Last Sunday, CBS’s 60 Minutes put together a story about the rise of automation in several industries called “March of the Machines.” Almost immediately after, a controversy began to take shape. The Automation Industry Association has been the standard bearer of the criticism, when they released this statement in response to 60 Minutes:
“We provided 60 Minutes producers several examples of innovative American companies who have used automation to become stronger global competitors, saving and creating more jobs while producing higher quality and lower cost products, rather than closing up shop or sending jobs overseas. They unfortunately chose not to include these companies in their segment. With respect to MIT Professors Brynjolfsson and McAfee who gave their viewpoint in the piece, they are missing the bigger picture.”
These examples are then presented as counter-facts to 60 Minutes’ focus on how automation costs jobs:
“Automation creates jobs in the United States,” said Greenblatt. “Marlin Steel is hiring people because our robots make us more productive, so we are price competitive with China. Our quality is consistent and superior, and we ship much faster. Our mechanical engineers can design material handling baskets more creatively since we can make more precise parts. Our employees have gone 1,492 days without a safety incident because robots can do the more difficult jobs while our employees can focus on growing the business. American manufacturing’s embrace of robotics will ensure a new manufacturing renaissance in this country.”
“Roughly 90% of our automated cells are producing parts that were previously made off shore while the other 10% were also globally competitive, strictly due to automation,” said Tyler. “Automation has not only allowed us to bring more jobs back to the United States due to our ‘new’ cost structure, but our profit margin has increased. This ultimately allows us to fund additional growth, which in turn creates more stateside jobs.”
Now, agreed, there is something to be said about the focus of the piece. It wasn’t entirely fair in that it didn’t delve into how many jobs automation does bring back state-side. Undoubtedly, some jobs are going to be created when companies do move back.
With that said, my big question is this: how many jobs have been lost because of automation versus how many jobs have been created due to automation? When we get the answer to that question, I’d bet we’ll see why people are worried or angry about automation. The perception some economists (not just the two MIT professors featured in the 60 Minutes piece) and observers have right now is that job growth is being slowed because of, in part, automation.
So, that’s the recap. If the representatives of the automation industry are trying to put people’s minds at ease, they’re going to have to do a little bit better than making vague claims about some jobs being returned. They have to keep in mind that they’re telling the public this when corporate profits are at an all time high even though job growth is still painfully slow (and wages are stagnant); economists are pointing out that automation is having somewhat of a detrimental effect on jobs, and when companies are ramping up the money spent on new technologies.
Are those bad things to be happening? Well, obviously, it depends on who you ask. Proponents of automation figure that this is good, because it will lower the cost of goods and will free people up to find other, perhaps more fulfilling employment. Those are fair points. Detractors say that it will kill an economy that is already at the brink and create a monopoly on expensive capital, essentially recreating a new kind of class system. Those are fair points, as well.
For my part, and as I’ve covered before, I think it wholly depends on how prepared the workforce is to handle a shift like automation of the workforce. Despite the industry saying they create jobs, part of the reason of automation (at this point) is to reduce cost by making the human workforce lean and making work efficient. That necessarily means human labor will be cut, unless by some miracle the company finds new positions for workers elsewhere.
It used to be that technological advances affected unskilled labor, primarily, and those workers could retool fairly easy in other industries. The new machine revolution is beginning to creep into skilled blue collar jobs and white collar jobs, as well. Since the change is happening in those areas, those workers will need access to education and retraining programs; two things which are not easily had in the United States’ struggling economy.
60 Minutes cut out a part of the interview with Brynjolfsson and McAfee which would have served well, left in. McAfee said:
Over the next 5 – 10 years, the robots and the computers will not work us all out of a job at all. So, what is our playbook for helping the economy over that time period? Our playbook is really not that controversial. It consists of rethinking our educational system, making the best possible environment for entrepreneurship and upgrading the infrastructure in America.
That is pretty much right, though the order should go education, infrastructure and then entrepreneurship, I think. One thing that A3 pointed out in their response to 60 Minutes was that they were having trouble hiring people for the high-tech jobs, which is an issue that could be helped in part by greater education initiatives and trying to reinvigorate excitement in science (not just technology, but science in general.)
Aside from the crossroads that we stand at with technology itself, we are also at a crossroads at which we can decide whether we’ll lapse into Paul Krugman’s worst case scenario of elites having a monopoly on technology, or we could very possible go the way of the optimists and have an economy that frees workers up for other, greater pursuits outside of factories and offices.
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