Daily Archives: July 24, 2017

Writing for City Journal, Mark Mills warns that the robots (to use the shorthand) will be gnawing their way far higher up the food chain than we have seen before.

Heres the dirty little secret about automation: its easier to build a robot to replace a junior attorney than to replace a journeyman electrician. And that fact helps explain why economists and politicians are feeling misgivings about creative destruction, which, up to now, they have usually embraced as a net good for society.

In the age of the algorithm, though, theyre not so sure any more, and no wonder: instead of creative destruction coming to factories and farms, its sweeping through city centers and taking white-collar jobs. The chattering classes have talked and written for years about the end of work. Doubtless many fear that the end of their work is in the offing, this time around.

Creative destruction doesnt sound so benign when its coming your way.

Mills:

Consider a bellwether of more white-collar disruption yet to come: of the nearly 200 so-called Unicornsprivate, venture-backed companies such as Uber that are valued over $1 billion90 percent are in nonmanufacturing businesses. Theres a good reason for such a skewed focus. Supercomputer-class software in the cloud can perform, at minimal cost, once-daunting information-centric tasks, from reading X-rays to managing a passive investment fund. But the engineering challenges are far greater and many times more complex in cyber-physical systems, where software meets steel in real time

[W]ere in the midst of an upheaval in what we might call the means of management. The overall effect, I believe, will be the same as in the pasta boost to the economy and more jobsbut the makeover this time will affect the professional and managerial classes. We should expect them to be at least as vocal about it as many factory workers were a generation ago.

While I doubt that this revolution will create more jobs (at least any time soon and then theres its depressing effect on the wages of those who still have work to consider) Id agree with Mr. Mills that those being displaced will be at least as vocal about it. In fact, my guess is that they will be very much more vocal about it.

I touched on this topic last year on a piece on automation for NRODT.

Heres an excerpt:

When Americans do finally grasp what automation is doing to their prospects, rage against the machines (or, more specifically, their consequences) will blend with existing discontent to form a highly inflammable mix. This broader economic unease is already spreading beyond left-behinds and Millennials, but when we reach the point where even those who are still doing well see robots sending proletarianization their way, theres a decent chance that something akin to middle-class panic (a phenomenon identified by sociologist Theodor Geiger in, ominously, 1930s Germany) will ensue. Many of the best and brightest will face a stark loss of economic and social status, a blow that will sting far more than the humdrum hopelessness that many at the bottom of the pile have, sadly, long learned to accept. They will resist while they still have the clout to do so, and the media, filled with intelligent people who have already found themselves on the wrong side of technology, will have their back

Every revolution, whether at the polling station or on the street, needs foot soldiers drawn from the poor and the left behind. Still, its the leadership that counts. Add the impact of automation to the effects of existing elite overproduction and the result will be that the upheaval to come will be steered by a very large officer class angry, effective, efficient, a counter-elitelooking to transform the social order of which, under happier circumstances, it would have been a mainstay.

The consequences are unlikely to be pretty.

Go here to read the rest:

Automation: This Byte's For You - National Review

Pittsburgh Post-Gazette

Don Lindich's Sound Advice: Home automation without breaking the budget Pittsburgh Post-Gazette We recently received an Amazon Dot as a gift, and a few people have suggested we use it to integrate home automation into the room, but we find this a bit intimidating. The electrician will be wiring things soon and we need to make a decision. Any ...

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Don Lindich's Sound Advice: Home automation without breaking the budget - Pittsburgh Post-Gazette

Dan Gearino The Columbus Dispatch @DanGearinoMark Williams The Columbus Dispatch @BizMarkWilliams

It was nice while it lasted.

A surge in auto-manufacturing jobs since the start of the decade provided a desperately needed lift for Ohioas it climbed out of the worst recession since the Great Depression.

But that growth has stalled, based on recent figures,and analysts expect the job totals to remain flat or even shrink.

Much of the blame goes to a peak in auto sales after years of growth; automation is also a factor because it allows companies to produce more with fewer workers.

The question for Ohio is how will this shift reverberate through the economy. In short, the state will need to look more to other sectors to attract jobs, or find ways to counter the trend in auto manufacturing.

"It's not a catastrophe, but some of the bloom is off the post-recession growth," said Mike Hicks, a Ball State University economist. "For Ohio, that may be more painful, and for the Midwest in general. It is another factor that keeps growth less robust than we might have wished or expected it to be."

Ohio's auto-sector employment both vehicle manufacturing and the making of parts rose by 1,500 jobs, or 1.6 percent, lastyear; that was the slowest growth rate since the recession, according to federal employment data.Those two sectors employ about 97,000 in Ohio.

Looking ahead, modest increases probably will shift toward modest declines, according to a forecast by Moody's Analytics. The research firm expects that Ohio's transportation-sector employment will grow less than 1 percent this year, followed by decreases of less than 1 percent in each of the following six years.

