Automation Insurance: Robots Are Replacing Middle Class Jobs

Automation Insurance: Robots Are Replacing Middle Class Jobs

I recently got a call from my estranged brother whom I haven't spoken to in six months. The first thing he said was he's being laid off. Not surprising in this economy. He then said "my job is being replaced by a computer". He works as toll booth operator in a parking lot. My brother and I are poster childs for a generation who didn't quite make it. We both seem to be stuck in that twenties slacker bracket who can't crawl out of our low paying rut. It just seems like there's no middle ground today. Either you're a brain surgeon or a janitor. But there's not enough brain surgeon jobs to go around. And most people don't have the natural talent to aspire to such trades. Thus most of us are stuck as janitors.

The above article was interesting to read. Here's my favorite quotes:

"It’s not that the issue isn’t getting attention. The Princeton economist Paul Krugman is out there telling Congress to spend more money to create jobs. The former secretary of labor Robert Reich is arguing for tax breaks for the bottom brackets so people can buy stuff again. Here’s the thing, though: The erosion of the middle class is a phenomenon that’s bigger than the Great Recession."

"The culprit, in other words, is technology. The hard truth—and you don’t see it addressed in news reports—is that the middle class is disappearing in large part because technology is rendering middle-class skills obsolete."

What's happening is apolitical, it doesn't matter who's in power. What we're waking up to is just the inevitable march of technology. Technology never goes backwards, so we'll just see more of this.

"People say America doesn’t make anything anymore, but that’s not true. With the exception of a few short lapses, manufacturing output has been on the rise since the 1980s. What is true is that industrial robots have been carrying ever more of the manufacturing burden on their steely shoulders since they appeared in the 1950s. Today, a Japanese company called Fanuc, Ltd., has industrial robots making other industrial robots in a “lights out” factory. (That’s the somewhat unsettling term for a fully automated production facility where you don’t need lights because you don’t need humans.) That’s where we’re headed."

Loss of manufacturing base isn't the issue. We have a manufacturing base, it's just being automated.

"It’s not just manufacturing, either. Automated call centers are replacing customer-service agents. Automated checkout stations are replacing grocery-store clerks."

This is the job sector my brother and I fall into - unskilled non-manufacturing jobs.

"Economists will remind you that new technologies create new jobs as they destroy old ones. That’s true. When you have robots, you need robotics engineers. But those aren’t going to be mid-range jobs."

The new jobs created won't be middle class. We also won't have one computer engineer job created for every one job lost. The ratio will more likely be 1 computer engineer job for 10 jobs lost.

"If the skills and talents that are truly financially rewarding become harder and harder to acquire, people who would never consider themselves students of Marx might start questioning whether, given the circumstances, it still makes sense to pay people based solely on the demand for their skills in a marketplace that would be demanding very few skills."

I'm a staunch capitalist, even if I pull the short end of the straw. But for those whom want instant gratification I can easily see a wave of people turning to Marxism.

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I don't think automation is bad in and of itself. Automation should bring prices down. The question is will companies pass on these prices to consumers. If prices were passed on, then lower wages would still fetch more purchasing power.

I disagree with this.  At one time, most jobs were related to farming.  Technology killed farming jobs and shifted workers to manufacturing.  We are now going through another shift, this time from manufacturing to service.  In theory, there are plenty of potential middle-class service jobs.  Service in America is abysmal because service is generally understaffed.  Japan is an example of a country that does service right and pays people well to fill this need.

The problem in America is very simple.  The government has been taken over by big corporations and the basic government policy is to steal from the middle class and give to the rich.  This is guaranteed to wipe out the middle class.  It is a vicious cycle because as the middle class has less money, they are less willing to spend on service which wipes out service jobs.  This cycle could be reversed by a good government and the middle class could be restored, but this won't happen because good government is not possible in a feminist culture.

fschmidt wrote

I disagree with this.

Are you disagreeing with there being a middle class job problem, or just that "robots" are the problem?

fschmidt wrote

At one time, most jobs were related to farming.  Technology killed farming jobs and shifted workers to manufacturing.  We are now going through another shift, this time from manufacturing to service.

