Companies faced with worker shortages and soaring labor costs are increasingly turning to automation to address the challenging economic climate.
Hiring issues have been widespread across the economy, and wages are spiking. These two forces are compressing margins for companies that force them to invest in robots to mitigate labor woes.
During the pandemic, we reported microbe-zapping disinfecting robots were introduced in airports and hospitals, fast-food chains adopted hamburger flipping robots, and restaurants began to use robo-waiters.
With the worst days of the virus pandemic hopefully over, the automation trend continues to gain momentum. Bloomberg, citing a new report from the International Federal of Robotics, said spending on professional service robots jumped 12% last year.
With the number of open jobs around 10MM, Americans are quitting with ease. For the first time in decades, workers have power in the labor market. And they're using this newfound leverage to launch a flurry of strikes, demanding higher pay and more benefits from companies. This has created all sorts of headaches for their preoccupied bosses, dealing with snarled supply chains.
Unions have long viewed robots as a threat. Companies "have one goal in mind: to eliminate your job, and put more money in their pockets," International Longshoremen's Association President Harold Daggett said at a June conference. "We're going to fight this for 100 years."
But the fight could be pointless as the automation wave is already sweeping through the economy, supercharged by the pandemic. Even before the virus, wealth inequality was at extremes, and what will make it worse is automation:
"If it continues, labor demand will grow slowly, inequality will increase, and the prospects for many low-education workers will not be very good," said Daron Acemoglu, a professor at the Massachusetts Institute of Technology. He testified Wednesday at a Senate hearing on automation.
Acemoglu said firms could "develop technologies that are more complementary to workers." But he said that's not "the direction the technology is going currently."
Robot technology allows machines to displace humans and could boost productivity but wipe out jobs for the working poor. There will be growing pains in the economy this decade as displaced workers sit idle, and what's likely to happen is the government will continue to issue stimulus checks.