This is from Bloomberg:
German robot maker Kuka AG estimates a typical robot costs about 5 euros ($5.38) an hour to operate over its life. The hourly compensation cost of U.S. manufacturing was $36.49 per employee in 2013, according to The Conference Board.
There is no possibility that the invasion of the robots is going to be reversed. The price per hour guarantees this.
As the price per hour of the robots continues to decline, as we can be certain that it will, there is no question that robots will replace half or more of the employees in American manufacturing. The employees who will maintain their jobs will be the employees who can maintain the robots. In other words, they will be knowledge workers, not muscle workers. This trend has been going on for over a century, and there is no reason to imagine that it is going to stop.
I want to get back to a topic that I have mentioned before. Foreign manufacturing has had very little effect on employment in American manufacturing industries. The overwhelming impact on employment in American manufacturing has come from technological developments. Economists know this. The voters do not.
Three factors have contributed to changes in manufacturing employment in recent years: Productivity, trade, and domestic demand. Overwhelmingly, the largest impact is productivity. Almost 88 percent of job losses in manufacturing in recent years can be attributed to productivity growth, and the long-term changes to manufacturing employment are mostly linked to the productivity of American factories.
Robots are only now being introduced to the software of artificial intelligence. They are now being taught to teach themselves. One of the companies that is involved in this is AutoDesk. It already has commercially available robots that teach themselves. This means that the robots are going to learn sophisticated techniques quite rapidly.
We are going to see more production lines where individuals are working with robots on a side-by-side basis. That is because the new software will keep the robots from smashing humans around them. At present, they are blind. They will not be blind for much longer.
I see no reason why American manufacturing is not going to remain highly competitive in world markets. American workers employed by manufacturing will also remain competitive, but there will be far fewer of them, and they will be much more intelligent than the ones who presently work on the standard manufacturing production line. The only people who are going to survive in manufacturing will be people who have skills in the realm of software and technology. We can expect that wages in manufacturing will be rising for these people, but wages will be falling or even ceasing for the typical graduates of an American public high school. As for the non-graduates, I have no idea how they will earn a living. They will not be paid much per hour.
Robots make great copy for financial journalists, but they are only the latest development in a process that goes back for two centuries. The big difference today is artificial intelligence. In the past, machines have been limited in what they could do. As artificial intelligence improves, robots are going to invade turf that has been traditionally controlled by human beings. The only question now is the speed of the invasion.
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