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Robots and Automation Are Taking American Jobs – Think Your Job is Safe?

by Darwin on December 16, 2012

factory-robots-usYou’d think the same headline would be the prominent theme of every year since the 1800s. After all, we’ve seen a decline in the need from everything from lamplighters once electricity was invented to farm workers once farming equipment, tractors and trucks came along. However, for various reasons throughout 2012, there’s been a steady debate brewing over modern day robotics and algos overtaking jobs that were once unthinkable.

Where Employing Humans Makes No Sense

There are a lot of parts of the economy where humans continue to perform functions that can and should be performed completely by automated means. By continuing to employ humans, it’s just an unnecessary cost on society and frankly, prevents people from being freed up to do something that adds more to US productivity, output, and possibly, their own career/income. Here are some examples:

  • Toll Takers – I don’t know what they call it where you live but in the Northeast, we have an “EZ-Pass system which allows your car to drive straight through an overpass that detects your car’s pass. Usually, there are a couple EZ-Pass only lanes and then there are a few human operated lanes. It continues to confound me why they still exist. And what is even more perplexing is why Americans still voluntarily sit on each toll line 5 minutes or more instead of flying through an automated lane. I could see an international traveler or very infrequent driver that doesn’t bother, but for 99% of drivers, why would you wait? Aside from that, the people performing these jobs aren’t really using their potential, at all. They stand in a booth all day taking a ticket and handing out change. They are often subject to insults and rude behavior, but more importantly, they are subject to hazardous fumes for a lifetime that must surely result in a higher prevalence of health issues later in life, and they are paid above-market rates for completely non-skilled labor due to their labor arrangement. They don’t really help with anything else outside of toll-taking. For instance, years ago, my car broke down going into the toll booth. What great timing! My car was stuck right at the damn entrance to the booth and I looked at the guy and shrugged, like “what now”? I said, “you wanna help me push this up a bit so people can get through?” He said no since if he hurt himself outside the booth, he wouldn’t be covered under the rules. So, I was on my own. I started pushing the car myself which was ridiculous since it was 2000 pounds and there was nobody to steer it. I wasn’t having much luck, but fortunately, a guy stuck behind me got out of his car to help me push. In essence, it makes no sense that these jobs still exist in the numbers they do. States should do more for force (or entice via incentives like a 10% discount) drivers to switch completely to EZ-pass type systems.
  • Gas Station Attendants – This is one of the more moronic relics of pre-automation that exist today. See, not only is it faster to pump your own gas rather than wait for the attendant to go between cars, but it’s cheaper too. People without critical thinking skills like to cite New Jersey’s mandatory attendants and low gas prices as refuting this fact. If someone could please explain to me how employing additional headcount for lower output/throughput somehow decreases costs, they deserve a Nobel Prize. No, what they fail to consider is that New Jersey simply imposes lower gas taxes than other states (and they sure as hell make up for it in property taxes at the highest in the nation), thus giving a false impression that it’s cheap gas with attendants. No, the gas input costs roughly the same as any other state (they do have the benefit of local refineries), but my adding gas pumping drones, it’s obviously adding a few cents per gallon that most drivers would gladly forgo. The other downside is that these gas stations can’t be open at all hours. When I’ve driving home real late and need gas, I like to be able to look at my Gas Buddy app and find the closest place and know it will be open at any hour since it’s an automated pump. Many manned stations in Jersey have to close early. But what about all those jobs that would be lost? Well, every other state gets by. Are these jobs worth saving? Perhaps these attendants would be better off in a different job anyway – again, not being subject to hazardous liquids and fumes every day, making minimum wage, and never advancing. It’s state welfare at the expense of taxpayers plain and simple.

Where Robots and Algos will Continue to Displace Humans

With the internet alone, we’ve already started to see a decline in the need for roles once fulfilled solely by humans. Travel agents for instance are not needed nearly as much as they once were. You can easily research destinations and the best deals for flights and hotels on your own. In some cases, they can get you a discount you may not be able to secure on your own, so some people still use them, but their numbers are dwindling. A lot of manufacturing roles have continued to be displaced over the years. Everything from auto manufacturing to warehousing has seen its share of worker displacement and this trend will continue. Usually it’s a simple calculus of the cost and efficiency of human capital versus machine capital. Can a robot do it more quickly and with fewer errors? Can a robot displace enough humans to offset the upfront capital expense and continued maintenance? When the answer is yes, businesses make the shift.  Often times, a stimulus program or government tax incentive includes special capital depreciation rules, tax credits, and other business expansion incentives.  Robots and automation are often the result.  In a way, the government is incentivizing this shift.