Yes but as the article states:

"It’s not just manufacturing, either. Automated call centers are replacing customer-service agents. Automated checkout stations are replacing grocery-store clerks."

fschmidt wrote

In theory, there are plenty of potential middle-class service jobs.  Service in America is abysmal because service is generally understaffed.  Japan is an example of a country that does service right and pays people well to fill this need.

Service jobs pay more in Japan?

fschmidt wrote

It is a vicious cycle because as the middle class has less money, they are less willing to spend on service which wipes out service jobs.

 

So in other words American customers are cheapskates. They're unwilling to pay for service and in turn will gladly put people out of work. I noticed this when I worked at an electronics retailer. Customers would come into the store, ask questions, then go home and purchase the same product online for less. This retailer went bankrupt, now they get zero service.

Drealm wrote

Are you disagreeing with there being a middle class job problem, or just that "robots" are the problem?

Just that "robots" are the problem.

Yes but as the article states:

"It’s not just manufacturing, either. Automated call centers are replacing customer-service agents. Automated checkout stations are replacing grocery-store clerks."

Grocery-store clerks barely qualify as a service job and certainly aren't middle-class jobs.  These jobs shouldn't be missed.  In high end stores like Whole Foods you have knowledgeable people available that can help you find things and answer questions.  This is the kind of service job that is needed.

Service jobs pay more in Japan?

I think so.  Japan has other problems, but service is excellent.  I hate shopping in America but shopping in Japan is fine because there are always people available to help.

fschmidt wrote

It is a vicious cycle because as the middle class has less money, they are less willing to spend on service which wipes out service jobs.

 

So in other words American customers are cheapskates. They're unwilling to pay for service and in turn will gladly put people out of work. I noticed this when I worked at an electronics retailer. Customers would come into the store, ask questions, then go home and purchase the same product online for less. This retailer went bankrupt, now they get zero service.

American customers are cheapskates for two reasons.  One is because there is no morality or loyalty left in America, which is the example you gave.  But the other reason is that American customers are getting poorer all the time as the government destroys the middle class, and this was my point.

So since America shows no signs becoming any less feminist, I take it you think the middle class will erode much more?

Yes I think the middle class will be mostly wiped out like in Latin America.

Kinda agree with Drealm.
The rich (financial) and smart (Engineers etc) will get richer. Others will get poorer.

I don't agree that the poorer will struggle in an absolute sense. But the relative gap will grow. Under any government.

I remember reading in "The Bell Curve" years ago that the monetary return to being an engineer tripled over the last century while manufacturing jobs pay just grew by 50-75%,  - despite run of the mill engineers etc are being pretty screwed over by laws today.

So what do you think would be a better system? You seem a fairly libertarian, minimal government type to me. But it's clear that such a system often results in large companies buying up the government. Philosophically, I'm struggling with this problem myself, as a libertarian. I want a free system where you can buy what you want, set up your own business, etc. but I can see how it becomes a system where biggest fish basically eat everyone else for breakfast.

Would you say a neo-liberal, globalist, capitalist system encourages feminism? It seemed to occur in the USSR as well, though. I'm starting to wonder if the best way to go is a mixed economy. Of course we technically already have that, one where the gov't (and possibly the rest of the world) has to tip toe to the banking elites at gunpoint.

Big corporations would not be possible without limited liability which is an anti- free market concept.  The whole idea of the modern corporation started as a government created construct.  Corporations should be eliminated and businesses should be partnerships.  Partnerships should be allowed to issue shares, like corporations do today, but voting shareholders should have criminal liability for the actions of the business proportional to their voting interest in the firm.  Under such a system, no one would want to be a voting shareholder in a huge firm where it is impossible to know everything that goes on because some criminal activity in some obscure corner of the firm could result in jail time for voting shareholders.  This is the natural mechanism for the free market to prevent the existence of firms that are large enough to subvert democracy.

True capitalism encourages wealth and wealth seems to encourage feminism.  I'm not sure what the solution to this is.

This short video pretty well explains how Corporate America works today.

http://www.youtube.com/watch?v=pOgYbvWQYfQ