"We'll be expecting this to be a slowdown, but we don't think it's going to be anything that will be severe enough to send Midwestern states into recession," said Brent Campbell, a Moody's Analytics' economist who covers Ohio.

Bound to happen

The stalled growth is a normal part of the economic cycle after the boom of the last few years. Auto-related employment in Ohio has increased about 35 percent since 2010, when automakers began adding jobs after the recession. Auto plants have been running at close to full capacity as sales of new cars and trucks doubledfrom 2009 to 2016.

There is no doubt that the tide has turned, however. Here is some of the evidence:

Ohio'semployment in manufacturing had flat-lined as of June compared with a year ago, with a drop of 200 jobs among manufacturers of "durable goods," which areitems meant to last at least three years, according to preliminary government data issued Friday.

Auto inventories were at 4.2 million vehicles as of July 1, the highest in 13 years, according to Automotive News.

New-vehicle sales are down 2.1 percent from 2016's record pace.

Production in the first five months of 2017 at auto assembly plants in the district covered by the Federal Reserve Bank of Cleveland all of Ohio, western Pennsylvania, eastern Kentucky and northern West Virginia was down about 9 percent from the same period of 2016, according to the bank.

At the same time, the industry is contending with an unsettled political climate.

President Donald Trump has threatenedto enact stiff tariffs or quotas on steel imports. Although such a move would benefit U.S. steel producers, it probably would lead to higher prices for trucks and cars and potentially further depress sales because automakers would have to use more-expensive domestic steel.

At the same time, banks and other lenders have tightened some lending for auto buyers,particularly for those with low credit scores.

If these factors weren't enough, manufacturers continue to figure out how to produce more with fewer workers.

"They are developing remarkable technologies. It is much more sophisticated, but needs fewer people to operate," said Eric Burkland, executive director of the Ohio Manufacturers' Association. Workers "are higher-skilled, more highly compensated."

Openings available

Despite the slowdown in hiring, manufacturers have openings, and Burkland said they routinely talk about how tough it is to find applicants.

That trouble finding workers is another reason that job growth is being held in check, said Ned Hill, an Ohio State University economist.

"If the cost of semi-skilled labor gets too high, including the cost of health-care benefits, work will be automated," he said. "This is looming in the logistics side of the business."

But Hill does see a silver lining: Predictions of a decrease in manufacturing jobs do not account for normal attrition, such as retirements. So, even if the state's total is falling, there will be openings.

Also, other sectors will be growing. Moody's Analytics and others expect service and health-care jobs to become a larger share of Ohio's economy. Economic-development leaders can use this information to help attract more jobs in the fields most primed for growth.

Unexpected events could change the landscape, however. Hill said the only way he sees more-significant auto-related employment in the future is the addition of an assembly plant, something he doubts will happen.

In addition, the state will need to hold on to the assembly plants it has: two Jeep plants in Toledo, a General Motors plant in Lordstown, and Honda plants in Marysville and East Liberty.

In addition, many plants make engines, transmissions, vehicle bodies and other auto parts.

The president of the United Auto Workers union raised concern last week that GM's lagging sales could lead to job losses. Reuters reported that GM is considering a phaseout of U.S. production of several passenger-car models. Absent from the list, which Reuters said came from unidentified sources familiar with the plans, is the Chevrolet Cruze, the model assembled in Lordstown.

Honda appears to be a stable presence in central Ohio, where it makes the Accord in Marysville and the CR-V in East Liberty, among other models.The automaker also has a research-and-development office and has attracted a network of other companies that manufacture parts, making the region a hub for auto production.

Asked about Honda's plans, spokesmanChrisAbbruzzese said:

"We're confident that our products and our flexible manufacturing operations will continue to provide Honda and our suppliers with the ability to maintain a significant presence in central Ohio."

mawilliams@dispatch.com

@BizMarkWilliams

dgearino@dispatch.com

@DanGearino

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Softening vehicle sales, rising automation halt growth in Ohio's auto jobs - The Columbus Dispatch

The Hindu

'I'm concerned about automation replacing jobs' The Hindu It highlights the challenges that are coming ahead and one of those big challenges is that if you look at many economic assessments, they are all saying the radical displacement of jobs due to automation. A big component of that automation is robotics, ...

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'I'm concerned about automation replacing jobs' - The Hindu

Toronto Sun

Automation Nation: Amazon's Brampton facility putting robotics to the ultimate test Toronto Sun The scene resembles something out of Wall-E, with these nine-foot automated Amazon Robotics Drive Units scanning QR codes to detect their path and moving in different directions within a grid. Using built-in sensor technology, the robots don't crash ... Robots Are Moving in on E-commerce PackingFortune all 4 news articles »

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Automation Nation: Amazon's Brampton facility putting robotics to the ultimate test - Toronto Sun