Are Robots Hurting Job Growth?

This is an ABSOLUTE MUST VIEW 60 Minutes segment. The subject is and will impact your future livelihood and that of your children and grandchildren! The program fails to point to the obvious solution, which is to connect EVERY American with ownership in the corporate productive capital assets represented by “robotics and digital computerized operations” and benefit from the income derived as Americans become the future “customers with money” to purchase the products and services that the “robotics and digital computerized operations” produce.

The master plan for this paradigm shift in the structure of the American economy can be accomplished with the adoption and implementation of the the Capital Homestead Act at http://www.cesj.org/homestead/index.htm andhttp://www.cesj.org/homestead/summary-cha.htm

Please see my article “Democratic Capitalism And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.org/11/economic-justice/ or follow me on Facebook at http://www.facebook.com/pages/For-Economic-Justice/347893098576250 and http://www.facebook.com/editorgary

Also please see my article “The Absent Conversation: Who Should Own America?” published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html

Also see the following letter:

Steve Kroft
60 Minutes
524 West 57th St.
New York, NY 10019

Greetings, Mr. Kroft,

Thank you for the “60 Minutes” segment (January 13, 2013), “Are Robots Hurting Job Growth?” This should help to enlighten many in the public (including politicians and economists) who may not be aware of how much and how swiftly technology is replacing so many job functions. In the company I work for, I’ve seen automation through hardware and software reduce our workforce from 530 to 70 over the past 20 years with no reduction in output capacity. Any increase in capacity for us will be through additional automation.

There is a story that the late UAW President Walter Reuther was touring a highly automated Ford Assembly Plant when a company executive said, “Walter, you’re going to have a hard time collecting union dues from all these machines.” Reuther shot back, “not as hard a time as you’re going to have selling them cars.”

Your segment highlighted a dilemma that America faces as we try to grow our way out of a recession:  Technology creates greater efficiency in production but threatens the livelihoods of those who rely solely on jobs for their income, which they need to purchase the goods and services being produced. Without customers, businesses disappear.

Back in 1974, “60 Minutes” had an interview between Mike Wallace and lawyer-economist Louis Kelso about technological unemployment. In the show, Kelso proposed that the solution is for workers to OWN the robots (or more specifically, shares of companies that use the robots). As owners, people would then derive their income from dividends paid by the companies that have replaced human workers with technology.

Kelso, best known as the inventor of the Employee Stock Ownership Plan (ESOP), demonstrated that workers without savings or assets could become capital owners without reducing their take-home pay or the need for government redistribution through the tax system. By financing corporate growth with the future profits generated by the capital itself (i.e., the robots), non-owners could become owners, without taking anything away from current owners.

As Kelso put it, “unemployment is not so bad if you can afford it.” Kelso has since passed away, but his former protege and colleague Dr. Norman G. Kurland has refined Kelso’s vision into a plan called the “Capital Homestead Act”. Here’s a link to a quick summary: http://www.cesj.org/homestead/index.htm

If you are interested in learning more about the history of the “ownership revolution” and current initiatives to broaden capital ownership opportunities to every citizen, I am sure Dr. Kurland would welcome the opportunity to discuss these ideas with you.
He can be reached directly at thirdway@cesj.org or by phone at 703-243-5155.

Best regards,

Rowland Brohawn
Falls Church, VA

http://www.cbsnews.com/video/watch/?id=50138922n

http://www.cbsnews.com/8301-18560_162-57563618/are-robots-hurting-job-growth/

The following script is from “March of the Machines” which aired on Jan. 13, 2013. Steve Kroft is the correspondent. Harry Radliffe and Maria Gavrilovic, producers.

One of the hallmarks of the 21st century is that we are all having more and more interactions with machines and fewer with human beings. If you’ve lost your white collar job to downsizing, or to a worker in India or China you’re most likely a victim of what economists have called technological unemployment. There is a lot of it going around with more to come.

