14 ms·

More Robots, Fewer Jobs: capital vs. labor in production

108 points by drtillberg 9y ago

HillaryBriss 9y ago
interestingly, the most intense clusters of robots are in Michigan, Delaware and Texas. by contrast, there's not so much robotic clustering in California. also, this optimistic note: Some of the sectors with the biggest job losses were ones that didn't automate intensively, like textiles and paper products. That goes to show that keeping out robots won't necessarily protect your job.
- otoburb 9y ago
  >>also, this optimistic note [...] "Folks, would you like the rock, or the hard place?"
- coredog64 9y ago
  How much manufacturing happens in California? Of that manufacturing, how much has been started in the last 20 years, and how much is left over from when the regulatory regime was more friendly to manufacturing?
- neuromantik8086 9y ago
  It makes sense to me. Historically, a lot of America's manufacturing has been either around the Great Lakes (i.e., the Rust Belt) or the mid-Atlantic / Georgia (i.e., where manufacturing went after those states were able to undercut the Northeast / midwest on labor costs). I've never really thought of California as a major manufacturing hub.
- robotresearcher 9y ago
  > there's not so much robotic clustering in California. Software is more profitable. Why get into a worse business when you dominate a better one?
- gaius 9y ago
  Californian labour-intensive industries use undocumented workers, they're cheaper thsn robots.
60654 9y ago
Glad to see they're framing as a capital/labor question, because there are additional important considerations about robots replacing labor, in addition to increased productivity: 1. Robots are capital, and therefore investment, while labor is a pure expense. Capital will generate income that can be reinvested back into more capital etc, generating more wealth for the owner, and they can sell those robots later to turn that investment liquid. But labor is purely an expense, and the money that a manufacturer pays to employees is wealth that they've transferred elsewhere, it doesn't compound, and it can't be owned and controlled like capital can. 2. In terms of taxation, governments in Europe and US tend to: 1. Tax labor relatively heavily (income taxes), 2. Tax capital gains relatively lightly, and 3. Do not tax capital ownership as such. So it's rational for capital owners to try to replace labor with capital if it can perform the same tasks - with tragic effects for labor. Following Piketty, it seems to make sense to introduce a small but nonzero tax on the ownership of capital (not just on capital gains at the time of a sale) to offset these changes.
- colorint 9y ago
  The arguably more important issue is that spending is income, in both directions. Wages are an expense to companies, but revenue to workers---and likewise, buying goods is an expense to workers and revenue to companies. Those two factors have to be relatively balanced; if you bias too far in favor of capital, you kill growth because you cut off demand for goods. And hoisting ever-increasing debt on workers only works for so long. This is probably where people start talking about universal basic income, but that runs into a different problem: if you bias income too much to labor, investment can't keep up with the increasing demand and you get accelerating inflation. So there's a tricky control systems problem here (and I prefer the job guarantee for its control theoretic formulation) that gets swept under the rug in favor of dogma about free markets or what have you.
  - deleted 9y ago
    [deleted]
  - dv_dt 9y ago
    > And hoisting ever-increasing debt on workers only works for so long. I think you are underestimating the capacity for greed as well as the effect of globalization. Even if whole nations of workers are eviscerated, it is possible to sit in comfort and growing your wealth and power with little regard to the balance or even efficiency of the overall system.
ideonexus 9y ago
While the scope of the article is confined to manufacturing, which impacts less-specialized labor, I felt a sense of dread reading it for what it means for people losing their jobs to software. Fresh out of college in the late 1990s, one of my first "high tech" jobs was manually building HTML pages for job listings, copying-and-pasting advertisements from word documents all day long. One day, I recommended the company contract a programmer-friend of mine to automate the process and two weeks later I was looking for work--my job replaced by a script that ran a few minutes every morning. Over the years I've watched various professions devalued to search engines and spreadsheets, from paralegals to accountants. I don't think it's a bad thing. It's progress and it's freeing up time. The bad part is that we live in a society with an antiquated work-ethic, where your value is measured in capital and the number of hours you put in each week at your job. Automation isn't the problem, living is a culture incapable of valuing leisure time is what needs to change.
- paulpauper 9y ago
  that's kinda like the fallacy of composition: what is good for the individual, is not always so good for the economy
  - ThomPete 9y ago
    And vice versa
- YPCrumble 9y ago
  Your first job sounds similar to that of the worker in the pin factory in Adam Smith's Wealth of Nations. Later on he describes the "torpor of the mind"[1] that you must have felt doing all that copy/pasting. Smith's argument at the end of the same passage and throughout the WoN is that government intervention and regulation is necessary to avoid the societal decay that the invisible hand of capitalism can produce. Specifically he suggests government-sponsored education as the best solution to the problem. [1] http://www.pitt.edu/~syd/ASIND.html http://www.pitt.edu/~syd/ASIND.html
- grecy 9y ago
  > Automation isn't the problem, living is a culture incapable of valuing leisure time is what needs to change Leave North America, it's a whole new world(TM) I recently read "A Year of Living Danishly"[1] - an amazing account of two early-30s brits who move to Denmark and learn how life works there. After an adjustment period, they are floored, and I mean absolutely floored how good the work/life balance is. They are shocked their old life they loved can seem so horrible in comparison. I asked my Danish friend about it, and he said "Yeah, I like living in a country that focuses on being happy rather than focusing on getting money." [1] https://www.amazon.com/dp/1785780239/?tag=roadchoseme-20 https://www.amazon.com/dp/1785780239/?tag=roadchoseme-20
paulpauper 9y ago
Detroit lost so many jobs, not because of robots, but due to the decline of the domestic auto manufacturing industry. The modern auto assembly line, which uses human-assisted robots, existed a couple decades before Detroit's precipitous decline. The Detroit riots during the 60's and 'capital flight' also didn't help. The argument of robots destroying jobs, imho, has a lot of holes ..the hysteria seems overblown http://greyenlightenment.com/why-robots-wont-take-all-the-jobs/ http://greyenlightenment.com/why-robots-wont-take-all-the-jo... The printing press put scribes out of work, but then the entire publishing industry exploded.
- lurker10000 9y ago
