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Cliff Holste

Supply Chain Digest
Material Handling Editor

Logistics News

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

April 20, 2016

Logistics News : Will Automation Lead to Fewer Jobs?


The U.S. Job Market must be Re-tooled to take Advantage of Automation

 

During this super-charged political season jobs are at center stage – and for good reasons. Most people understand that the economic health of an industrialized country depends on its ability to provide jobs for everyone that wants/needs a job. Based on government statistics, at any point in time about 3% of the adult population has some type of disability that prevents them from participating in the job market. This static is built into the U.S. economy and its social services programs. However, for most able bodied adults having a full time job is essential to supporting themselves and their family. When unemployment grows above the 3% it begins to put stress on state and federal social support systems as consumer spending slows and tax revenues decline.

With consumer spending accounting for two-thirds of economic activity, it is critical that new job opportunities are being created at a rate that at least keeps up with the population growth. Up until a few years ago that has not been a problem.

Holste Says...

Political and business leaders must rethink social and economic systems understanding how automation impacts on the working class. They must begin revamping public education systems in order to produce the technological skills that are needed in the automation age.

What do you say?

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Many economics believe that our current economic woes have more to do with politics than job creation. Others warn that the hard truth about the U.S. economy today and going forward is that traditional manufacturing businesses and service providers don’t need as many workers as before. This, they say, is the consequence of the rapid adoption of automation that has enabled the U.S. workforce to become the most productive in the world.

The ascension towards higher productive levels in the U.S. began with the realization of the global market impact in the late 80’s and as a strategy based on competing with countries where wages and living standards are much lower. The unexpected consequence of successfully reaching higher productivity levels across the vast spectrum of the U.S. job market is that the thousands of jobs created by domestic providers of automation cannot offset the millions of production and service related jobs lost to automation. For example:

  • Manufacturing has become highly automated over just the last few decades
  • Warehousing and Distribution is rapidly becoming more automated
  • Voice recognition technologies are automating telecommunication systems
  • Computerized kiosks and ATM’s replace checkout clerks, gas station attendants and automate banking services
  • Scanners and high resolution cameras replace security personnel and automatically generate speeding tickets
  • The widespread use of computers has greatly improved the efficiency of human resources across all job related tasks

The above is only a small partial list – but the job losses they represent are huge and they are not coming back.

While we enjoy the many convinces that automation technology provides in our daily lives, we are left to wonder where all the people have gone that use to do these jobs. At the same time advances in medical technology is extending our average life expectancy – we are living longer!

Final Thoughts

The geopolitical issues are complex. Political and business leaders must rethink social and economic systems understanding how automation impacts on the working class. They must begin revamping public education systems in order to produce the technological skills that are needed in the automation age. Left unresolved, those who have jobs will increasingly bear the burden of supporting an ever increasing social service network.

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