At the vanguard of this new wave of automation is the field of robotics. Everyone has a different idea of what a robot is and what they look like but the broad universal definition is a machine that can perform the job of a human. They can be mobile or stationary, hardware or software, and they are marching out of the realm of science fiction and into the mainstream.

The age of robots has been anticipated since the beginning of the last century. Fritz Lang fantasized about it in his 1927 film “Metropolis.” In the 1940s and 50s, robots were often portrayed as household help.

And by the time “Star Wars” trilogy arrived, robots with their computerized brains and nerve systems had been fully integrated into our imagination. Now they’re finally here, but instead of serving us, we found that they are competing for our jobs. And according to MIT professors, Erik Brynjolfsson and Andrew McAfee, one of the reasons for the jobless recovery.

Andrew McAfee: Our economy is bigger than it was before the start of the Great Recession. Corporate profits are back. Business investment in hardware and software is back higher than it’s ever been. What’s not back is the jobs.

Steve Kroft: And you think technology and increased automation is a factor in that?

Erik Brynjolfsson: Absolutely.

The percentage of Americans with jobs is at a 20-year low. Just a few years ago if you traveled by air you would have interacted with a human ticket agent. Today, those jobs are being replaced by robotic kiosks. Bank tellers have given way to ATMs, sales clerks are surrendering to e-commerce and switchboard operators and secretaries to voice recognition technology.

Erik Brynjolfsson: There are lots of examples of routine, middle-skilled jobs that involve relatively structured tasks and those are the jobs that are being eliminated the fastest. Those kinds of jobs are easier for our friends in the artificial intelligence community to design robots to handle them. They could be software robots, they could be physical robots.

Steve Kroft: What is there out there that people would be surprised to learn about? In the robotics area, let’s say.

Andrew McAfee: There are heavily automated warehouses where there are either very few or no people around. That absolutely took me by surprise.

It’s on display at this huge distribution center in Devens, Mass., where roughly 100 employees work alongside 69 robots that do all the heavy lifting and navigate a warehouse maze the size of two football fields — moving 10,000 pieces of merchandise a day from storage shelf to shipping point faster and more efficiently than human workers ever could.

Bruce Welty: We think its part of the new American economy.

Bruce Welty is CEO of Quiet Logistics, which fills orders and ships merchandise for retailers in the apparel industry. This entire operation was designed around the small orange robots made by a company outside Boston called Kiva. And can now be found in warehouses all over the country.

Steve Kroft: Now this is the order that she is filling, right, on this screen.

Bruce Welty: Yes, in a typical warehouse, she’d have to walk from location to location with a number of totes. And that’s the innovation here is that the product comes to her.

Steve Kroft: And all of this is preprogrammed? Nobody has to sit there and tell these robots where to go?

Bruce Welty: No, no, it’s all done with algorithms. A lot of mathematics, a lot of science that went into this.

Customer orders are transmitted from a computer to wifi antennas that direct the robots to the merchandise, guiding them across an electronic checkerboard with bar codes embedded in the floor panels. Once the robot arrives at its destination, it picks up an entire shelf of merchandise and delivers it to the packing station. It then speeds off to its next assignment.

Bruce Welty: They know if they need to get from point A to point B and they are not carrying anything , they can go underneath the grid. We call that tunneling. So they are very smart.

Steve Kroft: You’d think they’d run into each other.

Bruce Welty: Yeah, you’d think that but it never happens.

Steve Kroft: If you had to replace the robots with people, how many people would you have to hire?

Bruce Welty: Probably one and a half people for every robot.

Steve Kroft: So it saves you a lot of money?

Bruce Welty: Yes.

And it’s not just going on in warehouses. El Camino Hospital in California’s Silicon Valley has a fleet of robots called tugs that ferry meals to patients, medicines to doctors and nurses, blood samples to the lab and dirty linen to the laundry.

A hospital spokesman told us the tugs are supposed to supplement nurses and hospital staff – not replace them. But he also believes that robots and humans working together is the beginning of a new era.