Why Robots Could be a Positive for US Employment

You might question how displacement of US jobs could possibly be a positive. Well, for the same reason every other low-skill job that was displaced in the past has ended up being a new positive for the country. It is alarming that worker displacement is moving further and further up the continuum in terms of worker skills (i.e. experienced, skilled plant technicians and traders with decades of experience are being displaced), but the net effect is a positive. A primary theme we’re just starting to hear more about this past year is “in-sourcing”. Many companies are starting to shift manufacturing back from China into the US. Why? Well, as robotics can replace the tedious manual work a dozen Chinese migrants were performing in a factory thousands of miles away, now they can enjoy the same cost structure (high up front but lower NPV), a much reduced cycle time, supply chain optimization (avoiding the BS at the ports from striking longshoremen underway again), being closer to the customer (high paying US consumers), lower total landed cost (due to lower distribution and logistics costs), and the ability to shift product lines and new launches more quickly than competitors that continue to rely on offshoring. Often times, the quality is much higher as well.

How could that possibly help US jobs? Well, even though it requires “less” people to run a highly automated facility, it’s still NEW US jobs. And often high paying jobs to boot. I worked in manufacturing for years. I saw my share of shifting from purely manual tasks to automated tasks, but along the way, I learned new skills – everything from a new computer language and programming logic to preparing myself for a job outside the firm in an automated biotech bulk plant or sterile fill facility, since the old days of turning valves manually and loading vials and stoppers under a sterile laminar flow hood are coming to an end. Even though a new facility may be highly robotic, hundreds of jobs are still created for even a basic plant. There are the people who set up and break down a production run, machinists, mechanics, quality control, supervisors, managers, distribution & shipping roles, clerks, software engineers, lawyers, HR and more. If you’re going to have the machines, you need to run them, and then those people need all the infrastructure to support them. These people in turn, frequent local vendors ranging from sheet metal designers to restaurants and gas stations. Bring back a few thousand plants like this due to more efficient robotics and automation and the prosperity spreads. This is not pie in the sky. This is already happening. The better our robotics get, the more jobs come back.

Self-Driving Cars and 3D Printing

I know, you probably think these themes are just gimmicks from Google’s car experience and that printing Lego pieces from a 3D printing device will never have any real-world application. Well, then you’re just as wrong as I was when I thought people would never use their phones as MP3 players, cameras and GPS (while I stubbornly held onto my stock in Garmin). When asked about the deal is with Google’s focus on self-driving cars as a search company, the answer was just an anecdote, but opened my eyes. Google replied that self-driving cars would save millions per year just for their facilities. How? Well, an employee gets dropped off at the front door and walks into work. The car then drives away and parks itself in a cheap lot somewhere a mile away. This would save time for employees and tons of capital costs on garages and parking lots near the campus. This got me thinking about all the applications in cities, how much more efficient traffic flows would be, and more. It would save the economy at large Billions per year. Sure, some limo drivers, bus drivers and truck drivers may lose some jobs. But the net effect to society would be tremendous. 3D printing likewise, could cost manufacturing and retail jobs. After all, perhaps instead of going down to Toys R Us and buying the latest Lego set, you just download a plan from Lego directly (I’m sure pirating would play some role as well) and print your kid a Lego set at home. But imagine all the efficiency that was just gained in that transaction! A saved trip, fewer checkout clerks at stores, lower inventory costs, etc. Outcome is the same – kid has their Lego set. And someday as materials and technology improves, you’ll be able to 3D print virtually anything that isn’t perishable. Well, they’re working on printed replacement organs and food already, but first things first.

The future is here, and if you’re not thinking big, and looking ahead, you’ll be left behind.  And if you do feel your job is at risk, or could be in the future, what are you doing about it?  You should definitely have a pulse check with free weekly emails on high paying job openings in your area through TheLadders.  It’s simple and free to sign up and you can sit back and get recently posted jobs based on your industry, location and salary requirements.  (It’s awesome, I use TheLadders to keep an eye on my industry).

What Are Your Thoughts on Robots and Technology Replacing Humans?

  • For more insight into shifts in the global economy and career tips, check out the Career Category with dozens of similarly themed articles.

