Never pay attention to robots: automation will result in lower prices and more leisure


In the ongoing dialogue around automation, an anomaly persists: everyone fears that jobs will disappear, but nobody wants to recognize the benefits for consumers.

Critics (especially in the United States) are more afraid of temporary setbacks than of excitement for economic liberation. The story is different abroad, a New Zealand company allowing members of his team to work four days instead of five. No, they did not work 10 hours a day. And no, they did not pay less. The results, as reported in Fast Company, included a dramatic increase in work-life balance and a slight increase in productivity, even with a 20% reduction in work time. It's the world that automation makes possible.

Meanwhile, the US economy has become hyperpoliticized. The market standard for "full-time jobs" is 40 hours per week. All employers who offer their workers less than 40 hours end up with unexpected consequences in other areas of the business. For example, policies in the Affordable Care Act stipulate that employers must provide health insurance for those working at least 35 hours a week. Why would anyone accept a job less hours if it meant that he could lose his health insurance? This is only one example, but the US market is littered with similar problems.

No matter how many obstacles you have to overcome, the United States can not stop the wave of automation indefinitely. The Asian Development Bank recently indicated that the economic benefits of automation would outweigh any potential disruption of the labor market, citing several examples in Asia.

Automation will result in increased productivity, which will result in better wages and cheaper goods. In China, factory robots have moved workers from repetitive tasks to jobs of greater value. If the US labor market were free from regulatory difficulties, workers would benefit from greater flexibility in terms of time and place. Automation allows workers and employers to create customized plans that maximize value and innovation, but this can only happen if regulators withdraw.

Unfortunately, the US labor market is anything but unregulated. The processes that should proceed smoothly depending on the progress are spasmodic and do not follow each other in bursts only when politicians deem it appropriate. The United States is facing the revolution instead of taking advantage of the evolution and the big changes are more threatening than the gradual progress of automation.

These over-regulated markets give older technologies a "sticky" ability. Although new tools could have replaced them, Americans still use manual trucks. Instead of gradually integrating automation elements over time, Americans are facing a sudden shift from human engines to total automation – and this is scary.

Automation allows people to spend their time doing things that they like, which usually means that they do not work. The economic point of view of this process is to free labor from manual labor and to devote energy to creative and highly productive tasks. In this way, automation does not remove people but optimizes their more advanced abilities of adaptation and learning.

Better living thanks to automation

Today's manufacturing plants should (and often do) let the machines handle heavy tasks. Fewer people work on the ground, but more people create, supervise, guide and maintain machines. This new economy allows employers to increase the wages of their skilled workers, lower the cost of each item, and increase competition between companies. The result of this process is a legion of highly paid human beings in a market where products are cheaper.

In an automated sector, workers who were previously limited to manual labor are released to help entrepreneurs create new innovations or even start their own businesses. When monotonous jobs disappear, new jobs emerge when budding companies have access to workers who can promote their vision. These small businesses create jobs because they have people to fill the positions and not the reverse.

Automation moves resources away from unproductive gaps and places them in more useful areas. People earn more money per hour of work because the value of their production is much greater and the prices of goods fall because production costs are much lower. The automation discussion is often about whether people will keep their jobs full-time, but we should celebrate the 40-hour work week.

If people receive higher wages and access to cheaper products, they should not want to work 40 hours a week – and they certainly will not need it. Automation allows people to live a more fulfilling life, allowing them to engage in hobbies and illicit interests in a world where they had to trade more time on awakening for money .

America and other countries obsessed with this obsolete view of "full-time work" must drop the issue. The concert economy is here to stay. The political constructs that ensure the relevance of the 40-hour workweek are remnants of the factory work of the Industrial Revolution and have nothing to do with the economy of the new era of the industrialists. information.

Automation saves the human race from manual, boring and dangerous work. Mining, for example, has never been as safe as it is today, and will become so as the machines do more work. If regulation restricted automation related to mining, countless workers would again be forced to risk their lives underground in unsafe conditions. This is a useless exercise – and automation should be obsolete in all sectors, from the mining sector to technology development to the health sector.

The future of the automated world boils down to a fundamental economic fact: capital increases labor productivity and a more productive (and better paid) workforce benefits from more leisure time and better products. market. The transition to an automated reality will not happen without growing pains, but it is certainly not a valid reason to avoid progress. Automation is unstoppable and it would be wise for us to control the wave rather than fighting the tide.

By Bylund

By Bylund

Assistant Professor of Entrepreneurship and Archives – Professor Johnston

Per Bylund is an Assistant Professor of Entrepreneurship and Johnston-Johnston Professor of Free Business at the School of Entrepreneurship at Oklahoma State University. His areas of research are entrepreneurship, management and economic organization.