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With the haste advancement of technology, the 21st century can expect innovation in consumer products, home automation, and smart vehicles. Beyond the evolution of flashy commercial and capitalist production, what many individuals overlook is the advancement of the supply chain operations in a manufacturing setting. As technology and computing progresses, the automation and replacement of low-skill factory jobs is imminent due to the low operation costs of robots; however, a large point of concern is the millions of jobs that are expected to be replaced by robots. These jobs include switchboard operators, film projectionists, retail salespeople, cashiers, train-station sales assistants, and factory production workers. For factory workers who need to support their families and own interests, where will they go? How can they combat the loss of jobs due to advancing robots? Will humanity, as we know it, succumb to artificial intelligence?
Today’s artificially intelligent (AI) robots are not only working faster and more reliably than their human correspondents, but also performing tasks beyond human competence altogether, such as the microscopic assembly of small processing units. The truth is, many of these robots aren’t as capable as people may think. They may be more dexterous than the “average-joe”, but they are programmed to complete a small range of tasks. Most of these robots cannot safely work in close proximity to humans in order to prevent any hazards or malfunctions. AI is just now finding its place in manufacturing, as our technology matures and operation costs drops. An increasing number of manufacturers are developing applications in which AI can evaluate complex decisions.
The future of AI in manufacturing is already becoming feasible in rising markets and displaying advanced capabilities. In manufacturing, capital investments are high and profit margins are often sparse. Due to these conditions a majority of manufacturing has been outsourced to low-wage countries, where human-resource costs are so low that there’s no justification to invest in AI. “Countries like India and China are already making significant investments in AI for manufacturing and e-commerce”. Although many workers will be replaced by robots in the short term, the end goal is to retrain these same workers to perform alongside AI. Looking beyond the manufacturing side of operations, AI is creating an impact in areas that are unrelated to robotics. For example, supply chain algorithms can calculate patterns of demand for products across time, geographic markets, and socioeconomic segments while accounting for economic cycles, political changes, and even weather patterns. The output of these algorithms can be a projection of market demand, which in turn could influence material sourcing, employee staffing, large financial decisions, inventory, and total energy consumption. This is beyond useful when it comes to production maintenance and decisions. With sensors tracking factory conditions and performance of factory equipment, learning to predict breakdowns and malfunctions could effectively lower maintenance costs and ultimately increase market returns.
The Machine Learning (ML) algorithms that conduct early AI operations have already generated positive changes in production numbers. “These algorithms have reduced supply chain forecasting errors by 50% and lost sales by 65% with better product availability”. Automating quality testing using these algorithms is increasing defect detection rates up to 90%! Modern manufacturers place more care into finding new ways to grow and excel at product quality while still being able to take on short production runs from customers. One of the main points of president Donald Trump’s campaign, that manufacturing jobs have left the US in droves as a result of bad trade deals, could be based on a faulty premise. According to this narrative, the US’s trade policies, growing trade deficits with Mexico and Canada, and China’s “unfair subsidy behavior” are to blame for the US”s “deindustrialization” and its disappearing middle class. The US did indeed lose about 5.6 million manufacturing jobs between 2000 and 2010, but according to a study, by the Economic Research Center at Ball State University, 85% of these job losses are actually due to technological change, mainly AI automation, rather than international trade conflicts. Although there has been a steep decline in factory jobs, the manufacturing sector has become more productive and industrial yield has increased greatly.
Automation has transformed the American factory, rendering millions of low-skilled jobs redundant. The Boston Consulting Group has estimated that while “a human welder today earns about $25 per hour, including benefits, the equivalent operating cost per hour for a robot is around $8”. As a result, many low to middle-class Americans are losing their jobs in their trade, that they’ve spent years practicing, to automation. Another industry that is often overlooked is retail. “At least 38% of the current retail workforce, which consists of 16 million workers, are at risk of being replaced over the course of the next 10 years by automation”. This doesn’t necessarily mean that you’ll be conversing with a robot to find your favorite brand of cereal or if a store has a specific sized shirt, but rather you’ll see more automated cashiers and retail mobile-applications. “Cashiers are considered to be one of the most easily automatable jobs in the economy”. There will also be less sales jobs, as more consumers use in-store applications or their own mobile phones to find what they need. Sure there will still be salespeople on the floor, but not as many of them. Rising wages are also assisting in the push for automation, as city and state governments are boosting minimum wages. I remember a time when summer jobs meant working for minimum-wage and making $7.25 per hour, but New York State minimum wages have inflated to an all-time high of $11.75 per hour. The increased competition from internet e-commerce is also a factor, since it requires retailers to be more efficient in order to compete. Amazon already implements robotics in its fulfillment centers so that time is not waste on human error. It’s very apparent that advancing technology is killing jobs but the next question at hand is, how can we stop this? This remarkably complex issue truly has no simple solution, and any attempt by politicians to villainize matters will only serve to further its negative impact. “Industry and government alike need to take a long, hard look at the effect of automation or industries as a means of maining the United States’ role in manufacturing and innovation, while curbing domestic job loss”. As the market shirts, even the most labor-friendly companies won’t be able to find new roles for the entirety of their workforce.
It may be true that different new roles are opening up in factories alongside robots, but the majority seem to require, if not an engineering degree, some sort of technical training or skill. The current labor market for college-educated workers is very, very strong and those individuals continue to receive higher pay; however, the number of jobs to those without a college education has contracted dramatically and have greatly decreased the earnings and fortunes of these people without a degree. It’s a deepening divide that speaks to the ever-growing need for STEM-based education that goes well beyond higher education. As factories become more automated and more robots are introduced into the process unforeseen categories will open up in the workforce. Modern economists suggest that “it’s in the best interest of companies to reward loyalty among employees, how many corporations will ultimately take on the financial burden of educating a changing workforce? And even then, how much of a dent can such education really make?” With or without job loss, companies are going to continue to utilize robotics and automation in some major way. The caveat for most corporations is that the bad press that comes with the elimination of, what are generally regarded as, “low-skilled” positions is offset by the savings and productivity technology can provide.
My personal opinion is that in order to appease to both automation and the retention of low-skilled jobs is for companies to invest in their own infrastructure. If companies are willing to invest in the education of their own loyal employees, then that would not only save their jobs, but also retain the workers who have already proven their hard work.
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