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Robots are killing jobs after all, apparently: One droid equals 5.6 workers

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I can see how "robots improve productivity", in the conventional sense of "economic output divided by input".

How they raise wages, however? They will raise *total* income, because rising productivity implies that much - but as far as I can see, approximately all of that income will go to the people owning the robots. So they will - buy more robots, I guess?

It seems to me that the NBER's research is flawed in that it focuses on certain "sectors" in isolation, without taking into account how they interact with the rest of the economy. But Steve Mnunchin's analysis is even more flawed because it's not an analysis, just a dismissal, and not, so far as we know, based on anything that could actually pass for research or rational thought of any kind.

"Labour market adjustment assitance" sounds like something that gov'ts have been talking about since at least the 1980s. It sounds nice, but in practice it means the government has to identify where (i.e. in what industries) new jobs are going to be created, and they're crap at that kind of prediction.

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I serve as the IT support for a company that would benefit hugely from robots.

The jobs that would be replaced are great jobs for a bunch of guys (they're all guys) with a high school education, reasonably well paid reliable manufacturing jobs. Many of the factory guys have been here for 30 years.

When those jobs are totally automated, where are people like that supposed to find employment? The men I work with have spent their lives in gainful employment, but I wonder what their children and grandchildren will do.

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Devil

jobs aren't entitlements

"When those jobs are totally automated, where are people like that supposed to find employment?"

I guess they better think about retraining, etc..

It's like if you own a business and your products aren't selling. What to do? Cry about it? Gummint bailout?

Typically a business will change its marketing strategy, lower its prices, offer something better, yotta yotta to retain the business and stay alive.

it is the same if you are an EMPLOYEE. YOU are "the business" now. YOU must MARKET your skills, and make them worth paying you for. A job is NOT an entitlement, it is not a right, it is not deserved. It is an exchange of WORK for MONEY, at whatever the market rate is.

In other words, even as an EMPLOYEE, you have a product (your labor) and a price (your wage), and your CUSTOMER (your boss) determines whether or not he wants to PURCHASE your services. The only thing that is owed is the cost of the services rendered.

So yeah, when you think about it THAT way, each person is responsible for his OWN situation when it comes to jobs, etc.. I mean, as a contractor, I deal with that ALL of the time. Why can't EVERYONE ELSE deal with that, too?

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Re: jobs aren't entitlements

I think this has everything to do with the direction of the economy in the future and where it should go. With increased automation very few humans will be needed for production of just about everything. @bombastic bob you sound as though you would be fine with a new to a feudal economy where workers come cheap because they are seldom needed for production and are easily replaced. Most of us will be replaced and have few living wage job prospects if the automation trend continues.

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Re: jobs aren't entitlements

The automation will continue, you can't stop it. At some point there just won't be enough work to do, no matter what retraining you do.

The only solution that will work in the long run is higher corporate taxes, maybe especially high for those with the highest level of automation, and with that money provide a minimum basic income. That will never fly in the US of course, at least not until things hit rock bottom.

But corporations that aren't short sighted should be on board with this plan. You can't have a successful company without customers. And you can't have customers when they don't have any money.

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Re: jobs aren't entitlements

I mean, as a contractor, I deal with that ALL of the time. Why can't EVERYONE ELSE deal with that, too?

What do we call it, when people demand EVERYONE ELSE should be exactly like them? Whatever it is, it's the opposite of what I've always thought of as "American".

Many people don't want to be contractors. They don't have the temperament, the inclination or the skills to "market their skills". And what does "being responsible for your own situation when it comes to jobs etc." mean? "You picked the wrong industry, sucks to be you"?

No, a job is not an entitlement. "Life", however, is - at least according to the founding document of the US. It follows that the one should not depend on the other.

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Pirate

Re: jobs aren't entitlements

no, I just want gummint out of the way, a total "free market" system, and for the SJW's to just STOP it with the "bull-roar". FYI everybody 'works' so all of us are 'workers', even CEOs and bankers. It's why I use the term "employee" because it's not an SJW or Marxist term.

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Anonymous Coward

Re: jobs aren't entitlements

... each person is responsible for his OWN situation when it comes to jobs, etc..

Well said, bob. I could only further suggest that if these people find it hard dealing with their situation, they should just all eat cake.

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Re: jobs aren't entitlements

Sales aren't entitlements. For a start your market has to have some money to buy your shit. If everyone is out of work then you will have to start paying your robots to buy your shit.

