Retrain and reskill workers now…or else!

Facts: Yes, Robots Take Jobs and Lower Wages

Now we know! Pre-COVID (2008-2017) “robot intensity” doubled in U.S., took jobs and lowered wages. Post-COVID, joblessness may accelerate, in a hurry.

“One more robot per thousand workers reduces the aggregate employment-to-population ratio by about 0.20 percentage points, which is equivalent to one new robot lowering employment by approximately 3.3 workers. With respect to wages, one more robot per thousand workers reduces wages by 0.37 percent.” —Robots at Work

That bears repeating: 1 robot lowers employment by 3.3 workers. Robots in the U.S. have doubled since 2009. Do the math; this is serious. Automation is inevitable; retraining and reskilling need to be just as inevitable.

“1 robot lowers employment by 3.3 workers”
Terrible as these times are now, COVID has an endgame in sight: vaccine. We’ll all soon enough get vaccinated, after which the masks and Plexiglas and worry over plague will all disappear. However, in the uncertain aftermath of post-COVID, a return to worry over joblessness will quickly return, take hold and linger.

A good indicator of the future direction for jobs, robots and wages post-COVID is The Century Foundation’s report, How Robots Are Beginning to Affect Workers and Their Wages, which tracked the inroads of robots and automation during the Great Recession (2008-2017).

Because robots-stealing-jobs stories are so numerous and get such wild reactions, we checked with Media Bias Fact Check on The Century Foundation’s research and reportage. Here’s what MBFC reported:

Media Bias Fact Check has The Century Foundation highly rated but a bit left of center in reporting the facts. “Overall, we rate The Century Foundation Left-Center Biased based on advocacy for progressive issues. We also rate them High for factual reporting due to proper sourcing and a clean fact check record.”

Plus, the research authors, William Rodgers III and Richard Freeman, are superb. The Century Foundation has thus produced a factual and very worthwhile research report.

We’ll share some of the facts that were uncovered.

No vaccine for automation
We’ll soon find out that while we were occupied with other, graver concerns, automation, robots, and robotic process automation will have dug themselves more deeply into everyone’s workplace and workday.

Sadly, lots of people will not have a workplace or workday waiting for them. Automation will have replaced them.

COVID has accelerated digital transformation. Timelines that were 4 to 5 years off have now shrunk to 6 to 12 months.

Businesses large and small will have learned the hard way that automation is the best hedge against work disruptions from lockdowns and social distancing.  The rallying cry for business will be: “Never again!”

And those businesses will be right to automate ASAP. However, that rallying cry will be the logical excuse that will mask the disappearance of jobs at a pace no one is prepared to accept. Job losses that might be truly mind-boggling.

To a lesser or greater degree, every industrialized country will experience the near-identical symptoms; and we’ll all collectively find out in a hurry that there is no vaccine for automation.

Rather, herd immunity through retraining and reskilling might be the best remedy.

The reality seems to be that industrial robots and cobots are going to take lots of jobs, but far fewer jobs than expected.  Then too, industrial robots and cobots are going to create a lot of jobs, but again, far fewer jobs than expected. In the middle is the great mass called the rest of us.

As a result of the 2008 recession, the U.S. shed 1.6 million manufacturing jobs requiring just a high-school diploma; only 200,000 returned. [That’s 1.4 million who never returned to their former jobs]

This time around, the U.S. has idled 25 million jobs; and this time around automation won’t just target manufacturing, everything is at risk.

About 40 percent of the current jobless number is going to be permanent,” said Nicholas Bloom, an economics professor at Stanford University. “Looking through history at previous recessions, often these temporary layoffs unfortunately turn out to be permanent.”

That’s 10 million jobs!

To the jobless, squeezed out of the workforce through no fault of their own, their plight may seem like the incessant winds of the U.S. Dust Bowl (1930-1936), which blew for years on end, hurling huge tracts of Oklahoma grasslands onto the windows of parked cars on Michigan Avenue, 700 miles away. The Dust Bowl misery of farmer Tom Joad and his migrant family may be revisited upon those left behind post-COVID.

Fact Pattern Pulled from The Century Foundation’s  How Robots Are Beginning to Affect Workers and Their Wages:

  • Fact: “Following the Great Recession, from 2009 to 2017—a period of significant, steady job growth and economic recovery…the use of robots in the U.S. workplace more than doubled.”
  • Fact: A bright spot: “At the current stage and pace of robot growth, and with the right economic conditions in place, some workers without a college degree may benefit from robotization. This is perhaps due to robots stimulating demand for goods, creating new markets, and spurring wage growth.”
  • Fact: “The economic boom of the past decade has effectively “masked” some of the impacts that robots have had on workers. It’s not that robots weren’t displacing jobs—it’s that the overall economic expansion was large enough to offset some of these job losses.”
  • Fact: “Given that the U.S. Midwest has the greatest concentration of robots and the fastest robot growth (and thus is most likely to show the effects of robots) …robots have sizably decreased employment for some groups of workers (young, less-educated men and women).
  • Fact: “An increase of one robot per thousand workers is associated with a 4.0 percent to 5.0 percent decline in wages.”
  • Fact: “The biggest negative impact of robots was on young, less-educated black men and women—groups that already have lower wages and employment rates, on average.”
  • Fact: “The economic recovery of the last decade has effectively “masked” the impact of robots on employment—that, absent such a strong recovery, robots would have displaced many more jobs than they did.”
  • Fact: “If manufacturing growth during the recovery had not relied so heavily on robots, there would be many more jobs available to workers, and minority young workers in particular.”
  • Fact: “From 1990 to 2007…increased use of industrial robots—that is, what is referred to as increased “robot intensity,” typically measured as the increase in the number of robots per thousand workers—lowered employment rates and wages overall.”
  • Fact: “Our strongest evidence for the existence of industrial-robot-led job displacement primarily is in the nation’s East North Central (ENC) census division (Illinois, Indiana, Wisconsin, Michigan, and Ohio), with young, less-educated men and women bearing the brunt of the job losses.”

Conclusion: “Communities may need to provide education and training opportunities for new jobs and occupations that are created as a result of the robot technology.

“More importantly, policymakers, unions, employers, and nonprofit social service organizations will need to assist workers, especially young minority and women workers that get displaced.

“This is important because, even though there is no recession on the horizon, economic growth has begun to slow [2019], meaning the ability of a “rising tide” to offset the negative aspects of robots will diminish.”

See related:
Clueless or Inept?
Feds Clueless About Impact of Automation
After six years of media frenzy and taxpayer concern over automation, still no action…or even a plan.