  Many people (including me) believe the problem isn't overblown. A common counterargument to your point is that humans have always had the ability to do work at higher abstraction levels than the machines replacing them. Scribes become unemployed but can retrain as typographers, press operators, digital layout artists and so on. The problem comes when robots begin to perform these higher order tasks. What happens to individuals when they have no "higher" place to move into? What happens to society when automated replacement becomes commonplace?
  - bduerst 9y ago
    Jobs are not zero sum - the demand for labor is a function of supply. People will begin to fill more niche and variable-demand jobs where capital investments don't make sense, i.e. a shift towards a consultant economy. Keep in mind that the specifics of this is very hard to predict. A large number of the jobs we have today would have seemed absurd 20-40 years ago, but to us they feel like they were inevitable.
    - petra 9y ago
      What popular jobs.that we have today would seem absurd 20-40 ago ,for someone.with an eye into.the future , say a science fiction writer?
      - 9y ago
Jabanga 9y ago
Industries that lose jobs due to automation cause job growth in more slowly automating industries: http://www.vox.com/new-money/2016/10/24/13327014/productivity-paradox-innovation-growth http://www.vox.com/new-money/2016/10/24/13327014/productivit... This has been the pattern for over 200 years of labour-saving automation: http://www.economicshelp.org/blog/6717/economics/the-luddite-fallacy/ http://www.economicshelp.org/blog/6717/economics/the-luddite...
- djschnei 9y ago
  Unfortunately, this myopia is and will always be perennial. I think in large part it's a misunderstanding of what the goal of an economy should be; many think it's maximum employment - it's not. Maximum employment is a side effect of a healthy economy, not the goal. The goal of an economy should be maximum productivity. When maximum employment is the priority, you tend to get less of everything. It's a subtle difference, but with it comes an unbelievably strong basis for misunderstanding. Would the economy be better off if we replaced excavation equipment with spoons? Surely this would create tons of excavation jobs, but would the effect ripple outwards past that specific job type? Would it be a positive ripple or a negative ripple? It's a ridiculous hypothetical, but accurately illustrates the point.
  - jstanley 9y ago
    "The economy" shouldn't have a goal. The economy consists of individuals, who all have individual goals, which may or may not align with each other. But "the economy" as a whole should have no goal. It's like asking what the goal of "nature" should be. Nature consists of individuals who have their own goals, but nature has no goals of its own.
    - djschnei 9y ago
      Economic systems and theories are absolutely devised with goals. Entirely agree the economy is nothing but individuals, that's why capitalism is so ingenious, but that doesn't mean the system doesn't have a goal.
jawns 9y ago
I live in the Wilmington, Delaware, area which, according to this article, is the East Coast hotbed of robots-replacing-workers. Our liabilities, in terms of industries ripe for automation, include the chemicals sector (DuPont is headquartered here and is our largest for-profit employer) and the pharmaceuticals sector (AstraZeneca is our third largest for-profit employer). We also used to have several large auto manufacturing plants, but they all shut down during the study period, and those displaced workers struggled to find new jobs. Nevertheless, the unemployment rate has more or less reflected the larger U.S. rate, which has slowly dropped since the Great Recession. Obviously, a lot of people in the software industry are worried about what will happen if their jobs become automatable. I just heard a talk at the Open Data Science Conference that addressed this worry, and the speaker's basic point was that the people who are most at risk are those who are resistant to change, or who can't cope well with change. Robots and automated processes are still very much in the "highly capable of performing task X" stage. So, while you can construct a specialized robot that's very good at doing one particular thing, we humans remain the supreme generalists. That may one day change, but for now, automation, by and large, replaces tasks, not people. Granted, if you're a person who only knows how to do a handful of tasks, then you're at risk. But if you are able to change and adapt to new tasks that aren't (or aren't yet) automatable, then you'll be able to continue to stay ahead of the automation wave. At least, for a good long while.
- neuromantik8086 9y ago
  My blue-collar cousin works for one of the companies that is responsible for at least some of the automation in the states that the article highlights. When asked about the workers at these factories at a family gathering, his response was to advocate that these workers pursue more education, which I think echoes your point- the more knowledge you have that you can recombine in new and creative ways, the less likely you are to suffer in the long-term.
  - jawns 9y ago
    You bring up a good point, that education and retraining is often a part of the process. And the more I think about it, there are probably a good number of workers affected by or at risk of being replaced by automation, and they are not necessarily resistant to change -- but they might not have the resources to pursue the retraining and education that would help them pick up the skills necessary to adapt.
treyfitty 9y ago
The stark job loss by industry infographic is quite somber, across those manufacturing industries. Everyone likes to quip "Relevance: gotta retrain to remain" when it comes to automation, but people fail to realize the implicit costs of doing so at an individual level (the time commitment and energy required to face this anxiety all the time). The rate of "innovation" has grown so fast, that we may very well be at a place where your retraining itself may not be relevant by the time you are finished being retrained. Robots are meant to serve one purpose- cost reduction. It was the case that Robots replaced monotonous tasks, but it just seems like that inchoate stage in robotics is over. Software seems to be aimed directly at doing much more than that- It's not a coincidence that Artificial Intelligence and Machine Learning are both trendy right now and revolve around "thought" in their respective monikers. Once these data scientist achieve their goals... what's next? Won't they be replaced by metarobots too? A traditional supply and demand framework doesn't apply here where retraining to meet the demand is the solution to one's labor woes- it just defers the problem until the next "retraining." I don't have a solution, but we should remain vigilantly aware what the end goal in Robotics is: Providing capitalists with more ways to accumulate capital, at the expense of our labor.
- VLM 9y ago