And then you might have to pay some taxes so you have roads to deliver your shit on.

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Re: jobs aren't entitlements

> no, I just want gummint out of the way, a total "free market" system,

Go live in Somalia then.

Or are you unaware of the history of trade and taxes? The first taxes were raised to support courts, which were necessary to settle settle disputes amongst traders - otherwise such disputes would be settled by fights and stabbings. The presence of these courts meant that the traders became wealthier - they had the confidence to make longer term investments. The city-state became wealthy, and as such became a tempting to the barbarian hordes outside the wall. So, a defence force was required, paid for by more taxes.

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Thumb Up

Re: jobs aren't entitlements

No so much "bombastic bob" as "Mad Max", then.

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"How they raise wages, however? They will raise *total* income, because rising productivity implies that much - but as far as I can see, approximately all of that income will go to the people owning the robots. So they will - buy more robots, I guess?"

Worst comes to worst, the robot masters can just cater to each other and seal off the walled garden.

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Re: jobs aren't entitlements

@bombasticbob

You've missed the point entirely. There won't be jobs in a given field replaced by automation/robots. For every robot used, jobs are lost. It's a snowball effect as well. The more automation, the less work for the workforce. If the population was in decline, this wouldn't be an issue. However, we are not, so it is.

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Re: jobs aren't entitlements

And before you counter that adding robots means jobs handling the robots, industrial robots are designed to be low-maintenance. What would've taken an assembly line of people to do now just needs one or two technicos monitoring the whole line to make sure nothing's going wrong and the occasional contractor to come by when something does go wrong.

It's like how shipping changes drastically with the move to container shipping, as someone noted in a previous related article.

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Mushroom

Re: jobs aren't entitlements

The Chairman got it right. If every couple produced one child, after two generations the entire robot issue would be mute. It's the highly uneducated third world that produces more uneducated children who are only fit to be on the trigger end of a semi-automatic. Sorry, but the future holds zero prospects for them and only a few prospects for the rest of polite society. Best get used to it.

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Hoe

Major Rethink...

The world will require a major rethink in the next 100 years probably a lot less, sooner or later we will either have to switch from a money driven economy based or everyone working.

To a recreational driven economy where anyone works by choice rather than necessity!

The problem with that is though, if you destroy money, you destroy power and there is people with far too much power who will do anything to stop that day coming!

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Re: Major Rethink...

Another problem is cultural in nature: and I'm talking ANCIENT cultural, as in "earning your keep" all the way back to "hunt/gather or DIE" ancient. I dare say it's just about instinct, meaning it'll be nigh-impossible to teach away. It's one reason crime won't go away, either, because what one sees as crime another sees as "I survive and you don't."

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Globalisation

I have some familiarity with industrial automation, especially in the automotive market. Robots have been working in factories in the auto industry for longer than many of the readers of this web site have been alive.

They're nothing special though, they're just another tool in an automation designer's toolbox. Most automation doesn't involve robots. The objective is to automate production - in other words, replace labour. There are many ways of doing this, often a custom built bit of tooling, motors, and cylinders does the job faster, and more cheaply and efficiently than a robot. There's not even global agreement on what constitutes a robot.

Robots and automation in general are not what is depressing wages in western countries. What is doing that is outsourcing to low wage third world countries where cheap labour replaces expensive robots.

I've seen this a number of times. A company will spend a decade automating to reduce costs, achieving an efficient 24/7 operation. They then spend the next decade moving production of new products to China or Mexico where they can reduce capital costs by not having to spend so much on automation. In other words, they do a complete reverse course and go from high tech to low tech on the basis of reducing capital expenditure and replace robots with third world labour. Very often the building and labour is provided by a contractor, so they technically have no head count other than the head office staff (and what's left of their product designers after they've taken the chainsaw to them as well).

The globalisation process has gone so far in many western countries that people who are panicking about "robots" being responsible for "killing jobs" are at least 15 years too late.

If you want to panic about something, panic about the "Ubers" of the world who plan on reducing everyone to a "race to the bottom" temp worker.

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Re: Globalisation

Exactly. I've been saying this for years keep getting told I'm wrong.

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Re: Globalisation

...and keep getting...

BAH. Damn phone.

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Re: Globalisation

So dockers lost their jobs due to cheap labour in China rather than it taking one crane driver to unload a container rather than 1000 longshoremen ?

