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

bloomberg.com

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

#11

Post by paulpauper »

gech wrote: post #7
60654 wrote: post #4

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 tu…

>labor is purely an expense Unless you expand the view and see that an employee that gets paid has money to participate in the economy and buy your goods. Economics is a sham science.

The savings from automation and outsourcing far exceeds what Apple (a common example) could earn from the increased purchasing power from US Apple employees if some of those employees had slightly more money to buy Apple products. The odds of employees taking their increased wages and ONLY buying your goods, is slim, and this logic does not work for companies such as Boeing , that make products that no possible employee could ever afford.

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

#12

Post by Jabanga »

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/productivit...

This has been the pattern for over 200 years of labour-saving automation:

http://www.economicshelp.org/blog/6717/economics/the-luddite...

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

#13

Post by [deleted] »

colorint wrote: post #6
60654 wrote: post #4

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 tu…

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…

[deleted]

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

#14

Post by paulpauper »

ideonexus wrote: post #5

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 compan…

that's kinda like the fallacy of composition: what is good for the individual, is not always so good for the economy

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

#15

Post by jawns »

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.

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

#16

Post by treyfitty »

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.

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

#17

Post by lurker10000 »

paulpauper wrote: post #8

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:…

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?

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

#18

Post by TimJYoung »

paulpauper wrote: post #11
gech wrote: post #7

Earlier quoted context omitted.

>labor is purely an expense Unless you expand the view and see that an employee that gets paid has money to participate in the economy and buy your goods. Economics is a sham science.

The savings from automation and outsourcing far exceeds what Apple (a common example) could earn from the increased purchasing power from US Apple employees if some of those employees had slightly more money to buy Apple products. The odds of employees taking their increased wages and ONLY buying your goods, is slim, and this logic does not work for companies such as Boeing , that make products that no possible emplo…

You have to keep going and not stop at the first level (for example, who buys airline tickets ?). What you'll find is that, eventually, it all comes back to consumer demand.

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

#19

Post by crusso »

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-awful...

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

#20

Post by neuromancer2701 »

60654 wrote: post #4

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 tu…

I would say that there is at least two type of human labor: humans pretending to be machines and value added labor e.g. R&D/IP generation. Labor that generates IP and new products should not be viewed as a pure expense because there is a return to that expense.

Humans have better things to do than pretend to be machines.

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