By Sidney Keene
Friend or foe: a question more and more find themselves asking, as robotic technology and AI becomes more prevalent in our rapidly developing society. Thanks to famous films and novels that have theatricalized the development of robots, a more severe sense of paranoia has washed over the general public. Today, we have what some call a ‘robot economy’ as some of the biggest worldwide companies are opting to go automated, most notable being Amazon and Best Buy. There are both advantages and disadvantages of robots in our economy; and while there is no mass threat of unemployment right now, there could be in the near future.Although widespread speculations have created doubt and uncertainty, robotic technology can have positive effects on the economy. One example of this being an increase in employment opportunities, which many people discount. With the creation of advanced technology comes, in turn, the increased demand for higher skill leveled workers, specifically in STEM. Afterall, somebody must program the machinery, and perform the tasks that are still too personalized or meticulous for a robot who can only perform menial tasks. Additionally, advances in technology should provide us with more resources that make the cost of living decrease. Similar to this, robotic equipment stimulates productivity growth, or the amount of output produced in a set period of time. Clearly, robots can finish duties more efficiently and with more precision than the typical human being. But to achieve maximum productivity is to obtain total factory productivity, “which comes from the synergies of labor and capital working together as efficiently as possible” (Investopedia). Increases in quality of labor come from a higher educated worker, who can add more value to production. Capital is the investment in machinery, such as robots or AI. When the two work together, they are creating efficiency, which, as a result, can create an increased Gross Domestic Product (GDP) for the economy.
As mentioned above, robotic technology, or physical capital, can improve life for the consumer, and the economy as a whole. However, those who benefit the most from it are the individual firms using it in production. As we’ve studied in the factor demand market unit, a firm in perfect competition will continue to hire until their marginal revenue product (MRP) equals their marginal resource cost (MRC), and will keep hiring as long as MRP is greater than MRC. However, this is when the laborer is a human. The firm will still have to consider the fixed cost of obtaining the physical capital of robotic technology in the first place, however, it will not cost the firm annual salary costs. With robots, a firm doesn’t have to worry about a laborers allocation of leisure time or willingness to work. It can just purchase the amount of capital with total costs lower than marginal revenue. If you think about it, advanced technology can decrease the firm’s variable costs as well, as robots don’t need health benefits, vacation, or any other costly benefit that human workers receive. This technology can also help a firm maximize production by minimizing error. A human can create costly mistakes for a firm that can set them off track for a long time, while a robot won’t do this because it was made for the job and is extremely precise. Lastly, a robot will perform jobs too dangerous for human workers. This eliminates another cost of workers’ compensation that covers a laborer’s work related injury - a robot would not need this.
However, while there are advantages, there are also negative effects on our economy - one of the most prevalent being the elimination of jobs. In short, robots are completing tasks that were primarily intended for humans. An example of this, is manufacturing work in factories. A study composed in 1990 through 2007 by the National Bureau of Of Economic Research, found that the number of jobs lost to robots “[ranged] between 360,000 and 670,000 jobs, equivalent to a 0.18- 0.34 percentage point” (“Robots and Jobs”). This number, since 2007, has only been exponentially growing as technology continues to advance and “By the year 2020, an estimated 5 million jobs are predicted to be replaced by machines” (“How Robots Could Destroy Our Economy”). This is all due to what was mentioned above, that robots can increase productivity and decrease costs. Henceforth, firms will opt to ‘hire’ the machinery over human beings.So, how much is your job at risk? This depends on your profession. If you work with a lower skill set that includes repetition or sorting, the odds of the job becoming automated are very high. Jobs that require only as much as a high school diploma are at extreme risk, for example, a cashier, toll booth worker, truck driver, or fast food worker. However, low risk jobs include physicians, teachers, songwriters, or cosmetologists, as these jobs require a more personalized, human touch.
In conclusion, it is inevitable that robots and AI are rapidly joining the workforce and will take away jobs from humans who are perfectly able to perform them. Robots can both be advantageous for an individual firm and threatening to a human laborer. However, it is important to remain calm in a time of such revolutionary change. If you get a higher level of education, you can aquire a higher skill level job, and the odds of a robot taking over are much lower.
Works Cited
“Robots and Jobs: Evidence from US Labor Markets.” Acemoglu, et al. NBER, NBER, 23 Mar. 2017, www.nber.org/papers/w23285.“3 Ways Robots Affect the Economy.” Anthony, Craig. Investopedia, Investopedia, 8 Oct. 2018, www.investopedia.com/articles/markets-economy/091316/3-ways-robots-affect-economy.asp.
“How Robots Could Destroy Our Economy - And How They Could Save It.” DeMers, Jayson. The Huffington Post, TheHuffingtonPost.com, 12 Oct. 2017, www.huffingtonpost.com/jayson-demers/how-robots-could-destroy-_b_12411008.html.