Cheap illegal immigrant labour is sneaking into American coal mines to steal their jobs rather than automatic long wall coal cutting machines?

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Anonymous Coward

Re: Globalisation

If something cannot go on forever it will stop. A lot of people worry about globalization lowering wages and I suppose that's true for now, but the global labor pool is not inexhaustible. At some point companies will run out of low wage third-world countries, wages will start to rise across the board from competition. Also economic development in those countries will also increase competition for labor which will also lead to higher wages. The companies might even start to consider re-shoring those jobs for both cost reasons and access to skilled labor/innovative ecosystems. I'm also not too worried about robots conquering the world. One reason is that most recent tech advances have been based off of Moore's law. That made chips faster/more efficient. That's running out now. That will put a bound on how much can be done cheep and how complex/abstract software can be. A shift will take place that focuses building efficient, functional and useful stuff that complements human labor. Also a lot of this AI stuff is just disguised number crunching and statistical analysis. The techniques have been around for a while but did not work as well due to lack of big data and fast machines. So basically you have another resource bound problem. Computers won't be getting as fast as they used to so you'll be dealing with getting more data and trying to create supercomputers. I'd watch for this and I think a lot of the recent consumer tech and Internet companies have been getting into a race of who can collect the most data on consumers. That's because that's all they have. Without that data all that machine learning isn't worth squat. It just rides off the back of the billions of interactions and judgement that people make. If people wise up and demand data privacy that whole industry is as good as dead.

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Re: Globalisation

"A shift will take place that focuses building efficient, functional and useful stuff that complements human labor."

COMPLEMENT...or REPLACE? Isn't that why industrial robots were made? What about the shift to container shipping? The next industrial transformation (and I'm going to take a guess it'll be road freight--it meshes well with containerization) is as likely as not to take more (squishy, error-prone) humans out of the equation.

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Analysis?

When I see someone say there needs to be a retraining program they often ignore the fact that many do not have any real skills for the new jobs. Taking a logger or coal miner, jobs that have definite skills, and try to make them into web designer (for example) is likely to be a complete failure. There is no real overlap between their skills and the skills required for a web designer. So when policy wonk says retraining I wonder if they have any idea what kind of skills are required for the disappearing jobs as compared to the new jobs and if there is any overlap.

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Pirate

Re: Analysis?

The mistake is trying to "make someone into someone else". THAT choice belongs to the individual.

Does anyone pity the poor "buggy whip" makers, when the automobile displaced the horse? Or livery stable operators? Or how about when computers took over BANKING, and you no longer needed rooms full of 'calculators' with adding machines? Yeah, it's a lot like THAT.

In a free society, individuals are responsible for their own destinies. No need to read 'extra stuff' into THAT one. no need to "retrain them" either. Let people retrain THEMSELVES, relocate to where the work is, and be responsible for their own lives. And that's how it SHOULD be.

Besides, we ALL know that cheap labor in China (and other places) is taking away the low-skill domestic manufacturing jobs anyway. I'd just as soon see robots do that level of work, with domestic employees building (and/or maintaining) the robots (at a higher wage).

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Re: Analysis?

"When I see someone say there needs to be a retraining program they often ignore the fact that many do not have any real skills for the new jobs."

Huh? Retraining programs are *based* on the assumption that "many do not have any real skills for the new jobs".

Another base assumption of retraining programs is that people can be trained. Apparently, you think training is "likely to be a complete failure." Perhaps you're right. But, others may disagree.

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Re: Analysis?

"Does anyone pity the poor "buggy whip" makers, when the automobile displaced the horse? Or livery stable operators? Or how about when computers took over BANKING, and you no longer needed rooms full of 'calculators' with adding machines? Yeah, it's a lot like THAT."

As a matter of fact, I do. Because you have to consider the knock on effects of displacing breadwinners with little prospect for starting over. Children, families, whole communities can be left in the lurch. And you know what they say about the desperate.

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Re: Analysis?

"Besides, we ALL know that cheap labor in China (and other places) is taking away the low-skill domestic manufacturing jobs anyway. I'd just as soon see robots do that level of work, with domestic employees building (and/or maintaining) the robots (at a higher wage)."

One, what's to stop them using cheapER robots in China, and using local help (and less of it) at lower wages?

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Robot jobs

I think the best job to replace with robots would be beancounters. Just feed it data, and it gives back computed output. In that way we can take away from them the only thing they were sneakingly allowed to have over time more and more, which is making business decisions, which they should never have been allowed to have any sort of power over in the first place.

