Industry Market Trends

Are Robots Killing Jobs or Creating Them?

Feb 05, 2013

Does the increasing use of production robots and other automation machinery eliminate jobs and lead to higher unemployment, or does it provide greater efficiency, boost business, and ultimately spur job growth?

Drew Greenblatt, the president of Marlin Steel, an American company that manufactures wire baskets and sheet metal products, is a strong supporter of automation and robotics as job-boosters. Greenblatt praises the way robots have helped his company grow 25 percent and increase operational safety.

Greenblatt told that when he bought the company, which was the largest bagel basket maker in the country, in the late 1990s, "the most modern technology in the plant was a fax machine," and the top workers could produce a basket by hand every 12 seconds. Today, robots can make five baskets per second, with precision that is "light years beyond what we were capable of before."

As a result of much greater precision capability, Marlin started making industrial containers and technologically precise products for the aerospace, military, and healthcare fields, among others.

Using robots makes his company "more competitive, increases demand for our products, and enables us to add workers," Greenblatt explained, citing the wider range of orders he's been able to accept thanks to his robots' capabilities. The increase in business from recently winning a major customer has produced enough work to hire over a dozen additional employees to handle the logistics of meeting orders.

The experiences at Marlin in many ways define the pro-robot side the debate: Automation eliminates menial jobs people don't really want to do, such as bending wires by hand to make baskets, while productivity gains allow companies to hire people for better jobs, such as overseeing the robots, selling the expanded product line, or marketing the company's new capabilities.

Greenblatt argues that robots have made his workers more valuable and highly paid than their competitors. "Recently, we won a huge order for sheet metal brackets," he noted. "The brackets were formerly made in China by workers who earned $2.50 an hour and produced perhaps 50 an hour. Our sheet metal operator earns 10 times that rate, but sets up a robot that produces 2,000 brackets an hour."

Advocates of automation argue that 200 years ago, most Americans were farmers, producing just enough to feed the population. Today, with advanced automation, about 2 percent of Americans are employed in full-time agricultural work, yet they produce much more food than we can consume.

However, critics of the automation boom claim that such technological advancements are killing off middle-class jobs. Robots and automated systems have not only eliminated elevator operators and highway toll collectors, but are also making inroads into higher-skilled job functions, and the long-term effect in job losses among human workers may be much more severe than most expect.

Automating certain routine processes is a clear case of maximizing efficiency. Yet robots are increasingly capable of doing more sophisticated tasks. In 2012, there was a 40 percent increase in the sale of robots used for assembly work, a 37 percent gain in spot welding, 24 percent in arc welding, 13 percent in coating and dispensing, and 12 percent in metalworking, according to the Robotic Industries Association (RIA). In total, there are approximately 225,000 robots now at use in U.S. factories, though the RIA estimates that only 10 percent of the firms that could potentially automate their work have installed robots so far, meaning there is considerable room for expansion of robotic labor.

Thanks to automation, entire categories of jobs are disappearing. Yet these jobs are often being replaced with others, and seizing an opportunity to automate at the right time can yield considerable benefits.

In the mobile phone manufacturing industry, for example, robots are needed to do precise tasks beyond the capabilities of human workers. China and other countries were quick to automate those tasks and won a dominant share in global cell phone production, while the United States hardly manufactures any cell phones at all.

Even small businesses, which are the main engine of growth in the U.S. economy, are relying more on technology and automation and less on employees. A series of articles from the Associated Press exploring the relationship between robots, technology, and hiring found that while start-ups continue to account for much of the job growth in developed economies, entrepreneurs can "launch businesses with a third fewer employees than in the 1990s," thanks to widely available software that reduces the need for administrative support and back-office jobs.

In fact, some robots are capable of tackling more analytical tasks as well, like generating newspaper stories and reports based on statistics and stock data. As Wired explains, any information-intensive work will soon be within the reach of these white-collar robots.

So should American workers, particularly those at manufacturers, be worried about the looming invasion of robots and automated systems into the workplace?

Not necessarily. One estimate puts the percentage of people working on farms in America around 1800 as high as 90 percent. As increased automation reduced the need for farm hands, these workers and their families were free to find work in factories, skilled trades, or to pursue higher levels of education.

Those who were determined to be agricultural workers found it a difficult transition to make, but over the succeeding two centuries, the shift away from human-intensive labor yielded tremendous growth in the U.S. economy and a vast improvement in overall quality of life for most citizens. In other words, the benefits to the economy generally outweighed the losses. Moreover, agricultural products themselves became far more plentiful and much less costly to produce.

We're seeing thousands of new jobs being created in the automation industry itself. And just as most Americans in 2013 perform jobs that were undreamed of 100 years ago, a century from now the spread of robotics will have enabled the creation of new opportunities for human workers that are unimaginable to us today.