose a new technology comes along–one that raises the productivity of the average worker dramatically, say by 75 percent. The only drawback is that to use the new technology, a worker must be equipped with much more capital–say $100,000′s worth. If wages are a great enough share of costs, companies will find the new technology well worth introducing in spite of the extra cost, but what will it do to the workers? Read More:http://www.net4dem.org/cyrev/archive/issue5/articles/Does%20Technlogy%20Create%20Jobs/Does%20Technology%20Create%20Jobs.pdf