Today. “Robots: Is Your Job at Risk?” CNNMoney, Cable News Network, money.cnn.com/2017/09/15/technology/jobs-robots/index.html?iid=EL.
This was an interesting article to read, especially considering I recently read a blog post on how these technological advances are instead increasing employment rather than taking them away. After reading both perspectives, I agree that high risk jobs are in danger for being taken over by these new technology bases. The whole idea of economics might be changing in the future, as you mentioned how the supply and demand curves for labor markets are based off of human labor, not robots. Therefore, very soon we might be seeing a change in a way how the labor market is portrayed, as the process of hiring workers might become more complex.
ReplyDeleteI love how you incorporated both perspectives of the potential gains as well as the draw backs. I think you're entirely right about the types of jobs that more people will have to start shifting too. Jobs that will always need the human component will be jobs needing a high amount of social interaction. I think these jobs may even get more valuable because as society becomes so technology centered, social skills are being neglected by our culture and educational systems. Social jobs also allow for a lot of individuality which will ensure that people with great social skills will always be able to find jobs.
ReplyDeleteI agree with the insights that you provide pertaining to robots being both bad and good. I think it is interesting that robots mainly preform simple tasks that lower skilled workers may also preform. This seems to be taking away jobs from those lower skilled workers which may be putting them out of employment. However, I also feel like this fact is good since it may push people towards furthering their education and developing a more complex skill set that can not be taken over by robots.
ReplyDeleteWe live in a service economy; theoretically those sorts of jobs that require critical thinking outside of putting in screw 87, and thus those sorts of automations would theoretically be beneficial. We get more stuff, and the merit of those manufactured items may be under scrutiny, but the positive statement that we have more stuff is sound. Our westernised society needs the production to be done somewhere, and instead of the weight falling upon the right people of Gary, maybe the burden is upon a cold steel hide.
ReplyDeleteThere is another layer of this to take into account. The increasing use of robots also creates higher barriers of entry in industries they are prevalent in, such as manufacturing. A new firm would have to pay a higher cost for robotic capital (on top of the already high cost of land and building capital) in order to be competitive with already established firms which disincentivizes entrance into the industry.
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I think that integrating robots into our daily lives does have its pros and cons, but more so pros. Yes, jobs will be lost, but that can inspire other people to level up in their job, or learn more about the STEM field and programming these robots. It’s the cheaper alternative in the long run for businesses who can benefit from robots, and a robot that is trained excellently will become an expert and use precision to carry out their task. I think robots are slowly becoming a part of us, that the thought of them taking over our jobs scares us. The reality is, other technological advances in our home have already enabled us. TV remotes allow us to remain sitting and flip through what’s on, Siri, Alexa and Google speakers allow us to ask any question without physically looking it up ourselves. We have iRoomba, a robot vacuum that cleans the house for us. Our cars are evolving into robots and can do more advanced tasks. Robots are becoming a part of our society, and even though they might remove jobs from the market, the products produce might be of better quality.
ReplyDeleteThis is a very interesting topic, and not one I've ever thought to view from an economical standpoint. Your statements are true on both ends, although the disadvantages seem too concerning to overlook for the potential positive outcomes. Many jobs could be lost in the process of increasing robotic use in the workforce, and the increase of employment opportunities would only take place in a specific, highly complex field. Therefore, no balance would be created in the jobs lost and gained, and the economic effect would be overall negative. Contrarily, I still believe that some level of utilizing robots could potentially benefit various industries/careers,
ReplyDeleteAlthough it is inevitable that robots are going to take over more and more jobs in the upcoming years, there is still a way that is will help the economy for the people that are jobless. These people will most likely have to go into jobs were robots are not applicable, where they are need more. This also means that they will have to learn new skills which can greatly benefit an economy, growing it faster, because the entire workforce would be more educated. With any new thing, that start is going to be bumpy, but as time goes one, these workers will find a way forward that ultimately will be better for them in the long run.
ReplyDeleteI believe that if robots to take over the workforce, that there will be pros and cons, and I do agree with yours. But do we know that robots will be taking over any time soon? Or all at once? I think if robots were to start taking over the workforce it would be slowly and not right away, or there will be certain jobs that they are equipped for. You will not see a robot working in hospitals and giving people surgery right away, people have gone to school for years for that and so much could go wrong, like you stated, a lot could go wrong. I feel that robots could start to benefit in working with technology and security. I do not like the idea of them taking over the workforce either, it is scary. But I do not think it would just be that one day robots had all of our jobs, I think it will be more thought out and people already working will be kept in mind,
ReplyDeleteI agree with your whole piece especially when backed up with evidence. Although robots are becoming more common in society, don’t you think they could still perform low risk jobs as they advance. Robots do not always have to look like the stereotypical ones on TV, but could also look realistic to help with the human touch aspects of jobs. What would be worse, having flawless products made by robots or an almost perfect product made by a human?
