Robotic Nation Evidence

This article from U.S. News has a title that says it all: Industrial robots are reshaping manufacturing. This is what the Robotic Nation is all about. From the article:

"The machinery dealer wanted something like $60,000 or $70,000 for [four used robots], but we haggled them down to $40,000," says Jeff Shoemaker, an industrial engineer who heads four divisions at the firm. "That still may seem like a lot, but with the rising cost of health insurance for our employees, the cost of a robot is pretty easily justified."

Those four robots--along with seven more purchased since then for various tasks such as welding and loading--have allowed Allied-Locke to get more production out of the same number of workers. And that has helped it avoid new hiring. That sort of situation represents the other face of the well-publicized issue of America's declining manufacturing employment. If American workers aren't losing jobs making Nike sneakers to Vietnamese workers, then they are losing out to machines as companies look to increase productivity.

The article also points out that, "North American manufacturing companies shelled out $877 million for robots--up 19 percent over 2002."

The article mentions Robotic Nation in this way:

Marshall Brain, founder of the popular online encyclopedia HowStuffWorks.com, has written an influential online manifesto called "Robotic Nation" in which he concludes that the greater presence of robots in the workplace will lead to massive unemployment over the coming decades. "The jobless recovery is exactly what you would expect in a robotic nation," he writes.

Then the article offers this rebuttal by James Miller, economics professor at Smith College:

if robots displace enough workers, the laws of supply and demand will cause their wages to fall, meaning it will no longer be cheaper for the firms to replace them. "True, the existence of automation might depress workers' wages," Miller adds, "but it shouldn't ever leave them unemployable."

As it turns out, wages are in fact falling. As pointed out in the article New jobs just don't pay well, "A national study says the new jobs being created pay 21 percent less than the jobs they replace." So what we have to look forward to in the Robotic Nation, in the best case, is a situation where wages and benefits are falling dramatically. For 200 years in America the trend has been toward a rising standard of living. Robots are now in the process of reversing that trend. See this blog for details.

The thing that Miller is missing is the example mentioned up top. The robots in that example only cost $40,000. They replaced human workers who have wages, health insurance costs, sick days and so on. Human workers only work 8 hours a day 5 days a week (8x5), while the robots work 24x7. Robots never get cancer. Robots never take vacation. Robots never need time off to care for sick children. Robots never injure themselves on the job. Robots get better and better every year as technology advances. And the prices for robots will be falling, just like the prices for VCRs and microwave ovens have.

There is no way that a human can compete with a robot on wages, no matter what happens with supply and demand curves. That is the nature of the Robotic Nation.

See this post for a solution to the problem.