  "at an individual level" And the irrelevance at the large scale. General life advice is not to mix micro-economic problems and solutions with macro-economic problems and solutions. Obviously on a micro-individual layer, if the bottom 90% are getting fired, getting yourself into the top 10% cognitive elite is quite useful. Its also completely useless as macro-economic societal level advice, there's no point telling the bottom 90% getting fired that they should all work harder to be one of the 1 in 10 still employed. This is aside from the problem of most of the people IRL giving advice to retrain just coincidentally happen to have a financial interest in signing up as many retrainers as possible, or in calming the masses into not rolling the guillotine out yet because of those fantastic retraining benefits. On a large scale as the job cognitive requirements increase over time, eventually you'll reach a limit where most of the community doesn't have the cognitive power to determine who's a retraining scammer and who's legit at which point the confidence-job scam collapses. Arguably we're pretty close to that with higher education right now, we are at the point now of investing trillions of loans and a tenth of young peoples productive lives into an end result of poverty stricken baristas, waiters, and NEETs, which can only go on so long before the plug is pulled on the system. What do I as a taxpayer get out of spending my tax dollars so my waitress was able to obtain her unusable education degree? It certainly doesn't make her a better waitress.
crusso 9y ago
Wasn't there an article the other day on HN[1] regarding how we're nearing "Full Employment"? How does that comport with the notion that somehow our increased automation is eliminating jobs? Shouldn't we see a trend of higher unemployment as we continue to automate? The Bloomberg article seems to focus more on the impact in localized areas, but at the national level, there are reallocations of jobs to new industries. I know that eventually we'll have to contend with automation replacing all jobs that people could reasonably do - but for now, this seems like we're still in the "buggy whip" job displacement territory. [1] https://www.nytimes.com/2017/05/05/upshot/were-getting-awfully-close-to-full-employment.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0 https://www.nytimes.com/2017/05/05/upshot/were-getting-awful...
- ThomPete 9y ago
  The jobs are mostly temp jobs not full time jobs. Bush changed how jobs are defined obama continued that with the result that 95% of jobs created since the financial cricis are temp jobs. This is a big deal in the us as it cuts of access to ex healthcare. Its very grim whats going on.
  - flyingfences 9y ago
    Jobs are still jobs, though. If people are still employed then that means that there are still jobs for people to do.
    - vkou 9y ago
      There are always 'jobs' for people to do. I, for one, would love to have a dozen servants to do everything for me. I'm just not interested in paying them a living wage. Most of those temp jobs do not pay a living wage. They exist because of the largess of either government subsidies for the working poor, the largess of relatives of the working poor, or because said working poor are burning the furniture to keep warm. (And the government will have to bail them out when they reach retirement age.) A job that doesn't, or can't pay a living wage is a net drain on the economy. It expects somebody else to subsidize the person working it.
crdoconnor 9y ago
"Those increases tended to mean fewer jobs. Of course, lots of factors weigh on manufacturing employment. Foreign competition, overvaluation of the dollar and rising productivity all play a big part, too. But even after taking all those other factors into account, Acemoglu and Restrepo still found that additional robots in an area reduces workers and cuts local wages." I'd be interested in seeing (paywall, unfortunately) how they took that into account because the last paper I read with this thesis (Michael J. Hicks and Srikant Devaraj, Myth and Reality, CBER, Ball State U) explicitly did not take those factors into account, and in fact deliberately conflated the effect of offshoring, outsourcing and automation to make their point that automation, not outsourcing was to blame. It's worth noting the exceptionally strong political imperative to blame the effects of trade on automation given the profits involved, the strong desire of business to continue to engage in labor arbitrage & maintain cross continental supply chains. This makes automation a critical scapegoat. More likely is that the rate of automation-related job destruction (which is about 400 years old, not 10 years old) and automation-related job creation (ditto) hasn't changed over the years, it's just that low skill technology related job creation has been moved abroad to arbitrage the wage differential and is assumed out of this study's model (correct me if I'm wrong). For example, those million odd people working at Foxconn making iPhones are likely not counted in this study as jobs that "could have been created in America, but weren't" even though that's exactly what they were.
msluyter 9y ago
For a mathy discussion related to this topic, I ran across this interesting and depressing paper a while ago: http://www.danielsusskind.com/research http://www.danielsusskind.com/research The depressing conclusion: " In a static model, increasingly capable machines drive down relative wages and the labour share of income and force labour to specialise in a shrinking set of tasks. In a dynamic version of the model, labour is driven out the economy at an endogenously determined rate, forced to specialise in a shrinking set of types of tasks, and wages steadily decline to zero."
j2bax 9y ago
With the looming take over of the robots, why is the fast food industry still largely meat powered? I would think these establishments at their scale, would be ripe for automation, yet they aren't. Are humans still cheaper in this particular industry?
- imglorp 9y ago
  Not for long: automation gets ever cheaper while compensation goes up. I envision a fast food store, or even Walmart for that matter, as a large mostly meatless vending machine.
- zdragnar 9y ago
  meat power has one advantage in the customer service industry (including fast food): robots aren't great at customer service. People are accustomed to being able to talk to another person. With the rise of the $15 minimum wage movement, a number of chains are experimenting with replacing some or most of their employees with automated kiosks and other devices. As they become less novel, and as wages continue to rise, expect there to be fewer fast food jobs available. It is a minor inevitability; I've seen burger assembly robots that will make, from raw ingredients (including the ground meat) burgers in a handful of minutes. The only human intervention needed is refilling ingredient hoppers and cleaning. Once people get used to not seeing so many other humans behind the counter, and the capital outlay to buy / rent / install the machines goes down (at least, relative to wages) they are likely to be much more widespread.
  - j2bax 9y ago
    >I've seen burger assembly robots that will make, from raw ingredients (including the ground meat) burgers in a handful of minutes. Exactly this. A machine could make a far superior product in a fraction of the time for less money (at quantity). I worked at McDonalds through college, and I remember people (including myself) letting the pre-cooked hamburgers sit in the warming bins for hours passed the time they were supposed to. Gross! At a minimum, I can't see why everything in the prep-area wouldn't already be automated. I imagine there'd be far less waste as well with everything being stored in a pre-cooked temperature controlled manner until the customer orders it. I wonder how long it would be before McDonalds followed suit if someone with the capital built a competing shop that automated to the max and made a superior product for a competitive price.
