Unemployment still high. Why? In part: robots

[sear]

I was catching up on CBS-TV 60 Minutes episodes on my DVR, and saw a segment about robots proliferating in the workplace.

ATMs are cutting into bank teller employment.

Kiosks are replacing airport ticket agents.

Automobile assembly lines are becoming ever more automated.

Warehouses, and numerous others, with more on the way.

Two of the MIT professors / interviewees said the U.S. economy is recovering nicely from the Bush recession, by several criteria.

Business is booming. Industry is investing in plant & equipment.

The car market is doing OK.

But unemployment is still high.

My question:

What will it be 100 years from now? Look at how Moore's Law has accelerated the growth of computer chips, doubling in power roughly each 18 months.

By then a computerized artificial intelligence and voice synethesizer might not be distinguishable over the phone from a person.

If robots are getting all the work, who's going to have any $money to buy anything?

[coolguy]

Its crazy to think about it.in 100 years we will have robots that look like humans.

And i bet humans will marry robots

[DarkHunter]

Robots take away very few jobs and actually end up creating far more jobs then what they take, the only problem is the jobs they create are specialty jobs that would require a degree and not the mass manufacturing or other repetitive jobs they are taking. For a single robot you need the person creating the software to run it and to continue updating it as new advancements are made, a person to fix the programming problems that arise commonly from complex programming, a person to fix/maintain the physical robot itself, the person to come up with a better robot, and lastly the person running the robot. The example I gave is not perfect but it gives an idea of how many jobs the robots end up creating because it isn't just one person making the program for the robot but instead a team of programmers making one a part of the total program and it is similar with the other jobs I mentioned.

With more robots being created and the more complex the robots are the more jobs the robots end up creating, but like I said the jobs they are creating are not the jobs people are used to doing like working in a factory or doing a repetitive task but instead specialty jobs that require advanced education.

[AsteroidX]

the jobs they are creating are not the jobs people are used to doing like working in a factory or doing a repetitive task but instead specialty jobs that require advanced education.

I read that as saying go to college get into massive debt and take a now "low" paying tech job that you will never be able to pay back the loans with. Theres plenty people with very and advanced degrees that are working as barristas because there AINT NO JOBS

[Frank Merton]

Until my illness I was actively involved in developing systems that replace various functions for insurance companies, such as underwriting, cash management, risk management, claims assessment, and of course paper handling and filing.

What is the effect of such systems when they succeed (often they don't)?

Generally it is a reduction in staffing needs. If this enables the company to grow its business because of a combination of cost savings and more effective service, they may not actually see a reduction in staff, but in those cases it comes at the expense of competitors without such systems.

In short, the company both saves money and makes more money and generally has fewer employees.

Where does the money go? It may go into building surplus (which is the base of money that regulators require before you are allowed to sell insurance -- to be sure you can pay the claims). This money usually is used to buy municipal bonds, helping governments borrow. The extra profits may also of course go into further construction of offices and stuff like that, although these things are a small part of a typical insurance company's expenses.

The bulk of the money then goes into higher salaries for the remaining employees, lower prices for customers, and dividends or other payouts to the owners. In all three cases it means extra cash in people's pockets that they would not otherwise have had. That extra cash either goes into more spending (creating jobs elsewhere in the economy) or more saving (which gets invested or deposited somewhere, again creating more jobs elsewhere in the economy.

The net result of automation, then, is not taking away employment, but improving living standards. As prices go down because of automation, people can afford more. There is adjustment for those displaced, and people in the employment market need to keep their eyes open and their resumes current and constantly maximize their flexibility, but these are things one should do regardless.

[Orcseeker]

I read that as saying go to college get into massive debt and take a now "low" paying tech job that you will never be able to pay back the loans with. Theres plenty people with very and advanced degrees that are working as barristas because there AINT NO JOBS

Don't forget the ever increasing cost of education phasing out the middle class, in turn, creating a two class system in which wealth is unevenly distributed. Where those in the lower class are effectively owned by the higher class due to the debts and loans taken out. Oh, and being a foreigner undergoing a high level education degree in another country it is easier for used to get a job in the US than another US student undergoing the same level of degree. The bulk of the US citizens are getting screwed over big time.

