Man vs. Machine: Are Any Jobs Safe from Innovation?

By Thomas Schulz

Photo Gallery: Automating Our Way Out of Jobs Photos
DPA

Part 2: Cheaper Robots, Fewer Humans

Still, many economists remain unconvinced. Critics argue that there have been constant warnings of the consequences of technological transformations since the beginning of the industrial revolution, yet these fears have always turned out to be exaggerated. These observers believe that this will also be the case now, and they insist that the economy and the labor market are currently merely undergoing a period of change that will ultimately lead to a new equilibrium.

There is, however, a major difference with regard to previous technological advances. Up until now, physical labor has been replaced by machines, for example, robots doing the jobs of assembly-line workers in the automotive industry. Indeed, factory automation has led to far fewer changes in the working world than anticipated because, for a long time, robots were simply too expensive and inflexible. But this, too, has undergone sweeping changes in recent years.

An MIT engineer has founded a mechanical engineering company named Rethink Robotics that has developed an industrial robot which doesn't take months to install and program, but can simply be plugged in and made ready to assume production-line functions in less than an hour -- and at a price of just $22,000 (€16,700).

According to a new study by the international consulting firm McKinsey, the costs of factory automation relative to human labor have already dropped to nearly half of what they were in 1990. McKinsey predicts that the rise of the machines will continue in affluent countries and put more pressure on wage costs, but that this trend will also spill over into Asian countries, where wages are still rising.

This development is already in full swing. The Taiwanese electronics-manufacturing giant Foxconn, which makes products such as the iPhone, has announced that it intends to gradually install over 1 million robots. Already now, local media have reported that three-quarters of Foxconn workers have been replaced by machines in some departments.

This revolution is not just limited to the automation of factories or the use of robots. Even greater changes may be in store as service-sector jobs become automated, with advances like electronic accounting, online retailing and the computerization of nearly every office activity.

Many of the jobs in a modern society are ultimately nothing more than a form of information processing. The more structured the task, the more easily it can be performed by a machine. "If you are a routine cognitive worker following instructions, you have been under a lot of downward wage pressure for years now," says McAfee, adding that machines are often more cost-effective these days.

Threatened and Safer Jobs

While many companies are investing less and less in personnel, they are spending more on information technology. Not only does this trend reduce the total number of available jobs, it also contributes to a social shift that has already been observable for some time now: Gains in prosperity disproportionately benefit upper income groups.

Meanwhile, the pressure on lower income groups is increasing. Today's ongoing technologicalization goes hand in hand with the increasing complexity of work tasks -- and, ironically, a growing competition for jobs that demand fewer skills and lower education levels.

But the prospects for the future are not very rosy even for computer nerds. Indeed, it is the IT departments of large companies, in particular, that are feeling the brunt of this technological transition. Since a burgeoning number of computer applications are being transferred to the cloud, fewer skilled workers are needed on the ground.

Still, there remain many professional fields that, at least for the foreseeable future, will not be threatened by machines and are therefore unlikely to experience any downward wage pressure, such as service staff and truck drivers.

But for how long? Over the past few weeks, the first states in the US have given the green light for the road use of a driverless car designed by Google.

"There are approximately 4 million truck, taxi, limousine and bus drivers in the United States, not to mention gas station attendants and traffic policemen," writes Posner, the University of Chicago scholar, in his essay on automation and employment. "Not all these jobs will be eliminated overnight," he says, "but they could go quite fast."

Translated from the German by Paul Cohen

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