ReplyDeleteIt is very true when you mention how robots and AI have become so prevalent in the workplace today, and I believe that the concerns people have regarding their impact on the workforce are grounded. Like you said, as it is today, most robots can only do basic menial tasks, however, with the rate that technological advancements are occuring at, the precipitous drop in manufacturing and/or other more minimum wage type drops could continue to plummet. Although there are benefits to having these jobs become automated, they are taking away jobs that introduce young people into the workforce or jobs that people with other careers do on the side for necessary additional money. You said that your job is more likely to be safe if you have a higher education-- which is 100% true, but what is concerning is how people who have not/will not achieve that level of education will support themselves. Yes, there will be more jobs programming and researching for such robots, but not every person is specifically fit for this type of work. Conclusively, this is a very complex problem that has many nuances, but in the long run, the addition of more robots into the workforce will definitely have a more negative impact on the world.
ReplyDeleteI agree with both positives and negative concerning the impact of machiens on our economy. However I lean toward the side in which robots are a positive influence on our economy. They are more efficient and cheaper for the manufacturing companies that use them. They create a better quality product and they lower the cost of that product. The jobs lost are only gained by the people who are in charge of the machinery as stated above in STEM like professions. Also our society is now more focused on personal. Customer service and public relation jobs within business administration, health services and hospitality are in high demand. These high demand jobs cannot be decreased by the increase of robots performing production tasks.
ReplyDeleteIf robots take over the job market, how will a majority of the population make a living? Although, there are benefits of robots on helping the economy with helping protect and reduce certain expenses, people may of had due to the working environment and risks, there is also a downside to robots increase in human jobs. Because of robots taking over jobs what will people do to earn a living, sure, there are the people that create the robots, but what does the rest of the population do if they aren’t interested in that industry of work. If robots take over jobs, most of the population will struggle financially because of the increase in production of working robots.
ReplyDeleteIt would seem as though the ever expanding workforce of robots would create a widespread panic among low-skill workers, yet very little news or recent events reflect that idea. Instead, the economic consequences of more robot workers could be more positive, as it opens up far more jobs for technicians and computer science workers. Those jobs pay far better than simple manufacturing work, and they also are going to be in great demand with so many robot workers. Obviously those jobs can run out, but any new development in technology can always create new jobs with it.
ReplyDeleteI think that all of the pros and cons mentioned here in this post are very reasonable. The thing that sticks out to me the most is the fact that we may be losing jobs to robots in the future even more than what is happening now. There is a very fine line of where growth becomes too much and eventually becomes a negative, we always need to be awry of this issue and know the impact it might have.
ReplyDeleteI certainly see both the benefits and negatives about robots. While enemies of those who are manufacturers, they could be considered friends with 21st century technology. It is hard to say whether they are truly enemies or friends because robots are taking away jobs from American manufacturers. But on the other hand they are helping America advance in the field of technology and they also help business owners save on money because once robots are doing all the work, business owners don't need to pay employees.
ReplyDeleteTo what extent is the elimination of human jobs the next step in a sort of economic evolution? Yes, as robots take over jobs, it'll leave fewer and fewer jobs but who's to say that the current way that the economy works is the best way. As it stands, the economy runs on money but it hasn't always been that way. We used to function on a bartering system and who's to say that a powerful AI designed to provide for people isn't going to alleviate the need for money once again? As it stands, money is actually an economic inefficiency in and of itself. Money has to be produced, which uses resources and valuable capital, must be maintained since most forms of currency don't last indefinitely. The crux of economics of is scarcity, providing for unlimited wants with what's available. Nowhere in there does it state that money is a necessity. In short, an economy that runs on money can't have robotic workers due to the needs of the people but with a proper replacement system, specifically one designed to provide for people, it may be possible.
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ReplyDeleteIt was interesting to hear both the positives and negatives of the advanced technology. If robots start to take over human jobs and duties humans are going to become incredibly lazy. The obesity rates will continue to increase because humans will just sit around waiting for their robots to accomplish their work. One type of advanced technology that could change the world would be if we transfer to self driving cars. Other car companies that are not selling self driving cars will start to lose business. All of these regular car companies will shut down because the society will want to follow the crowd and purchase self driving cars. Sure the economy will become more efficient and easier to run, but our society will become lazy and too reliant on it. All of the business that sell certain items such as laptops and other simpler types of technology will have a tough time competing with the new devices. The robot companies will be able to employ students faster and more efficiently since our society is becoming so technology based and students are being taught technology skills so they will be ready for the robot companies that are all technology based. Robots could make our economy be more efficient but overall there is a negative effect on the economy as their will be lots of job opportunities lost.
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