Coffee time.

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Re: Robot jobs

It's not so much the business decisions per se, but the absolute drive to lower costs and increase profit to the detriment of everything else. If a company wants to operate that way, a fairly simply algorithm should quite nicely replace all the bean counters and many of the CxO's

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Validate the study

As others have noted, there's nothing new about "robots". Automation has been a big economic factor in many places for a couple hundred years.

So it might be interesting to apply the techniques this study used to earlier time periods. To validate the study's techniques and assumptions.

As onlookers we can do likewise with our mental models of the effects of automation.

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Re: Validate the study

The industrial revolution resulted in very violent upheaval well into the 20th century.

Millions prospered, but millions died. And millions are still living in poverty even in the U.S.

Not a pretty model.

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Re: Validate the study

Violence has gone down during and after industrialization. Yes, violence continued well in to the 20th century in "industrialized" areas. Violence even exists today. Violence and other bad things have been limited as the world has learning-curved earlier industrial revolution processes.

""Millions, millions and millions."" Did you mean that to imply three equal thirds of a total? It does.

Let's adjust this:

Billions prospered.

At this point (half way through the industrial revolution, worldwide), 1 billion out of 7 are living no better off than Americans 120 years ago - post most of the "industrial revolution" as many think of it. The other 6 are in relatively good shape and getting better at an incredible clip. Expect that top 80+% to be at or above your material level in a generation or so. That sounds to me like a very pretty model.

"...poverty in the U.S." 160 years ago people starved to death in places that are, today, very, very rich. (I'm thinking of Ireland, in particular.) Where are the millions of starving, bloated bellies in the U.S.?

Humans are diverse, if only in age. So 10%, or 5%, or 50%, or whatever percent is half of our own material percentage, or whatever is double our percentage if we prefer to think of ourselves as poor - will always be "poor". That's math. Crying in our beer won't help.

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my robot

Technology, especially the internet brings technology to the individual.

Computers used to be only used by large corporations, but now they are everywhere, for everyone's advantage. But you have to step up and grab hold of it.

The world doesn't need corporations any more, large jobs can be accomplished by many individuals co-ordinated over the internet. This should be the rise of people power. Computers put the power into your hands.

My robot does work for me, for my profit and doesn't put me out of work, in fact it makes a better product, quicker and easier.

I retrained myself to do what I wanted to do. I've now got a shed full of machinery, some I designed and built. 5 years ago I had a fret saw and last did woodwork in high school over 40 years ago.

Roll your own !

Would I rather be a wage slave, working for 'the man' or a tech/artisan making really cool wooden surfboards ?

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Re: my robot

Will that be like the paperless office then?

How'd that work out?

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Re: my robot

> Would I rather be a wage slave, working for 'the man' or a tech/artisan making really cool wooden surfboards ?

That is a trend, and is probably behind the whole ' craft/ artisan' fashion - young people creating jobs for themselves by creating stuff in a labour intensive way. It does require that there be customers happy to pay a premium for what you have made.

I'm actually writing this from a town in the Westcountry which was a hub of the Arts and Crafts movement a hundred years ago, but now is know is known for artists and alternative types living amongst engineers and manufacturing types, with a good sprinkling of countryside millionaires on the side.

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Re: my robot

"Would I rather be a wage slave, working for 'the man' or a tech/artisan making really cool wooden surfboards ?"

That's great until 10,000 other people in your locality are all doing it too and price rather than quality is the deciding factor.

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Boffin

Let's be serious about this ...

the problem started way earlier, when those easily sharpened bronze utensils took work away from honest god-fearing stone chippers. And don't forget those selfish farmers with their devilish high-yield crops who destroyed the full-time employment of honest hunter / gatherers.

I say let the robots take over and have the displaced humans work on phone sanitation and space rockets. Based on their progress, we can send a first wave of administrators and sanitation specialists over to Alpha Centauri to prepare the ground for future civilizations.

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Re: Let's be serious about this ...

When the world was sparsely population, technologies such as fire, metals, agriculture grew the pie. For this reason, I can't consider those technological advances as comparable to labour-saving technologies today. I think you may have been tongue in cheek, hence your reference to the colonisation of space.

With a more densely populated word, technologies such as fertiliser saved people from starvation.

Agriculture didn't make things better for everyone - generally someone would appoint themselves chieftain and get first access to women.

