March 3, 2015
WINNING THE WAR ON WAGES:
ROBOTS VS. THE UNDERCLASS : Pundits say automation is decimating the middle class. The truth is even crueler. (JOHN B. JUDIS, 3/03/15, National Journal)
The effects of this first wave on the economy were profound. From 1979 to 2013, U.S. manufacturing employment fell 37 percent, from 19.3 million to 12.1 million. Some of that was due to outsourcing--one study estimates that Chinese-import competition accounted for a quarter of the loss of manufacturing employment between 1990 and 2007--but a great deal of the rest was due to the automation of basic, repetitive factory labor, the kind you would find on an automobile assembly line. Indeed, largely because of automation, American manufacturers today produce far more goods with far less labor than they did just a few decades ago. (Productivity in manufacturing increased 75 percentage points between 1987 and 2007.)The second wave of the automation revolution came in the 1980s. This time, the key change was the introduction of the personal computer, which gradually began to replace lower-level office staff: secretaries, tax-preparers, typesetters, and file clerks.You can see evidence of both waves at companies like Conveyers & Automation--a Towson, Maryland, firm that uses robots to create lights-out packaging facilities for Coca-Cola, Pepsi-Cola, Corning Glass, and other big manufacturers. When I visited recently, what was most striking was not only the way the large yellow robots picked up and put down cans and bottles, but also the fact that at the firm's headquarters, I couldn't spot a single clerical or blue-collar worker.The third wave arrived in the early 1990s with the rise of the Internet. It transformed the distribution as well as the production of goods and services, creating what economist W. Brian Arthur calls a "secondary economy." "Business processes that once took place among human beings are now being executed electronically," Arthur writes. "They are taking place in an unseen domain that is strictly digital." The secondary economy can make financial decisions, do inventory, diagnose illnesses, wage war, regulate electricity use, and sell everything from books to automobiles to machine tools.Amazon began as the archetypical third-wave firm. It sold books and later other goods through the Internet, threatening the existence of bookstores and shopping malls. But it has also become a pioneer in fulfilling the promise of automation's first wave. The company bought Kiva Systems, which produces orange robots the size of ottomans that roam unlit, unheated sections of Amazon's warehouses all day and night, transporting shelves of goods to stations where they are packed and sent off. Amazon won't discuss how much labor these devices have saved, but a manager of Amazon's subsidiary Zappos has estimated that they cut labor in half. Moreover, the robots are supposed to speed up packaging by 400 percent.In all these respects, automation has cut a wide swath through the economy. Like electricity, it's a general-purpose technology; its effects are pervasive and not confined to a single industry. But while it has eliminated the jobs of clerical staff at firms like Conveyors & Automation, as well as the jobs of workers who used to scurry around Amazon warehouses grabbing packages off shelves, automation has not eliminated mid-skill, median-wage, middle-class positions.That, at least, is the conclusion now drawn by MIT's Autor and by two researchers at Oxford, Carl Benedikt Frey and Michael A. Osborne. In a presentation last summer to the Federal Reserve Bank of Kansas City, Autor, drawing on categories he had developed earlier with Harvard's Frank Levy and Richard Murnane, set out the ways that automation has eliminated, added, modified, or left untouched various jobs. His categories (which I'll use with minor variations) provide a useful way to see how automation has changed rather than destroyed the middle class.First, there are the parts of the economy where automation has supplemented the human role--but not made it obsolete. These occupations fall into roughly three categories: complex abstract tasks (surgeons, dentists, lawyers, engineers, scientists, editors, architects, stock brokers, loan officers, therapists, school teachers, sales representatives, and a bevy of different kinds of technicians, especially in health care); jobs involving nonroutine personal interactions (specialized store clerks and technical-support personnel, home health aides, personal trainers, police, paramedics, and firefighters); plus those skilled crafts that cannot easily be reduced to routine instructions and now often require computer training (computer, utility, or telecommunications repair personnel, truck drivers, pilots, electricians, mechanics, and machinists).Of course, some of these occupations may eventually fall victim to automation. Google, for instance, has developed a driverless car that could eventually be used to transport goods. But for now, none of these jobs are likely to be eliminated by technology.So what jobs are in danger? Autor defines them as "routine tasks ... that follow an exhaustive set of rules and hence are readily amenable to computerization." These include low-level clerical and secretarial work, rule-driven interpersonal encounters at banks, stores, and anywhere tickets are sold, and much blue-collar work in factories and warehouses.In other words, the occupations that are safe from automation are all over the map in terms of income and education level--ranging from home health aides to telecom repair personnel to surgeons.
So much done, so much yet to do.
Posted by Orrin Judd at March 3, 2015 3:45 PM
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