Robots are now wielding scalpels for surgeons, assisting in the most delicate operations — allowing them to see and snip their way through prostate surgeries with minimal damage. And they have begun filling prescriptions in hospital dispensaries and local pharmacies.

Economic evolution has been going on for centuries and society has always successfully adapted to technological change creating more jobs in the process. But Erik Brynjolfsson and Andrew McAfee of MIT think this time may be different.

Erik Brynjolfsson: Technology is always creating jobs. It’s always destroying jobs. But right now the pace is accelerating. It’s faster we think than ever before in history. So as a consequence, we are not creating jobs at the same pace that we need to.

Andrew McAfee: And we ain’t seen nothing yet.

The changes are coming so quickly it’s been difficult for workers to retrain themselves and for entrepreneurs to figure out where the next opportunities may be. The catalyst is something called computer learning or artificial intelligence — the ability to feed massive amounts of data into supercomputers and program them to teach themselves and improve their performance.

It’s how Apple was able to create Siri the iPhone robot and Google its self-driving car.

Erik Brynjolfsson: We’ve been amazed at how rapidly this has been happening.

[TV clip from “Jeopardy:” This is Jeopardy!]

Erik Brynjolfsson: IBM’s deep QA system that plays “Jeopardy,” we had a contest here that played against our best MIT students, the best Harvard students we could put it up against. And not surprisingly, Watson won. And it’s being used in real practical applications now on Wall Street and in call centers. Siri — millions of people are using that every day.

Andrew McAfee: The fact that computers can now understand and respond to human speech, the fact that they can actually generate prose of decent quality, they can drive cars, they can win at Jeopardy. We’re seeing technology demonstrate skills that it’s never, ever done before.

And it is putting new categories of jobs in the sites of automation — the 60 percent of the workforce that makes its living gathering and analyzing information. This piece of software called e-discovery is now used by law firms in the discovery portion of legal proceedings, a job that used to require hundreds of people sifting through boxes and boxes of documents.

We now have robots gathering intelligence and fighting wars, and robot computers trading stocks on Wall Street.

It’s all part of a massive high tech industry that’s contributed enormous productivity and wealth to the American economy but surprisingly little in the way of employment.

Andrew McAfee: We absolutely are creating new jobs, new companies, and entirely new industries these days. When Erik and I go out to Silicon Valley and look around, the scale and the pace of creation is astonishing. What these companies are not doing, though, is hiring a ton of people to help them with their work.

Steve Kroft: Because they don’t have them? Because they can’t find them? Because they don’t need them?

Andrew McAfee: Because they can’t find everyone they need, but they don’t need that many people to work in these incredibly large and influential companies. To make that concrete, Apple, Amazon, Facebook and Google are now all public companies. Combined, they have something close to $1 trillion in market capitalization. Together, the four of them employ fewer than 150,000 people, and that’s less than the number of new entrants into the American workforce every month.

And it’s roughly half the number of people that work for General Electric.

Ironically, one of the few bright spots is a modest rise in U.S. manufacturing: an early casualty of automation that is making a comeback because it. This Tesla factory in California turns out battery-powered cars, using state-of-the-art robots that can change tools and perform a multitude of different tasks negating some of the advantages of moving jobs offshore.

Annual investment by U.S. manufacturers in new technology has increased almost 30 percent since the recession ended, and research institutions and robotics companies, funded by venture capital, are constantly searching for innovations like the Roomba vacuum cleaner.

[Rodney Brooks: Traditional robots inside factories…]

That was the brain child of Rodney Brooks, a pioneer who ran the artificial intelligence lab at MIT, before launching iRobot one of the most successful robotics companies in the U.S. this is his latest progeny, a friendly, affordable chap named Baxter.

Rodney Brooks: It’s meant to be able to go in a factory where they don’t have robots at the moment. And ordinary workers can train it to do simple tasks.

Steve Kroft: Uh-huh. Such as?