jimhefferon 9y ago
That's the worst-fitting line of best fit I can recall seeing outside of a classroom.
rukittenme 9y ago
Everything old is new again. We have thousands of years of documented history describing our ancestors using highly advanced, labor-saving machines -- human beings and animals. I wonder why this situation is any different from the rest of recorded human history.
- chroem- 9y ago
  Because only a select few have access to these new machines, and everyone else is at their mercy. If everyone had the capital to buy their own industrial robots and automation technology, then this would be a non-issue. However the reality is that we have to cross our fingers that the captains of industry will play nice.
robotresearcher 9y ago
This seems to be a popular concern right now. But consider that right now we have: 1. Employment very near record highs. 2. More automation than ever before. Automation has been increasing monotonically since the Industrial Revolution. Employment levels go up and down, but have been very low, particularly in the US, for the last hundred years. Maybe something very new is happening. But it usually isn't.
Animats 9y ago
There's a 90-year old book on this, "Chapters on machinery and labor".[1] This analyzes three industries drastically changed by new machinery - printing, glass bottle making, and stone planing. - Printing was the "good case". Before the Linotype, typesetting was a very slow process, with people picking type slugs from a case one letter at a time. The Linotype had a keyboard and ran as fast as the operator could type. This made shorter-run print jobs and thicker newspapers practical. Printing, and employment in the printing trades increased substantially. - Glass bottle making was the "production way up, wages down" case. Bottle making by hand glassblowing required a skilled team of about six people working in close coordination, manipulating molten glass and molds. It took years to get good at this. Bottles were expensive. Once an automatic bottle making machine was developed, it took a semi-skilled machine tender to feed the machine and take the bottles away. The skilled trade was destroyed. Bottle cost went down, production went up, and wages went down. - Stone planing was the "almost everybody gets fired" case. Brick houses used to have stone lintels over doors and windows. These were chiseled flat by people with big hammers, big chisels, and big muscles. Then a machine for planing stone flat was developed. This was much faster and cheaper. But the size of the stone lintel market was determined by the rate of house construction, and cheaper lintels didn't affect that much. So almost all workers lost their jobs. Those are still the ways automation plays out. [1] https://www.amazon.com/Chapters-Machinery-Labor-George-Barnett/dp/067473064X https://www.amazon.com/Chapters-Machinery-Labor-George-Barne...
contingencies 9y ago
Article is US focused. For a global perspective see https://futurism.com/un-report-robots-will-replace-two-thirds-of-all-workers-in-the-developing-world/ https://futurism.com/un-report-robots-will-replace-two-third... and the original UN report at http://unctad.org/en/PublicationsLibrary/presspb2016d6_en.pdf http://unctad.org/en/PublicationsLibrary/presspb2016d6_en.pd...
jgalt212 9y ago
Automation is being over-invested in because of ZIRP. It's very easy to borrow money to invest in plant and equipment. It's very hard to borrow money just to hire more workers. The Fed has f'd over the workers with ZIRP.
dmccunney 9y ago
The key statement in the article is the last: "Bottom line: Robots do replace workers. On the other hand, some industries that don't automate end up losing workers anyway, because their costs are too high and their customers go elsewhere. For workers, robots are only part of the problem." There are several key underlying points: 1. Work flows to where it can be done cheapest. It always has. 2. Value is relative. Something is worth what someone else will pay to have it done. That includes the worker's labor. Large numbers of workers are currently being told "What you do isn't worth what you want to be paid to do it.", as jobs relocate or get automated out of existence. 3. Supply and demand rules. When demand is high and supply is low, prices are high. As supply increases, prices drop. 4. Everyone wants the best deal they can get. Work flowing elsewhere has been going on for a very long time. Before automation and robotics came along, and work had to be performed manually by human workers, employers had incentives to locate where the work was done in places with lower labor costs. Locating in non-union areas was a first step. Moving offshore was next. (Ask what used to the the International Ladies Garment Worker Union about it.) China bootstrapped itself from Third World agrarian nation to First World industrial power by leveraging low labor costs. The moved peasants off the farm to the cities to become an industrial workforce. Unlike the experience of Russia which did the same thing under the Bolsheviks after the Russian Revolution, coercion wasn't needed. Those factory jobs had better hours, better working conditions, and paid better than being a peasant on the farm. People migrated en mass to get those jobs. Chinese workers got paid a fraction of what Western workers would get for the same jobs, but it cost far less to live in China. Those factory jobs were a step up for those who had them. But China is suffering from its own success. The supply of peasants on the farm is drying up, manufacturers must compete for labor, pay is rising in consequence, and China is no longer the low cost producer. A major Chinese manufacturer announced a full court press into robotics a while back in consequence. The inflection point we see now is that higher level jobs than assembly line worker can be and are being automated, and "knowledge work" is flowing to places where it can be done cheaper, with outsourcing an increasingly common practice. And "everyone wants the best deal they can get" is a driver. Unless you are one of the one tenth of one percent who doesn't care what something costs, you are probably on a budget. You have fixed costs you must pay, like rent and food, and variable costs come out of what's left of your income. The Internet provides all sorts of tools for locating the best deals, and price will be a factor. It may not be the only factor on which you make a purchase decision, but all else being equal, lower price wins. So outfits who make things or provide services have a strong interest in reducing costs to be able to provide lower prices, and lowering labor costs is a goal. The fact that we can get many things cheaper than we used to is a consequence of the factors mentioned above. A question I normally ask folks who want jobs returned to the US is "How much more are you willing to pay for what you buy to see that happen? You will pay more." I don't normally get meaningful answers. Complaints about immigration that reduce to "Those <whatevers> will work cheaper than I do and take my job!" raise similar issues. The people who want to buy whatever you make or do are on a budget just like you are. If the immigrant you worry about can do the job as well as you can and will charge less to do it, explain why they should pay you more? What's in it for them? I don't have pat answers to the problem of job loss. I just think we aren't asking the right questions. ______ Dennis

