Rise of the Robots Speeds Up in Pandemic With U.S. Labor Scarce

American workers believe that the lack of employment opportunities due to the pandemic will result in better salaries. This could mean that robots will take over their jobs.
U.S. businesses have been encouraged to invest in automation due to rising wages and labour shortages. One-third of the respondents to a Federal Reserve survey were looking into automation for replacing employees. Over the last month, executives of a wide range of businesses supported this trend in earnings calls.

Domino’s Pizza Inc. is “putting in place equipment and technology that reduce the amount of labor that is required to produce our dough balls,” said Chief Executive Officer Ritch Allison.
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Mark Coffey, a group vice president at Hormel Foods Corp., said the maker of Spam spread and Skippy peanut butter is “ramping up our investments in automation” because of the “tight labor supply.”

Since the beginning of time, automation has helped to automate mundane tasks. It’s made remarkable progress in the past decade: The number of industrial robots installed in the world’s factories more than doubled in that time, to about 3 million. The automation trend is also spreading to service industries.

The U.S. economy has been behind Asian and other developed economies. But the pandemic may help to catch up. There are 10.4 million jobs available as of August. Record numbers of Americans have quit their jobs. This is making it more difficult to find staff.

Ametek Inc. produces automation equipment that is used by industrial businesses, including motion trackers. These are used for everything from the steel and lumber industries to packaging plants. Chief Executive Officer David A. Zapico says that part of the company is “firing on all cylinders.” That’s because “people want to remove labor from the processes,” he said on an earnings call. “In some places, you can’t hire labor.”

Automation has been a concern for unions since the beginning. At U.S. ports, which lag their global peers in technology and are currently at the center of a major supply-chain crisis, the International Longshoremen’s Association has vowed to fight it.

Companies that say they want to automate “have one goal in mind: to eliminate your job, and put more money in their pockets,” ILA President Harold Daggett said in a video message to a June conference. “We’re going to fight this for 100 years.”

Some economists have warned that automation could make America’s income and wealth gaps worse.

“If it continues, labor demand will grow slowly, inequality will increase, and the prospects for many low-education workers will not be very good,” says Daron Acemoglu, a professor at the Massachusetts Institute of Technology, who testified Wednesday at a Senate hearing on the issue.

That’s not an inevitable outcome, Acemoglu says: Scientific knowhow could be used “to develop technologies that are more complementary to workers.” But, with research largely dominated by a handful of giant firms that spend the most money on it, “this is not the direction the technology is going currently.”

Knightscope produces security robots that look like R2-D2 and are capable of patrolling factory perimeters. The company says it’s attracting new clients who are having trouble hiring workers to keep watch. The robots are priced between $3.50- $7.50/hour, according to Stacy Stephens (Chief Client Officer) and can be put in place within one month.

Los Angeles International Airport has a new customer. This airport is one of the busiest U.S. Airports. Knightscope robots, which are equipped with sensors and cameras, will soon be monitoring its parking lot.

They are “supplementing what we have in place and are not replacing any human services,” said Heath Montgomery, the airport’s director of public relations. “It’s another way we are providing exceptional guest experiences.”

© 2021 Bloomberg L.P.

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