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Anonymous Coward

please help me with the math here

"one more robot per thousand workers reduces aggregate employment to population ratio by about 0.34 percentage points." In other words, every new robot added to a given commuting zone reduces employment by 5.6 workers.

I am having a bit of trouble with the math here, so please help me out.

Let's say I have 1000 people living in the area, and 400 of them are working - so the employment ratio is 40%. I now add one industrial robot, thereby reducing the emplyment ratio to 39.66%. Because I still have 1000 people living in the area (robots do not count as humans, at least not the industrial robots), I now have 396.6 people at work. Therefore, adding the robot has eliminated 3.4 jobs.

Yet, the article claims 5.6 in many places (so it is not a typo). What am I doing wrong here?

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Re: please help me with the math here

Good catch.

I wonder if they are inferring secondary displacement. (the workers who provide services outside of the factory with the robots)

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Re: please help me with the math here

I assumed when reading this that the effectiveness of replacing humans with robots was somewhere between $small_number humans/robot to 5.6 humans/robot, with a blended average of 3.4 humans/robot.

Since 5.6 is the scarier number, guess which appears in the headline?

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Re: please help me with the math here

"What am I doing wrong here?

Taking it in isolation.

Automation/robots will normally replace an entire production line, or most of it. Once you start losing 20-30 people, you need fewer admin/HR staff, few canteen staff, they suddenly no longer have much, if any, spare cash to spend in the local economy, so maybe one or more local shops close who were already finding it tough. Scale that to 4000 or 5000 all being laid off directly, + support roles and the wider local economy becoming depressed, exactly as has happened multiple times when mines closed, steelworks closed, car plants closed.

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Anonymous Coward

Re: please help me with the math here

You also have to hire someone to manage the robots. Ensure they're robotting properly, fix them when they're not, move them to where they need to be, etc. So, one robot might replace 5.6 people, but support 1.8 new jobs managing the robots.

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Anonymous Coward

Just wait

Until the AI actually reaches human level.

I give it about 1-9 years before this occurs, then things really get interesting.

We could end up with a situation where mass uploading causes a drop in global population to pre-1900 levels, with much of the remaining human workforce doing tasks with AI guidance/oversight.

Some estimates suggest that mind uploading would follow Moore's Law, so a task which costs $20B today would cost about a years wages in a decade.

Its also possible that digital replicas of those cryonically frozen might actually walk among us much sooner, depending on how easy it is to read a living versus a cryo-suspended brain.

Musk's investment in direct neural interfaces could pave the way for a microscopic description of neural functioning which would substantially decrease the time needed for a successful upload by removing or compressing data that is not needed.

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1-9 years?

Did you mean 1-9 decades or 1-9 centuries? Because there's no way in hell we'll see proper AI at all, let alone human-level, in 9 years or less.

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Re: 1-9 years?

Again DougS, comments such as yours are more useful, more illuminating if you take time to unpack your terms. There are several definitions of intelligence, and by a few of those we already do have limited Artificial Intelligence.

With respect to AC's comment about neural lace and uploading personalities, I suspect you are right - we currently have no idea what consciousness is, much less replicate it. Also, AC's idea about compressing data from from our brains rings untrue - I suspect our brains already do a lot of data compression and throwing away of non-essential information.

Regardless of the label, the point remains the same - greater problem-solving abilities in machines will allow them to assume roles currently held by some humans. Last decade it was automated fork-lift trucks (because a warehouse is a controlled environment), next decade it could easily be automated road vehicles (a less controlled environment).

Our human problem solving abilities are limited, too. For example, there are timescales on which we can't apply ourselves because our reflexes are too slow - keeping the flight of a small twitchy drone stable, for example.

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Re: 1-9 years?

The sort of definition of AI that would allow it to become prevalent in the short term would also encompass an excel macro calculating and outputting an correct yet unexpected result.

I make this comment having written and edited somewhat complicated AI's. Most people who are arguing about how intelligent AI's are at the moment appear to possess a fundamental ignorance of their basic capabilities and limitations.

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Anonymous Coward

Re: 1-9 years?

I think DougS is likely referring to the fact that AI has been a decade away for a few decades now, and there haven't been any major improvements in the field. It's just the buzzword du jour.

For an unrelated point, I would expect an AI to be at least a decade away. We don't have the technology yet, and once we have it, it will still take at least 10 years to train. After all, it takes 10 years to train a person to be competent at minimal tasks, I certainly wouldn't expect a first gen AI to do any better.

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