On Sun, 24 Apr 2016 18:02:26 -0700, Gunner Asch <
gunne...@gmail.com>
wrote:
The trouble with dismissing this as a problem of excessive wages is
several fold.
Take a look at the claims made by the pitch man from Momentum
Machines, as they appear in that last link:
=====================================================
The issue of machines and job displacement has been around for
centuries and economists generally accept that technology like ours
actually causes an increase in employment.
The three factors that contribute to this are
1. the company that makes the robots must hire new employees,
2. the restaurant that uses our robots can expand their frontiers of
production which requires hiring more people, and
3. the general public saves money on the reduced cost of our burgers.
This saved money can then be spent on the rest of the economy.
=====================================================
This is not actually what economists are saying about automation
today. The cumulative effect of the really large productivity gains
made by integrating IT into manufacturing, for example, have exposed
some weaknesses in those arguments.
For example, point number 1: If the robot company hires new employees,
and the number isn't a lot SMALLER than the number of employees
displaced by the automation, then automating would be a losing
proposition. In the entire supply chain, if you don't reduce the total
number of employees, you haven't cut costs -- you've just added
additional capital costs to the total cost of production.
Regarding number 2: unless they've wound up reducing costs
substantially (see point 1, above), the robotized restaurant, in the
course of "expanding its frontiers of production," has just taken
market share from someone else. There is nothing about the
robotization itself that would expand the total market size, other
than reduced costs. Even that is problematic -- how many hamburgers
can we eat? <g> The problem here is not a shortage of food that the
robotized burger joints will alleviate.
Number 3 is a net benefit. The question becomes, like the question
that arises from the issue of getting cheaper clothing prices from
China, whether the benefit outweighs the cost of lost jobs in the US.
Until recently, it was assumed that the resulting efficiencies would
help stimulate more innovation, new markets, bigger markets nad more
jobs.
Now, there is no consensus among economists on the issue, but most, or
all, recognize that the real result may be a loss if the rate of
increasing productivity outstrips the rate at which we create new
jobs. Just looking at it from the perspective of manufacturing, the
answer appears to be that it does produce a loss of jobs. But
manufacturing is only a small part of our employment these days --
directly, under 9%. So services are taking up all of the slack. We'll
see how much we can innovate and create new, well-paying jobs there.
So far, the new jobs have been paying less than the ones that were
eliminated.
Stay tuned. But don't dismiss the complaints of those striking for
higher wages. Theirs may be a lost cause, but if they stand still, the
cause is lost anyway. The cost of automation keeps declining and it
will be economic for individual companies to replace them with
automation before long, no matter how much we suppress or restrain
wages. That development moves in only one direction and it's moving
fast. Now we are more dependent than ever on innovation that creates
jobs.
--
Ed Huntress