It sounds grossly counterintuitive – taking away jobs via automation and robotics leading to more jobs and lower unemployment?
There is evidence, however that shows increasing productivity leads to more wealth, cheaper goods, more spending and ultimately more jobs.
The Bank Teller Question
For example, in the 1970s automated teller machines arrived and it was assumed that would result in the loss of hundreds of thousands of teller jobs. In fact, since then the number of human bank tellers in America has more than doubled.
What happened is this: The spread of automated teller machines (ATMs) meant banks could be smaller and cheaper to open. As a result, banks opened more branches and eventually employed even more tellers than before.
Displacement Does Happens
In other cases, the loss of jobs in one area, agriculture or manufacturing. In those cases, jobs are created in other areas. Or in managing other parts of that sector or even creating the machines themselves.
In 1900 40% of all workers in the U.S. had jobs in agriculture. Today it’s less than 2%. Manufacturing jobs have declined as well. Society, as a whole, is better off.
More Training And Retraining Needed
Some experts suggest the problem is not mass unemployment, but rather transitioning people from one skill set to another. Solving this problem may involve completely upsetting the education system, mandating education including vocational training beyond high school.
This is what happened when America moved from an agricultural-based economy to one based on manufacturing. That began the rise of the high school movement at a time when making it through 8th grade was considered a full and complete education.
Automation Is Here To Stay
Whether it’s from Amazon.com’s (NASDAQ:AMZND) new Amazon GO grocery stores that don’t utilize checkouts or checkout clerks, Panasonic’s self-bagging machines now being tried in convenience stores or McDonald’s Corp. (NYSE:MCDC) self-service sandwich kiosks, the age of automation is here.
Humans are also here to stay. Humans are needed to take orders, maintain machines, provide customer service and perform other tasks. As a recent research report by McKinsey suggests, “As the automation of physical and knowledge work advances, many jobs will be redefined rather than eliminated—at least in the short term.”
Others In Automation Mode
Other companies experimenting with automation include Lowe’s Companies Inc. (NYSE:LOWC) which is testing bots in its chain of hardware stores, Best Buy Co. Inc. (NYSE:BBYB), testing a yellow robot named Chloe in its Manhattan location and even a futuristic hotel chain called Yotel that uses robots to carry guests’ bags and clean rooms.
Not that anyone should get too worried too soon. All of these examples and more involve testing locations, not widespread use. It will take some time before automation is widespread enough to be the rule and not the exception.