108 points by drtillberg 9y ago

interestingly, the most intense clusters of robots are in Michigan, Delaware and Texas. by contrast, there's not so much robotic clustering in California. also, this optimistic note: Some of the sectors with the biggest job losses were ones that didn't automate intensively, like textiles and paper products. That goes to show that keeping out robots won't necessarily protect your job.

otoburb 9y ago
>>also, this optimistic note [...] "Folks, would you like the rock, or the hard place?"
coredog64 9y ago
How much manufacturing happens in California? Of that manufacturing, how much has been started in the last 20 years, and how much is left over from when the regulatory regime was more friendly to manufacturing?
neuromantik8086 9y ago
It makes sense to me. Historically, a lot of America's manufacturing has been either around the Great Lakes (i.e., the Rust Belt) or the mid-Atlantic / Georgia (i.e., where manufacturing went after those states were able to undercut the Northeast / midwest on labor costs). I've never really thought of California as a major manufacturing hub.
robotresearcher 9y ago
> there's not so much robotic clustering in California. Software is more profitable. Why get into a worse business when you dominate a better one?
gaius 9y ago
Californian labour-intensive industries use undocumented workers, they're cheaper thsn robots.

60654 9y ago

Glad to see they're framing as a capital/labor question, because there are additional important considerations about robots replacing labor, in addition to increased productivity: 1. Robots are capital, and therefore investment, while labor is a pure expense. Capital will generate income that can be reinvested back into more capital etc, generating more wealth for the owner, and they can sell those robots later to turn that investment liquid. But labor is purely an expense, and the money that a manufacturer pays to employees is wealth that they've transferred elsewhere, it doesn't compound, and it can't be owned and controlled like capital can. 2. In terms of taxation, governments in Europe and US tend to: 1. Tax labor relatively heavily (income taxes), 2. Tax capital gains relatively lightly, and 3. Do not tax capital ownership as such. So it's rational for capital owners to try to replace labor with capital if it can perform the same tasks - with tragic effects for labor. Following Piketty, it seems to make sense to introduce a small but nonzero tax on the ownership of capital (not just on capital gains at the time of a sale) to offset these changes.

colorint 9y ago
The arguably more important issue is that spending is income, in both directions. Wages are an expense to companies, but revenue to workers---and likewise, buying goods is an expense to workers and revenue to companies. Those two factors have to be relatively balanced; if you bias too far in favor of capital, you kill growth because you cut off demand for goods. And hoisting ever-increasing debt on workers only works for so long. This is probably where people start talking about universal basic income, but that runs into a different problem: if you bias income too much to labor, investment can't keep up with the increasing demand and you get accelerating inflation. So there's a tricky control systems problem here (and I prefer the job guarantee for its control theoretic formulation) that gets swept under the rug in favor of dogma about free markets or what have you.
- deleted 9y ago
  [deleted]
- dv_dt 9y ago
  > And hoisting ever-increasing debt on workers only works for so long. I think you are underestimating the capacity for greed as well as the effect of globalization. Even if whole nations of workers are eviscerated, it is possible to sit in comfort and growing your wealth and power with little regard to the balance or even efficiency of the overall system.

ideonexus 9y ago

While the scope of the article is confined to manufacturing, which impacts less-specialized labor, I felt a sense of dread reading it for what it means for people losing their jobs to software. Fresh out of college in the late 1990s, one of my first "high tech" jobs was manually building HTML pages for job listings, copying-and-pasting advertisements from word documents all day long. One day, I recommended the company contract a programmer-friend of mine to automate the process and two weeks later I was looking for work--my job replaced by a script that ran a few minutes every morning. Over the years I've watched various professions devalued to search engines and spreadsheets, from paralegals to accountants. I don't think it's a bad thing. It's progress and it's freeing up time. The bad part is that we live in a society with an antiquated work-ethic, where your value is measured in capital and the number of hours you put in each week at your job. Automation isn't the problem, living is a culture incapable of valuing leisure time is what needs to change.

paulpauper 9y ago
that's kinda like the fallacy of composition: what is good for the individual, is not always so good for the economy
- ThomPete 9y ago
  And vice versa
YPCrumble 9y ago
Your first job sounds similar to that of the worker in the pin factory in Adam Smith's Wealth of Nations. Later on he describes the "torpor of the mind"[1] that you must have felt doing all that copy/pasting. Smith's argument at the end of the same passage and throughout the WoN is that government intervention and regulation is necessary to avoid the societal decay that the invisible hand of capitalism can produce. Specifically he suggests government-sponsored education as the best solution to the problem. [1] http://www.pitt.edu/~syd/ASIND.html http://www.pitt.edu/~syd/ASIND.html
grecy 9y ago
> Automation isn't the problem, living is a culture incapable of valuing leisure time is what needs to change Leave North America, it's a whole new world(TM) I recently read "A Year of Living Danishly"[1] - an amazing account of two early-30s brits who move to Denmark and learn how life works there. After an adjustment period, they are floored, and I mean absolutely floored how good the work/life balance is. They are shocked their old life they loved can seem so horrible in comparison. I asked my Danish friend about it, and he said "Yeah, I like living in a country that focuses on being happy rather than focusing on getting money." [1] https://www.amazon.com/dp/1785780239/?tag=roadchoseme-20 https://www.amazon.com/dp/1785780239/?tag=roadchoseme-20

paulpauper 9y ago

Detroit lost so many jobs, not because of robots, but due to the decline of the domestic auto manufacturing industry. The modern auto assembly line, which uses human-assisted robots, existed a couple decades before Detroit's precipitous decline. The Detroit riots during the 60's and 'capital flight' also didn't help. The argument of robots destroying jobs, imho, has a lot of holes ..the hysteria seems overblown http://greyenlightenment.com/why-robots-wont-take-all-the-jobs/ http://greyenlightenment.com/why-robots-wont-take-all-the-jo... The printing press put scribes out of work, but then the entire publishing industry exploded.

