Automation isn't the biggest threat to factory jobs in the United States

Automation isn’t the biggest threat to factory jobs in the United States

The number of American workers who quit their jobs during the pandemic, over a fifth of the workforce, may make up one of the largest American trade union movements in recent history. Workers demanded higher pay and better conditions, driven by rising inflation and pandemic awareness that employers expected them to risk their lives for low wages, mediocre benefits, and little protection from abusive customers, often while corporate stock prices soared. At the same time, automation has become cheaper and smarter than ever. Robot adoption hit record highs in 2021. This was no surprise given previous trends in robotics, but it was likely accelerated by the pandemic-related labor shortage and Covid-19 safety requirements. Will robots cancel the work of licensed millennials who “don’t want to work” or could this technology actually improve workers’ jobs and help companies attract more enthusiastic employees?

The answer depends on more than what is technologically feasible, including what actually happens when a factory installs a new robot or a checkout aisle is replaced by an automatic pay station and what future possibilities await displaced workers and their children. So far, we know that the benefits of automation have proven to be notoriously unequal. A key component of 20th-century productivity growth came from replacing workers with technology, and economist Carl Benedikt Frey notes that American productivity grew 400 percent from 1930 to 2000, while average leisure time increased. only 3%. (Since 1979, American labor productivity, or dollars created per worker, has risen eight times faster than the hourly wages of workers.) During this period, technological luxuries became a necessity and new types of work flourished, while labor unions that used to guarantee liveable wages have dissolved and less educated workers have fallen further behind those with high school and college degrees. But the trend is different among industrialized countries: from 1995 to 2013, America experienced a 1.3% gap between productivity growth and median wage growth, but in Germany the gap was only 0. ,2%.

The adoption of technology will continue to increase whether America can equally distribute the technological benefits or not. So the question becomes: how much control do we actually have over automation? How much of this control depends on national or regional policies and how much power could individual companies and workers have within their workplaces? Is it inevitable that robots and artificial intelligence will take all of our jobs and over what time frame? While some scholars believe that our fates are predetermined by the technologies themselves, emerging evidence indicates that we could have a significant influence on how such machines are used within our factories and offices, if only we can figure out how to wield this power.

While 8 percent of German manufacturing workers quit their jobs (voluntarily or involuntarily) between 1993 and 2009, 34% of U.S. manufacturing workers quit their jobs during the same period. Thanks to workplace bargaining and sectoral wage setting, German manufacturing workers have better financial incentives to stay in their jobs; The Conference Board reports that the average German manufacturing worker earned $ 43.18 (plus $ 8.88 in benefits) per hour in 2016, while the average American manufacturing worker earned $ 39.03 with just $ 3.66 of benefits. Overall, Germans across the economy with a high school or “medium skills” vocational certificate earned $ 24.31 per hour in 2016, while Americans with comparable education averaged $ 14.55. time. Two case studies illustrate the differences between American and German approaches to manufacturing workers and automation, from policies to supply chains to worker training systems.

In a town on the outskirts of the Black Forest in Baden-Württemberg, Germany, complete with winding cobbled streets and pointed red roofs, there’s a 220-person factory that has spent decades as a global leader in safety-critical metal equipment for sites such as highway tunnels, airports and nuclear reactors. It’s a large, unassuming warehouse next to a few acres of golden mustard blossoms. When I visited my colleagues from the MIT Interactive Robotics Group and the Future Work Lab of the Fraunhofer Institute for Manufacturing Engineering and Automation (part of the diverse Fraunhofer network for industrial research and development supported by the German government), the senior factory manager informed us that his worker attitudes, like the downtown 14th-century church, hadn’t changed much in his 25-year tenure at the factory. Teens have still entered the company as apprentices in metal fabrication through the German dual work-study vocational system, and wages are high enough that most young people expect to stay in the factory and move up through the ranks to retirement, earning a respectable life along the way. Smaller German manufacturers can also get government subsidies to help send their workers back to school to learn new skills that often equate to higher wages. This manager had worked closely with a nearby technical university to develop advanced welding certifications and was proud to rely on his “family of welders” of local companies, technology integrators, welding trade associations and educational institutions for support with new technologies and training.

Our research team also visited a 30-person factory in urban Ohio that produces metal artifacts for the automotive industry, not far from downtown’s empty warehouses and closed office buildings. This factory owner, grandson of the company’s founder, complained that he had lost his unskilled, minimum-wage technicians to any nearby job willing to offer a better salary. “We are like a training company for large companies,” he said. He had given up on finding properly trained workers and resigned himself to finding unskilled workers who he hoped could be trained on the job. About 65 percent of his company’s business used to go to an automotive supplier, which outsourced its metal fabrication to China in 2009, forcing the Ohio company to shrink to a third of its previous workforce.

While the Baden-Württemberg factory held market share by selling specialized end products at premium prices, the Ohio factory produced raw material components for sale to middlemen, which they then sold to powerful auto companies. So the Ohio firm had to compete with low-wage wholesale manufacturers in China, while the highly specialized German firm had few foreign or domestic competitors forcing it to cut its skilled workforce or cut wages.

Welding robots have replaced some of the workers’ duties in the two factories, but both are still actively hiring new people. The German company’s first robot, purchased in 2018, was a new “collaborative” welding arm (with an intuitive user interface) designed to be used by workers with experience in welding, rather than professional robot programmers who are not. they know the intricacies of welding. Training welders to operate the robot is no problem in Baden-Württemberg, where everyone arriving as new welders has a professional degree representing at least two years of training and a hands-on apprenticeship in welding, metal fabrication and 3D modeling. Many of the company’s welders had already learned how to use the robot, supported by previous training courses. And although the manager of the German company was happy to save on labor costs, the main reason for the acquisition of the robot was to improve the health and safety of the workers and to minimize tedious and repetitive welding sequences, in so that we could continue to attract young skilled workers who would stay there. Another German factory we visited had recently purchased a robot to maintain a machine during the night shift, so fewer workers would have to work overtime or come in at night.

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