Scrambling to Find Workers and Robots Stealing Jobs
Mar 12, 2018
As the US has become increasingly technology-centric, there has been a growing belief that many of the current professions will become automated, significantly reducing the amount of employment available. This caused many of the people entering the workforce to become fearful about future job prospects. While this certainly had merit during the recession in 2007-2009, and it is clear that many jobs will eventually be replaced through automation, is it now justifiable for employers to be concerned about their position going forward? This is the theory posited in two Barron’s articles titled “The Great Labor Crunch” and “Robots Won’t Solve the Worker Shortage”. Unemployment rates have reached a 17-year low of 4.1% as the labor force available to companies continues to shrink. This development, coupled with the fact that a member of the Baby Boomer generation retires every 9 seconds, results in job opportunities opening faster than they can be filled. While robotic technology may be able to close a portion of the gap between supply and demand, this help many not come quickly enough for many companies.
When unemployment spiked during the 2007-2009 period, many US companies benefited as the surplus of qualified talent available put a ceiling on wage growth. As the US economy recovered and companies began to expand once more, they required more human capital to grow. As a result, the slack in labor dried up rather quickly. Technology has been increasingly implemented by companies to lessen the need for increasingly more human capital. While technology has been able to eliminate various low-level jobs over the last 10-20 years, it is becoming clear that the rate of technological substitution has declined significantly. More complex jobs require more complex robots, utilizing more complex software, and requiring more sophisticated technicians to keep them functioning. This process is too slow to keep stride with labor demands, and it is estimated that between 2017 and 2027, the US will have a labor shortage of 8.2 million workers. What does this all mean for workers?
Many companies, recognizing the shortage of employment that is on the horizon, have begun to take steps to ensure that they are able to attract the necessary workers for their organizations to expand. Companies such as Target have raised their minimum wage by $1 to $12, despite already raising this figure by the same amount last fall. In other areas, such as carpentry where labor shortages are particularly apparent, wages have risen by as much as 57% over the last 3 years. Companies have continued to invest substantially into research and development to meet their growing labor requirements. If these pay raises are any indication, however, it would not seem they are confident in their ability to do so.
To read the articles cited click here (Labor Crunch) and click here (Robots).