| The key statement in the article is the last: "Bottom line: Robots do replace workers. On the other hand, some industries that don't automate end up losing workers anyway, because their costs are too high and their customers go elsewhere. For workers, robots are only part of the problem." There are several key underlying points: 1. Work flows to where it can be done cheapest. It always has. 2. Value is relative. Something is worth what someone else will pay to have it done. That includes the worker's labor. Large numbers of workers are currently being told "What you do isn't worth what you want to be paid to do it.", as jobs relocate or get automated out of existence. 3. Supply and demand rules. When demand is high and supply is low, prices are high. As supply increases, prices drop. 4. Everyone wants the best deal they can get. Work flowing elsewhere has been going on for a very long time. Before automation and robotics came along, and work had to be performed manually by human workers, employers had incentives to locate where the work was done in places with lower labor costs. Locating in non-union areas was a first step. Moving offshore was next. (Ask what used to the the International Ladies Garment Worker Union about it.) China bootstrapped itself from Third World agrarian nation to First World industrial power by leveraging low labor costs. The moved peasants off the farm to the cities to become an industrial workforce. Unlike the experience of Russia which did the same thing under the Bolsheviks after the Russian Revolution, coercion wasn't needed. Those factory jobs had better hours, better working conditions, and paid better than being a peasant on the farm. People migrated en mass to get those jobs. Chinese workers got paid a fraction of what Western workers would get for the same jobs, but it cost far less to live in China. Those factory jobs were a step up for those who had them. But China is suffering from its own success. The supply of peasants on the farm is drying up, manufacturers must compete for labor, pay is rising in consequence, and China is no longer the low cost producer. A major Chinese manufacturer announced a full court press into robotics a while back in consequence. The inflection point we see now is that higher level jobs than assembly line worker can be and are being automated, and "knowledge work" is flowing to places where it can be done cheaper, with outsourcing an increasingly common practice. And "everyone wants the best deal they can get" is a driver. Unless you are one of the one tenth of one percent who doesn't care what something costs, you are probably on a budget. You have fixed costs you must pay, like rent and food, and variable costs come out of what's left of your income. The Internet provides all sorts of tools for locating the best deals, and price will be a factor. It may not be the only factor on which you make a purchase decision, but all else being equal, lower price wins. So outfits who make things or provide services have a strong interest in reducing costs to be able to provide lower prices, and lowering labor costs is a goal. The fact that we can get many things cheaper than we used to is a consequence of the factors mentioned above. A question I normally ask folks who want jobs returned to the US is "How much more are you willing to pay for what you buy to see that happen? You will pay more." I don't normally get meaningful answers. Complaints about immigration that reduce to "Those <whatevers> will work cheaper than I do and take my job!" raise similar issues. The people who want to buy whatever you make or do are on a budget just like you are. If the immigrant you worry about can do the job as well as you can and will charge less to do it, explain why they should pay you more? What's in it for them? I don't have pat answers to the problem of job loss. I just think we aren't asking the right questions.
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Dennis |