[Frank Merton]

Automation does not destroy jobs. I went into that into quite a bit of detail. It elevates living standards.

The problem in the States of accelerating educational costs stems from the fact that so many have their educations paid for through the government, either directly or in loans, and that debt burden is not understood by the borrowers, but it enables colleges to continue to raise fees and costs without making the hard decisions managing costs that competitive businesses must make.

Actually unemployment in the States would be a lot lower if the benefits were more limited so that people were obliged to actually take a job. Also, it isn't really all that bad if you compare the US employment picture with other countries, factoring in not just official unemployment but also under-employment. For instance, although the official unemployment in Vietnam is about average, the vast majority of young people "work" for their families in small enterprises, but are not really needed. This is a huge untapped but available labor pool.

[Orcseeker]

Automation does not destroy jobs. I went into that into quite a bit of detail. It elevates living standards.

The problem in the States of accelerating educational costs stems from the fact that so many have their educations paid for through the government, either directly or in loans, and that debt burden is not understood by the borrowers, but it enables colleges to continue to raise fees and costs without making the hard decisions managing costs that competitive businesses must make.

Actually unemployment in the States would be a lot lower if the benefits were more limited so that people were obliged to actually take a job. Also, it isn't really all that bad if you compare the US employment picture with other countries, factoring in not just official unemployment but also under-employment. For instance, although the official unemployment in Vietnam is about average, the vast majority of young people "work" for their families in small enterprises, but are not really needed. This is a huge untapped but available labor pool.

Can you justify the massive jump is tuition fees? It's a bullet in the heart of a country's prosperity. The damage is already evident.

Are you sure the bulk of the unemployed are simply leeching off the government? I watched a recent documentary here in Australia exclusively produced and aired by a TV show, Four Corners. It in fact shows hard working people who even have degrees trying to get a job or forced into the position of being paid peanuts for what they do in order to even try stay afloat.

Many of these are families, one of them was once middle class that often went on holidays and such. Yet effectively, they are now homeless and either live in their cars or rent out really small apartments that they all cram into. After the documentary concluded, the presenter of the show, Kerry Obrien, announced the news of a new billion dollar project conducted by the US military to develop a new type of fighter jet. What a joke.

Look at wealth distribution charts of the US. The bulk of these "welfare benefit" leeches equates to barely nothing in the eyes of the entirety of the system.

[Frank Merton]

When it comes to what goes on in the States I'm sure of nothing. I do know that no matter where you are automation is always in the end a blessing, raising living standards and creating jobs, although those made redundant have a problem.

Health care and education costs in the states are going through the roof. One reason is that in both areas there is fierce resistance to automation combined with structural difficulties. Factories and farms and even offices are much easier to automate. That means that relative prices for the things that are less automatable tend to go up faster than general prices. However there are other reasons too. Universities in particular just don't have to compete, and see competition as beneath them. They also don't watch costs nearly as much as profit-oriented enterprises. So they have no choice but to raise tuition and other fees -- far faster than overall inflation.

Of course in time they make it impossible for more and more to go to school. Fine, they say, we didn't get as many enrolees. That's great -- class sizes can be smaller. The idea of productivity is just not one they can imagine.

[ninjadude]

Robots take away very few jobs and actually end up creating far more jobs then what they take, the only problem is the jobs they create are specialty jobs that would require a degree and not the mass manufacturing or other repetitive jobs they are taking. For a single robot you need the person creating the software to run it and to continue updating it as new advancements are made, a person to fix the programming problems that arise commonly from complex programming, a person to fix/maintain the physical robot itself, the person to come up with a better robot, and lastly the person running the robot. The example I gave is not perfect but it gives an idea of how many jobs the robots end up creating because it isn't just one person making the program for the robot but instead a team of programmers making one a part of the total program and it is similar with the other jobs I mentioned.

With more robots being created and the more complex the robots are the more jobs the robots end up creating, but like I said the jobs they are creating are not the jobs people are used to doing like working in a factory or doing a repetitive task but instead specialty jobs that require advanced education.

exactly correct. Jobs are lost because of outsourcing.