{ 24 comments… read them below or add one }

JT December 16, 2012 at 7:04 pm

Even knowledge jobs don’t have much insulation. Cheap computers can essentially brute force any problem. Need a design, system, or plan for something? Input parameters and let the computer think through every single permutation to select the best fit. Sure, it’s not actual intelligence by any means, but it accomplishes the same goal at a faster rate than 10 highly-paid and skilled humans can accomplish.

Machines used to help us do things better, leading to higher pay for people who could use them. Now they’re super user friendly, require little skill from the operator, and effectively replace what a worker was paid to know and do.

Hedge your bets by investing. Own shares in public companies so you have some exposure to the benefits of owning capital rather than being employed to make use of it.

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Darwin December 16, 2012 at 10:31 pm

I’ve seen just in a few jobs where people created their own solutions that used to be manual. This can range from setting optimal potencies for batches and scheduling complex assets in a plant to seeing SAP displace many planning roles. Software is already displacing workers, but then again, they’re creating roles elsewhere to design and implement.

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Investor Junkie December 16, 2012 at 7:52 pm

Computers will never be able to perform high level reasoning. Computers still have to be built and programed by people. We don’t have Skynet.. yet.

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Darwin December 16, 2012 at 10:32 pm

Don’t be so shortsighted! We may be there sooner than you think! Oddly, there are some scientists who want global protocols and political agreement on preventing artificial intelligence from taking over mankind. They figure start earlier rather than when it’s too late.

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Investor Junkie December 16, 2012 at 10:40 pm

AI has been around for years. No program has formally passed the Turning test.

http://en.wikipedia.org/wiki/Turing_test

Computer still, for the most part, do what we tell them to do. They do not have the ability the learn on their own outside of specific domain we program it.

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Darwin December 16, 2012 at 11:13 pm

There are now computers beating grandmasters at Chess and the Jeopardy champs. Drones, Siri, etc. It’s all progressing at breakneck speed. AI will eventually pass the Turing test quite easily.

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Investor Junkie December 16, 2012 at 11:16 pm

Yes, BUT that’s NOT learning. Faster processing does not equal learning. The only we can have true AI is replace the Von Neumann architecture with something else more human like. What that is no one really knows.

Investor Junkie December 16, 2012 at 11:17 pm

The true fact-of-the-matter is we do not fully understand how we learn ourselves.

Kevin @ Invest It Wisely December 16, 2012 at 11:43 pm

Something I’ve found interesting is that some of the insights of evolutionary psychology show that much of what we believe about our own nature (i.e. the blank slate and general-purposeness of our reason, our perception of consciousness) is an illusion. In one sense, the brain is simply a collection of highly-specialized intelligence routines that happen to have been highly adaptive for survival in our past. Much of our success is due to the degree we’ve been able to use these routines to adapt to many different situations and circumstances.

Take language & writing: language arose as an evolutionary adaptation many tens of thousands of years ago (perhaps when homo sapiens appeared hundreds of thousands of years ago), while writing only began quite recently in our history when looking at things on a biological time scale. We’re able to use our ability for language to read & write because we can translate the symbols we see into words that we “hear” in our brains and map this to a language and symbols.

Maybe the key to an intelligent AI lies along similar lines. Nobody really knows, but given enough time, someone will find something that works. Every step brings us a little bit closer every day.

Kevin @ Invest It Wisely December 16, 2012 at 9:52 pm

Awesome post, Darwin! Along with 101 Centavos’ post, this has gotten me thinking. I do think that computers will not only be able to perform high-level reasoning but that they will also one day surpass human brains. So far as we know, the universe is deterministic, and even our brain follows the laws of physics. There’s no real reason to doubt that in a few more decades, we’ll achieve a level of AI where a huge portion of the economy could be automated.

Imagine that when you open the new plant, the drivers, engineers, and so forth, are all run by artificial intelligence. Going a step further, maybe there wouldn’t be a plant because 3D printing is much more efficient by then, so you might even be able to print out things right at home, or at the local 3D print shop if the part is a bit too big. It really isn’t so far-fetched.

Where will be the place for humans in that world? Do we need to have jobs to have self-meaning? The loss of mandatory employment really isn’t a bad thing if it means that time can be freed up for self-actualization. After all isn’t that what many people want? Time to travel and explore? Freedom from the pressure of working an unpleasant job to make ends meet? I just wonder how all of society will cope with such a massive shift in the span of a few decades….