lurker10000 9y ago
Many people (including me) believe the problem isn't overblown. A common counterargument to your point is that humans have always had the ability to do work at higher abstraction levels than the machines replacing them. Scribes become unemployed but can retrain as typographers, press operators, digital layout artists and so on. The problem comes when robots begin to perform these higher order tasks. What happens to individuals when they have no "higher" place to move into? What happens to society when automated replacement becomes commonplace?
- bduerst 9y ago
  Jobs are not zero sum - the demand for labor is a function of supply. People will begin to fill more niche and variable-demand jobs where capital investments don't make sense, i.e. a shift towards a consultant economy. Keep in mind that the specifics of this is very hard to predict. A large number of the jobs we have today would have seemed absurd 20-40 years ago, but to us they feel like they were inevitable.
  - petra 9y ago
    What popular jobs.that we have today would seem absurd 20-40 ago ,for someone.with an eye into.the future , say a science fiction writer?
    - 9y ago

Jabanga 9y ago

Industries that lose jobs due to automation cause job growth in more slowly automating industries: http://www.vox.com/new-money/2016/10/24/13327014/productivity-paradox-innovation-growth http://www.vox.com/new-money/2016/10/24/13327014/productivit... This has been the pattern for over 200 years of labour-saving automation: http://www.economicshelp.org/blog/6717/economics/the-luddite-fallacy/ http://www.economicshelp.org/blog/6717/economics/the-luddite...

djschnei 9y ago
Unfortunately, this myopia is and will always be perennial. I think in large part it's a misunderstanding of what the goal of an economy should be; many think it's maximum employment - it's not. Maximum employment is a side effect of a healthy economy, not the goal. The goal of an economy should be maximum productivity. When maximum employment is the priority, you tend to get less of everything. It's a subtle difference, but with it comes an unbelievably strong basis for misunderstanding. Would the economy be better off if we replaced excavation equipment with spoons? Surely this would create tons of excavation jobs, but would the effect ripple outwards past that specific job type? Would it be a positive ripple or a negative ripple? It's a ridiculous hypothetical, but accurately illustrates the point.
- jstanley 9y ago
  "The economy" shouldn't have a goal. The economy consists of individuals, who all have individual goals, which may or may not align with each other. But "the economy" as a whole should have no goal. It's like asking what the goal of "nature" should be. Nature consists of individuals who have their own goals, but nature has no goals of its own.
  - djschnei 9y ago
    Economic systems and theories are absolutely devised with goals. Entirely agree the economy is nothing but individuals, that's why capitalism is so ingenious, but that doesn't mean the system doesn't have a goal.

jawns 9y ago

I live in the Wilmington, Delaware, area which, according to this article, is the East Coast hotbed of robots-replacing-workers. Our liabilities, in terms of industries ripe for automation, include the chemicals sector (DuPont is headquartered here and is our largest for-profit employer) and the pharmaceuticals sector (AstraZeneca is our third largest for-profit employer). We also used to have several large auto manufacturing plants, but they all shut down during the study period, and those displaced workers struggled to find new jobs. Nevertheless, the unemployment rate has more or less reflected the larger U.S. rate, which has slowly dropped since the Great Recession. Obviously, a lot of people in the software industry are worried about what will happen if their jobs become automatable. I just heard a talk at the Open Data Science Conference that addressed this worry, and the speaker's basic point was that the people who are most at risk are those who are resistant to change, or who can't cope well with change. Robots and automated processes are still very much in the "highly capable of performing task X" stage. So, while you can construct a specialized robot that's very good at doing one particular thing, we humans remain the supreme generalists. That may one day change, but for now, automation, by and large, replaces tasks, not people. Granted, if you're a person who only knows how to do a handful of tasks, then you're at risk. But if you are able to change and adapt to new tasks that aren't (or aren't yet) automatable, then you'll be able to continue to stay ahead of the automation wave. At least, for a good long while.

neuromantik8086 9y ago
My blue-collar cousin works for one of the companies that is responsible for at least some of the automation in the states that the article highlights. When asked about the workers at these factories at a family gathering, his response was to advocate that these workers pursue more education, which I think echoes your point- the more knowledge you have that you can recombine in new and creative ways, the less likely you are to suffer in the long-term.
- jawns 9y ago
  You bring up a good point, that education and retraining is often a part of the process. And the more I think about it, there are probably a good number of workers affected by or at risk of being replaced by automation, and they are not necessarily resistant to change -- but they might not have the resources to pursue the retraining and education that would help them pick up the skills necessary to adapt.

treyfitty 9y ago

The stark job loss by industry infographic is quite somber, across those manufacturing industries. Everyone likes to quip "Relevance: gotta retrain to remain" when it comes to automation, but people fail to realize the implicit costs of doing so at an individual level (the time commitment and energy required to face this anxiety all the time). The rate of "innovation" has grown so fast, that we may very well be at a place where your retraining itself may not be relevant by the time you are finished being retrained. Robots are meant to serve one purpose- cost reduction. It was the case that Robots replaced monotonous tasks, but it just seems like that inchoate stage in robotics is over. Software seems to be aimed directly at doing much more than that- It's not a coincidence that Artificial Intelligence and Machine Learning are both trendy right now and revolve around "thought" in their respective monikers. Once these data scientist achieve their goals... what's next? Won't they be replaced by metarobots too? A traditional supply and demand framework doesn't apply here where retraining to meet the demand is the solution to one's labor woes- it just defers the problem until the next "retraining." I don't have a solution, but we should remain vigilantly aware what the end goal in Robotics is: Providing capitalists with more ways to accumulate capital, at the expense of our labor.

