The next earth moving effect of technology
Whereas the last few decades have had technology spawn the advancement of computers at an exponential rate, that very advancement and the computer power it has created will bring forth the next major change in human life and that will be the effect of robots on society.
The power of computation which grew by at an ever increasing rate as each computing power leap brought the very computational ability that created it subsequently more powerful computers, that very power will now advance robotic capability exponentially as well.
While robots as portrayed in movies past focused on domestic servants, the real changes I see will be their effect in the employment area with the substitution of humans in the work force. This will also then cause a shift in the industries people are employed in.
With the perpetual rise in wages both inflationary and by mandate (such as minimum wage laws), the incentive for businesses to replace live bodies with machines will increase over time. Also adding to employee costs to businesses are taxes, healthcare, sick leave, maternity leave and more. It seems that paychecks are forever shrinking even as employment costs to businesses are rising.
Additional considerations are such things like robots don’t complain, don’t take sick or maternity leave (except the occasional breakdown), can work 24 hours a day and don’t require other “facilities” that humans do. Seemingly difficult realities to overcome to say the least
Coupled with the fall in robot prices due to manufacturing techniques caused by the very same increase in computational capabilities while the costs to businesses for human employees will continue to increase will mean the incentive to hire robots will increase as time goes by.
The multitude of businesses which will be impacted run the gamut from apple production to zoo maintenance and all points in between. Some examples would be fewer taxi and bus drivers (self-driving cars) fewer storeroom clerks, waiters and waitresses, super market checkers and even teachers.
The possibilities for robotic replacements are enormous and will only increase over time as robots get more and more sophisticated and less costly to produce. Indeed even designing and producing the robots will likely be eventually automated. Few industries will be spared the advancement.
The question then becomes multifaceted. As more robots replace people, economic models determine that wages will experience downward pressure as the workforce of people will dwindle while the population increases.
Less demand in the face of more supply causes prices to drop. Whether regulatory bodies or a mass outcry against such downward pressure stems the fall in wages remains to be seen. If it does, a conundrum will arise.
How does a society reconcile the two opposing forces of supply and demand while addressing public opinion?
This may present a predicament instead of a problem whereas problems have solutions but predicaments only have outcomes.
There may be solutions but they may negate the very savings businesses are trying to accomplish. Robot taxes or tariffs may be implemented. Special assessments to aid unemployment may be attached to each robot in service or at time of purchase. The premise being to make operating a robot more costly to discourage human replacement. And around and around we go.
Although the robotic industry itself will employ more and more people as robots become more prevalent, the increase in the robotic industry will be unlikely to keep up with the number of people put out of work by these very same robots.
The problem is a real one and will only become more visible with each passing day. It is said corporations aren’t people. No matter what side of this debate one may be on, the fact is corporations and indeed businesses everywhere may be more and more in alignment with that statement as real people are given the pink slip in favor of a different kind of pink slip, the ownership title to Robby the Robot.
This article expresses the opinions of Marc Cuniberti. Mr. Cuniberti hosts Money Matters on KVMR FM Radio carried on over 65 stations nationwide. Mr. Cuniberti is an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Marc can be contacted at SMC Wealth Management, 164 Maple St #1, Auburn, CA 95603 (530) 559-1214. SMC and Cambridge are not affiliated. His website is www.moneymanagementradio.com. California Insurance License # OL34249. This opinions expressed do not necessarily reflect those of Cambridge. KVMR, this newspaper nor their staff, members or underwriters.