Machines are worshipped because they are beautiful and valued because they confer power; they are hated because they are hideous and loathed because they impose slavery. Bertrand Russell
Manufacturing output continues to improve, even though the number of manufacturing jobs in the U.S. continues to decline and this trend will not stop. While some Jobs have gone overseas, the new trend suggests that automation has eliminated and will continue to eliminate a plethora of jobs. As this trend is in the early phase, the momentum will continue to build in the years to come.
Machines are faster, cheaper and don’t complain; at least not yet. So from a cost cutting and efficiency perspective, there is no reason to stick with humans. This, in turn, will continue to fuel the wage deflation trend. Sal Guatieri an Economist at the Bank of Montreal in a report titled “Wage Against the Machine,” states that automation is responsible for weak wage growth.
“It’s unlikely that insecurities from the Great Recession are still weighing, given high levels of consumer confidence,” he wrote. “However, automation could be a longer-lasting influence on worker anxieties and wages. If so, wages could remain low for a while, restraining inflation and interest rates.”
Guatieri goes on to state that “The defining feature of a job at risk from automation is repetition”. This puts a lot of jobs at risk, many of which fall under the so-called highly skilled category today; for example, Accountants, Lawyers, Radiologists, X-Ray technician, etc.
North American business order record number of robots
In 2016, they order 35,000 robots, 10% more than in 2015. But that is nothing compared to China, which ordered 69,000 robots in 2016, South Korea ordered 38,000 and Japan for its small size ordered 35,000 robots. This proves that jobs are not going overseas but are being taken over by machines. Nothing will stop this trend; a trend in motion is unstoppable.
The largest user of robots is the automotive sector; in North America, over 20,000 of the 35,000 robots went to the automotive sector. Once upon a time, over 80% of the work done in this sector was done by humans, but robots perform today over 80%.
The total amount spent on robots in 2015 was $71 billion; experts project that this amount will surge to almost $135 billion by 2019. The trend continues to gain traction. Amazons purchase of whole foods and Lidl’s entry into the US market has triggered a grocery war, and automation is going to be one of the main ways to remain competitive in this industry. Amazon already has a massive robot workforce; they use over 45,000 robots. Sales of robots will triple from current levels by 2019
The number of robots sold in the US will jump by 300% over the next nine years, according to the ABI research. It’s simple math; more automation equates to fewer jobs. One industrial robot replaces about six jobs. For now, the automotive industry continues to lead the way, but as companies are pushed to become more competitive, we expect companies in every sector to embrace automation.