VLM 9y ago
"at an individual level" And the irrelevance at the large scale. General life advice is not to mix micro-economic problems and solutions with macro-economic problems and solutions. Obviously on a micro-individual layer, if the bottom 90% are getting fired, getting yourself into the top 10% cognitive elite is quite useful. Its also completely useless as macro-economic societal level advice, there's no point telling the bottom 90% getting fired that they should all work harder to be one of the 1 in 10 still employed. This is aside from the problem of most of the people IRL giving advice to retrain just coincidentally happen to have a financial interest in signing up as many retrainers as possible, or in calming the masses into not rolling the guillotine out yet because of those fantastic retraining benefits. On a large scale as the job cognitive requirements increase over time, eventually you'll reach a limit where most of the community doesn't have the cognitive power to determine who's a retraining scammer and who's legit at which point the confidence-job scam collapses. Arguably we're pretty close to that with higher education right now, we are at the point now of investing trillions of loans and a tenth of young peoples productive lives into an end result of poverty stricken baristas, waiters, and NEETs, which can only go on so long before the plug is pulled on the system. What do I as a taxpayer get out of spending my tax dollars so my waitress was able to obtain her unusable education degree? It certainly doesn't make her a better waitress.

crusso 9y ago

Wasn't there an article the other day on HN[1] regarding how we're nearing "Full Employment"? How does that comport with the notion that somehow our increased automation is eliminating jobs? Shouldn't we see a trend of higher unemployment as we continue to automate? The Bloomberg article seems to focus more on the impact in localized areas, but at the national level, there are reallocations of jobs to new industries. I know that eventually we'll have to contend with automation replacing all jobs that people could reasonably do - but for now, this seems like we're still in the "buggy whip" job displacement territory. [1] https://www.nytimes.com/2017/05/05/upshot/were-getting-awfully-close-to-full-employment.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0 https://www.nytimes.com/2017/05/05/upshot/were-getting-awful...

ThomPete 9y ago
The jobs are mostly temp jobs not full time jobs. Bush changed how jobs are defined obama continued that with the result that 95% of jobs created since the financial cricis are temp jobs. This is a big deal in the us as it cuts of access to ex healthcare. Its very grim whats going on.
- flyingfences 9y ago
  Jobs are still jobs, though. If people are still employed then that means that there are still jobs for people to do.
  - vkou 9y ago
    There are always 'jobs' for people to do. I, for one, would love to have a dozen servants to do everything for me. I'm just not interested in paying them a living wage. Most of those temp jobs do not pay a living wage. They exist because of the largess of either government subsidies for the working poor, the largess of relatives of the working poor, or because said working poor are burning the furniture to keep warm. (And the government will have to bail them out when they reach retirement age.) A job that doesn't, or can't pay a living wage is a net drain on the economy. It expects somebody else to subsidize the person working it.

crdoconnor 9y ago

"Those increases tended to mean fewer jobs. Of course, lots of factors weigh on manufacturing employment. Foreign competition, overvaluation of the dollar and rising productivity all play a big part, too. But even after taking all those other factors into account, Acemoglu and Restrepo still found that additional robots in an area reduces workers and cuts local wages." I'd be interested in seeing (paywall, unfortunately) how they took that into account because the last paper I read with this thesis (Michael J. Hicks and Srikant Devaraj, Myth and Reality, CBER, Ball State U) explicitly did not take those factors into account, and in fact deliberately conflated the effect of offshoring, outsourcing and automation to make their point that automation, not outsourcing was to blame. It's worth noting the exceptionally strong political imperative to blame the effects of trade on automation given the profits involved, the strong desire of business to continue to engage in labor arbitrage & maintain cross continental supply chains. This makes automation a critical scapegoat. More likely is that the rate of automation-related job destruction (which is about 400 years old, not 10 years old) and automation-related job creation (ditto) hasn't changed over the years, it's just that low skill technology related job creation has been moved abroad to arbitrage the wage differential and is assumed out of this study's model (correct me if I'm wrong). For example, those million odd people working at Foxconn making iPhones are likely not counted in this study as jobs that "could have been created in America, but weren't" even though that's exactly what they were.

msluyter 9y ago

For a mathy discussion related to this topic, I ran across this interesting and depressing paper a while ago: http://www.danielsusskind.com/research http://www.danielsusskind.com/research The depressing conclusion: " In a static model, increasingly capable machines drive down relative wages and the labour share of income and force labour to specialise in a shrinking set of tasks. In a dynamic version of the model, labour is driven out the economy at an endogenously determined rate, forced to specialise in a shrinking set of types of tasks, and wages steadily decline to zero."

j2bax 9y ago

With the looming take over of the robots, why is the fast food industry still largely meat powered? I would think these establishments at their scale, would be ripe for automation, yet they aren't. Are humans still cheaper in this particular industry?

imglorp 9y ago
Not for long: automation gets ever cheaper while compensation goes up. I envision a fast food store, or even Walmart for that matter, as a large mostly meatless vending machine.
zdragnar 9y ago
meat power has one advantage in the customer service industry (including fast food): robots aren't great at customer service. People are accustomed to being able to talk to another person. With the rise of the $15 minimum wage movement, a number of chains are experimenting with replacing some or most of their employees with automated kiosks and other devices. As they become less novel, and as wages continue to rise, expect there to be fewer fast food jobs available. It is a minor inevitability; I've seen burger assembly robots that will make, from raw ingredients (including the ground meat) burgers in a handful of minutes. The only human intervention needed is refilling ingredient hoppers and cleaning. Once people get used to not seeing so many other humans behind the counter, and the capital outlay to buy / rent / install the machines goes down (at least, relative to wages) they are likely to be much more widespread.
- j2bax 9y ago
  >I've seen burger assembly robots that will make, from raw ingredients (including the ground meat) burgers in a handful of minutes. Exactly this. A machine could make a far superior product in a fraction of the time for less money (at quantity). I worked at McDonalds through college, and I remember people (including myself) letting the pre-cooked hamburgers sit in the warming bins for hours passed the time they were supposed to. Gross! At a minimum, I can't see why everything in the prep-area wouldn't already be automated. I imagine there'd be far less waste as well with everything being stored in a pre-cooked temperature controlled manner until the customer orders it. I wonder how long it would be before McDonalds followed suit if someone with the capital built a competing shop that automated to the max and made a superior product for a competitive price.