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Darwin December 16, 2012 at 10:34 pm

Well, I’ve read a lot about how improvements in productivity from the farming age through industrial age to present were supposed to give humans more time for leisure, family, etc. The exact opposite has happened. People are working more than ever. Much of this has to do with relative place in society and motivation. Even if you could get by on half your salary and have an extra 20-30 hours a week to yourself, most would choose full salary/full-time work. Humans seek to maximize their income, even when alternatives exist.

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Kevin @ Invest It Wisely December 16, 2012 at 11:34 pm

You could very well be right. It’s hard to visualize what happens after the shift, but then again, it was always like that in every age. One possibility is that we might even become the AI ourself in a symbiosis between life and machine in the future. It’s already happening to some degree, and as we’ve shaped the world over the past 10,000 years, we’ll continue to do so, right down to the cells in our own bodies.

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KaD December 21, 2012 at 10:52 am

That’s only true up to a point. I remember a study wherein people earning over a certain threshold-I think it was around $119,000.00 a year-DID choose to work less.

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krantcents December 16, 2012 at 10:37 pm

I would think that my job is safe as a teacher, but online classes are getting very popular. Since I teach in high school, I think I am safe for the next 5 years when I retire. Things are changing though and I am concerned future generations.

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Darwin December 16, 2012 at 11:14 pm

I’m still not a believer in the whole online learning experience, but it seems to be improving. Perhaps we’ll be there someday as a primary method of learning.

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Jeremy Streich July 16, 2013 at 11:58 am

I believe education is headed the way of inverted classrooms. The lecture is online and done as homework, what was homework becomes classwork so students do more problems in the presence of an expert who can help them when they get stuck and it is fresh, rather than when they can’t remember what they got stuck on the next day.

I also believe that anayltics, split and multi-variant testing will be used to improve lessons and work toward the “optimal” online lecture. I don’t see the need for student teacher interaction to ever go away, but I do see it changing.

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J December 16, 2012 at 10:37 pm

“The spread of computers and the Internet will put jobs in two categories: People who tell computers what to do, and people who are told by computers what to do.” – Marc Andreessen

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Darwin December 16, 2012 at 11:15 pm

Interesting one!

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KaD December 21, 2012 at 10:50 am

There are a hell of alot of people who don’t have the intelligence to program robots-what are all of them supposed to do for jobs? We’ve put enough people out of work. Enough is enough. Just say NO-to robots.

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Investor Junkie December 21, 2012 at 12:47 pm

Yes let’s get rid of other modern inventions. Instead of backhoes we’ll require construction to use shovels instead. Better yet, we’ll require to use spoon. We’ll then have 100% employment.

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Darwin December 21, 2012 at 10:20 pm

Firms in other countries will abide by the same rules as well I’m sure; ya know, because companies don’t compete with each other. We can all rest assured these jobs will come back.

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Ron April 3, 2013 at 10:44 pm

Everyone should have a guaranteed living income, so that if they can’t work, they can live. If this reduces the labor force, it will drive the move to automation and make the US even more more competitive. Emplyers won’t have to worry about hiring people who really don’t want to work.

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Darwin April 4, 2013 at 7:50 pm

hmm, and who should pay for this “guaranteed living income”? the people working? sounds like socialism to me.

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Ali Hangan December 27, 2012 at 8:56 pm

Thanks for this article and there are some interesting comments being made.

It seems to me people want all the products that robots bring us without costing jobs. One cannot have their capitalist cake and eat too!

The advancement of robots and automation in the workplace is not a conspiracy against the American Worker. Innovation in the workplace is profoundly — well — American. The profit motive and competition among producers drives the process of innovation — robots being one outcome of the innovative process.

Businesses are not in business to create jobs. That is what politicians tell the public to get reelected. Businesses are in business to make a profit. Among many — two basic growth strategies are used: Expanding market share and reducing costs. Capital deepening or using robots is a structural means to carry out these two growth strategies.

Businesses have to do what they must do to remain competitive. The fact that the workforce is reduced is part and parcel of reducing costs of doing business. Winning a popularity contest, workers that may not be able to feed their families from losing their jobs or helping the “American Economy” cannot be a consideration when businesses must meet their growth goals that attracts investment and keeps them competitive.

Robots will continue to enter the workplace as long as the forces that drive innovation exist in the capitalist system. Managing the social fall out as workers lose their jobs is an important concern but — do not think that the solutions will come from business.

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