limits of automation

[Whereisup]

...over the past decade, a very large number of large corporations have downsized due to automation, firing significant fractions of their workforces...

People say that, and too often words go one way and actions go another. Let's deal with actions.

The bls.gov site reports that 144,386,000 Americans are employed --mostly by large corporations-- and ten years ago the number was 138,424,000. What we got is that "over the past decade" any factory automation/layoffs that we've had were more than offset by hirings at the companies that are automating the older factories.

Automation is still in it's early stages, but even with the automation we have, there would be more jobs than that now if the automation had not occurred.

One question one might ask is: Why wouldn't the corporations keep on automating as new systems come on line?

Also, some of the automation is still quite new. For example, a couple of years ago, the first experimental automated cars were still in races in the desert, and they tended to have accidents after a few dozen miles on average. Now, automated cars that can drive themselves are fully reliable. The only thing that is keeping them from the market is that people are scared to drive them. So they are being introduced gradually, starting with cars that park themselves, cars that stop to avoid an accident, etc. The automobile companies will be adding features until the cars are fully automated.

Then there is always some lag time while corporations gather together the money to buy new automated equipment.

Jim

 

[expat_panama]

...Why wouldn't the corporations keep on automating as new systems come on line?...

You know that automation costs money and at low wages automation isn't worth it and at high wages automation is cheaper. Doing construction work in Panama has often meant a lot of excavation work was done buy guys with shovels. Labor's cheap, equipment's expensive. Today the minimum wage goes from $1.60/hr up to $2.20/hr and that will mean we'll be seeing more backhoes being called in and a lot of unskilled labor getting let go.

 

[Whereisup]

...Why wouldn't the corporations keep on automating as new systems come on line?...

You know that automation costs money and at low wages automation isn't worth it and at high wages automation is cheaper. Doing construction work in Panama has often meant a lot of excavation work was done buy guys with shovels. Labor's cheap, equipment's expensive. Today the minimum wage goes from $1.60/hr up to $2.20/hr and that will mean we'll be seeing more backhoes being called in and a lot of unskilled labor getting let go.

That is certainly one of the factors.

Another factor is that machines don't strike, talk back, become upset, and so forth. So for many employers, it would be much easier to work with machines, even at a somewhat higher costs, than to supervise people.

Jim

 

[SteadyMercury]

Automation is still in it's early stages, but even with the automation we have, there would be more jobs than that now if the automation had not occurred.

Maybe, maybe not.

As Expat pointed out automation creates jobs as well. We had full employment (<5% unemployment) as recently as 2007, yet had an unemployment rate as high as 10% in the early 80s. Do you believe there wasn't much automation in 2007 compared to 1982? The number of jobs usually has a lot more to do with economic cycles than automation, as unemployment numbers have bounced around above/below 5% since the numbers have been tracked, despite constant improvements in productivity via automation.

One could lament the huge drop in the number of people employed as phone operators, but at the same time couldn't have imagined improvements in technology/manufacturing/automation would lead to 4 million people working for a wireless industry that didn't exist yet.

 

[william the wie]

Automation is still in it's early stages, but even with the automation we have, there would be more jobs than that now if the automation had not occurred.

Maybe, maybe not.

As Expat pointed out automation creates jobs as well. We had full employment (<5% unemployment) as recently as 2007, yet had an unemployment rate as high as 10% in the early 80s. Do you believe there wasn't much automation in 2007 compared to 1982? The number of jobs usually has a lot more to do with economic cycles than automation, as unemployment numbers have bounced around above/below 5% since the numbers have been tracked, despite constant improvements in productivity via automation.

One could lament the huge drop in the number of people employed as phone operators, but at the same time couldn't have imagined improvements in technology/manufacturing/automation would lead to 4 million people working for a wireless industry that didn't exist yet.

You're trying to refute an over simplified model. To take an argument the two of us go round and round on from time to time. EMH has a 97% correlation with the stock market at the 95% level of confidence but a 93% correlation at the 99% level of confidence using the same data. Both statements are true and verifiable if you are willing to pay for the data it's just people lock in on what is most comfortable to them. Other examples abound but if you stick with people who make the wrong decision then WIP is right.

Plenty of people go on social security or disability rather than retrain when they get hit by automation usually that is an extremely wrong decision but it does happen. Likewise people invest way too much in transitional technologies such as 8-track, Tivo or right now cable. Vynyl is now making a comeback of sorts because it is harder to pirate music delivered that way and the artist makes more. Stupid decisions are things people do not want to admit to.

 

[SteadyMercury]

You're trying to refute an over simplified model.

Actually it sounds like you are trying to overcomplicate a simple argument. I submit the number of available jobs has varied more on economic cycles than increased automation, since automation and the resulting increase in productivity has increased steadily over time but unemployment has not.

Plenty of people go on social security or disability rather than retrain when they get hit by automation usually that is an extremely wrong decision but it does happen.

Median retirement age is higher now. There are far more people on disability but that is more an issue with a poorly run system that is easily abused.

 

[expat_panama]

...machines don't strike, talk back, become upset...

I seem to remember my first car did that a lot...

 

[Whereisup]

Automation is still in it's early stages, but even with the automation we have, there would be more jobs than that now if the automation had not occurred.

Maybe, maybe not.

As Expat pointed out automation creates jobs as well. We had full employment (<5% unemployment) as recently as 2007, yet had an unemployment rate as high as 10% in the early 80s. Do you believe there wasn't much automation in 2007 compared to 1982? The number of jobs usually has a lot more to do with economic cycles than automation, as unemployment numbers have bounced around above/below 5% since the numbers have been tracked, despite constant improvements in productivity via automation.

One could lament the huge drop in the number of people employed as phone operators, but at the same time couldn't have imagined improvements in technology/manufacturing/automation would lead to 4 million people working for a wireless industry that didn't exist yet.

You're trying to refute an over simplified model. To take an argument the two of us go round and round on from time to time. EMH has a 97% correlation with the stock market at the 95% level of confidence but a 93% correlation at the 99% level of confidence using the same data. Both statements are true and verifiable if you are willing to pay for the data it's just people lock in on what is most comfortable to them. Other examples abound but if you stick with people who make the wrong decision then WIP is right.

Plenty of people go on social security or disability rather than retrain when they get hit by automation usually that is an extremely wrong decision but it does happen. Likewise people invest way too much in transitional technologies such as 8-track, Tivo or right now cable. Vynyl is now making a comeback of sorts because it is harder to pirate music delivered that way and the artist makes more. Stupid decisions are things people do not want to admit to.

I sympathize with your "going round and round". I have a problem of quickly getting bored when things begin to repeat themselves.

I will make a general statement as to method. Many people think about what is happening right now, including many statistical measures.

There is less talk about long term trends, and less understanding of them. For example, I remember someone saying that she didn't know the stock market ever went down. She thought it always went up.

In any case, automation produces changes that are in part qualitative. Note that the automation in the future will be different from the automation in the past. Therefore, making predictions about what automation will do in the future can't be grounded on the effects of automation in the past, and seeing trends into the future is somewhat subtle.

Jim