jimhefferon 9y ago

That's the worst-fitting line of best fit I can recall seeing outside of a classroom.

rukittenme 9y ago

Everything old is new again. We have thousands of years of documented history describing our ancestors using highly advanced, labor-saving machines -- human beings and animals. I wonder why this situation is any different from the rest of recorded human history.

chroem- 9y ago
Because only a select few have access to these new machines, and everyone else is at their mercy. If everyone had the capital to buy their own industrial robots and automation technology, then this would be a non-issue. However the reality is that we have to cross our fingers that the captains of industry will play nice.

robotresearcher 9y ago

This seems to be a popular concern right now. But consider that right now we have: 1. Employment very near record highs. 2. More automation than ever before. Automation has been increasing monotonically since the Industrial Revolution. Employment levels go up and down, but have been very low, particularly in the US, for the last hundred years. Maybe something very new is happening. But it usually isn't.

Animats 9y ago

There's a 90-year old book on this, "Chapters on machinery and labor".[1] This analyzes three industries drastically changed by new machinery - printing, glass bottle making, and stone planing. - Printing was the "good case". Before the Linotype, typesetting was a very slow process, with people picking type slugs from a case one letter at a time. The Linotype had a keyboard and ran as fast as the operator could type. This made shorter-run print jobs and thicker newspapers practical. Printing, and employment in the printing trades increased substantially. - Glass bottle making was the "production way up, wages down" case. Bottle making by hand glassblowing required a skilled team of about six people working in close coordination, manipulating molten glass and molds. It took years to get good at this. Bottles were expensive. Once an automatic bottle making machine was developed, it took a semi-skilled machine tender to feed the machine and take the bottles away. The skilled trade was destroyed. Bottle cost went down, production went up, and wages went down. - Stone planing was the "almost everybody gets fired" case. Brick houses used to have stone lintels over doors and windows. These were chiseled flat by people with big hammers, big chisels, and big muscles. Then a machine for planing stone flat was developed. This was much faster and cheaper. But the size of the stone lintel market was determined by the rate of house construction, and cheaper lintels didn't affect that much. So almost all workers lost their jobs. Those are still the ways automation plays out. [1] https://www.amazon.com/Chapters-Machinery-Labor-George-Barnett/dp/067473064X https://www.amazon.com/Chapters-Machinery-Labor-George-Barne...

contingencies 9y ago

Article is US focused. For a global perspective see https://futurism.com/un-report-robots-will-replace-two-thirds-of-all-workers-in-the-developing-world/ https://futurism.com/un-report-robots-will-replace-two-third... and the original UN report at http://unctad.org/en/PublicationsLibrary/presspb2016d6_en.pdf http://unctad.org/en/PublicationsLibrary/presspb2016d6_en.pd...

jgalt212 9y ago

Automation is being over-invested in because of ZIRP. It's very easy to borrow money to invest in plant and equipment. It's very hard to borrow money just to hire more workers. The Fed has f'd over the workers with ZIRP.

dmccunney 9y ago

The key statement in the article is the last: "Bottom line: Robots do replace workers. On the other hand, some industries that don't automate end up losing workers anyway, because their costs are too high and their customers go elsewhere. For workers, robots are only part of the problem." There are several key underlying points: 1. Work flows to where it can be done cheapest. It always has. 2. Value is relative. Something is worth what someone else will pay to have it done. That includes the worker's labor. Large numbers of workers are currently being told "What you do isn't worth what you want to be paid to do it.", as jobs relocate or get automated out of existence. 3. Supply and demand rules. When demand is high and supply is low, prices are high. As supply increases, prices drop. 4. Everyone wants the best deal they can get. Work flowing elsewhere has been going on for a very long time. Before automation and robotics came along, and work had to be performed manually by human workers, employers had incentives to locate where the work was done in places with lower labor costs. Locating in non-union areas was a first step. Moving offshore was next. (Ask what used to the the International Ladies Garment Worker Union about it.) China bootstrapped itself from Third World agrarian nation to First World industrial power by leveraging low labor costs. The moved peasants off the farm to the cities to become an industrial workforce. Unlike the experience of Russia which did the same thing under the Bolsheviks after the Russian Revolution, coercion wasn't needed. Those factory jobs had better hours, better working conditions, and paid better than being a peasant on the farm. People migrated en mass to get those jobs. Chinese workers got paid a fraction of what Western workers would get for the same jobs, but it cost far less to live in China. Those factory jobs were a step up for those who had them. But China is suffering from its own success. The supply of peasants on the farm is drying up, manufacturers must compete for labor, pay is rising in consequence, and China is no longer the low cost producer. A major Chinese manufacturer announced a full court press into robotics a while back in consequence. The inflection point we see now is that higher level jobs than assembly line worker can be and are being automated, and "knowledge work" is flowing to places where it can be done cheaper, with outsourcing an increasingly common practice. And "everyone wants the best deal they can get" is a driver. Unless you are one of the one tenth of one percent who doesn't care what something costs, you are probably on a budget. You have fixed costs you must pay, like rent and food, and variable costs come out of what's left of your income. The Internet provides all sorts of tools for locating the best deals, and price will be a factor. It may not be the only factor on which you make a purchase decision, but all else being equal, lower price wins. So outfits who make things or provide services have a strong interest in reducing costs to be able to provide lower prices, and lowering labor costs is a goal. The fact that we can get many things cheaper than we used to is a consequence of the factors mentioned above. A question I normally ask folks who want jobs returned to the US is "How much more are you willing to pay for what you buy to see that happen? You will pay more." I don't normally get meaningful answers. Complaints about immigration that reduce to "Those <whatevers> will work cheaper than I do and take my job!" raise similar issues. The people who want to buy whatever you make or do are on a budget just like you are. If the immigrant you worry about can do the job as well as you can and will charge less to do it, explain why they should pay you more? What's in it for them? I don't have pat answers to the problem of job loss. I just think we aren't asking the right questions. ______ Dennis