Rodney Brooks: Well, a simple one is just– for instance, picking stuff up off a conveyor belt. So it’s going to go down and find the object and grab it and bring it over and put it to another spot.

Baxter costs $22,000, and can be trained to do a new task by a coworker in a matter of minutes. It can also be upgraded like an iPad with new software as new applications are developed.

[Rodney Brooks: And when you’re training it…]

Brooks and investors in his new startup, Rethink Robotics, see a potential market worth tens of billions of dollars, and believe that Baxter can help small U.S. manufacturers level the playing field against low cost foreign competitors.

Rodney Brooks: If you’re using robots to compete with a simple task that a low-paid worker does in a foreign country you can bring it back here and do that task here.

Steve Kroft: Baxter costs 22 grand?

Rodney Brooks: Yep.

Steve Kroft: How long does he last?

Rodney Brooks: It lasts three years.

Steve Kroft: Three years?

Rodney Brooks: So you can think that as 6,500 hours.

Steve Kroft: I think it works out to about $3.40 an hour?

Rodney Brooks: About that yeah.

Steve Kroft: $3.40, that’s probably the wages of the Chinese worker, right?

Rodney Brooks: It’s just about right there now.

Steve Kroft: So here you could buy one of these robots and it would be like getting a Chinese worker?

Rodney Brooks: In a manner of speaking.

That strategy has already had some success at Adept Technology, the largest manufacturer of industrial robots in the country with a wide and varied product line. John Dulchinos is the CEO.

John Dulchinos: So this is our flagship product. This is our Cobra robot. This is the class of robot that was used to automate Philips electric shavers.

The robots at the Dutch company’s factory in the Netherlands proved to be so efficient and economical, that Philips decided to move its main shaver assembly line out of China and back to Holland.

Erik Brynjolfsson: I think that those workers in China, in India, are more in the bullseye of this automation tidal wave that we are talking about than the American workers.

But even if offshore manufacturing returns to the U.S., most of the jobs will go to robots.

Andrew McAfee: When I see what computers and robots can do right now, I project that forward for two, three more generations, I think we’re going to find ourselves in a world where the work as we currently think about it is largely done by machines.

Steve Kroft: And what are the people going to do?

Andrew McAfee: That’s the $64,000 question.

Andrew McAfee: Science fiction is actually my best guide because I think we are in that time frame going to be in a very weird, very different place.

It brings to mind Stanley Kubrick’s “2001: A Space Odyssey,” and the rebellious computer robot “HAL”. Technologically speaking, we are just about there.

[Dave Bowman: Open the pod bay doors, HAL.

HAL: I’m sorry, Dave, this mission is too important for me to allow you to jeopardize it.]

Everyone agrees that it’s impossible now to short circuit technology. It has a life of its own and the world is all in for better or for worse.

[HAL: Stop, Dave.]

We wanted to leave you on this positive note.

Erik Brynjolfsson: One thing that Andy and I agree on is that we’re not super worried about robots becoming self aware, and challenging our authority. That part of science fiction, I think, is not very likely to happen.

Comment by DaveHamill January 14, 2013 2:23 AM ESTI agree with Gary Reber. Mike Wallace interviewed Mortimer Adler in 1958, and very few listened to the wisdom within that piece. Nor did we listen to Dr. King or Reagan on the issue of ownership of production or “peoples capitalism”. Now we still have the same economic system of 1958, or ’38, while manufacturing has evolved greatly, due to the capitalist law of efficiency. So what do we do now? Socialize? Eliminate money and adapt an RBE? That would require getting rid of the Bill of Rights. So come up with a new plan and form a new movement? That would take years to get off the ground. No, the only existing organized movement with a plan that transforms the economic system to end plutocratic monopoly capitalism and end fiat boom-and-bust currency.. while preserving individual liberties is the Coalition for Capital Homesteading. After you read Gary’s educational links go to our activism site at capitalhomestead.org and join us. OWN OR BE OWNED! Empower all citizens with ownership of new technologies! Attend our annual rally in DC April 26, 2013!

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