Wednesday, October 31, 2018

The Robots Are Coming And It Might Not Be A Case of Structural Unemployment

In my macroeconomics class, we talk about the types of unemployment. Here is one of them:

Structural-unemployment caused by a mismatch between the skills of job seekers and the requirements of available jobs. One example of this is when you are replaced by a machine.

See Short of Workers, Fast-Food Restaurants Turn to Robots: Flippy the burger chef doesn’t complain about the drudgery of grill work and never leaves the kitchen by Julie Jargon and Eric Morath of The WSJ. Also Manufacturers adopt robots that help human workers, not replace them. For now. by Alexia Elejalde-Ruiz of the Chicago Tribune. It discusses “cobots,” short for collaborative robots.

The WSJ article suggests that businesses are turning to robots due to labor shortages, not necessarily to replace workers. One place has "Flippy, a robot that turns the burgers and cleans the hot, greasy grill." The link has a video. Excerpts:

"The hospitality industry had 844,000 unfilled positions in April, a record high, according to the Labor Department. That accounts for about one out of every eight jobs available in America. Employment in food service and drinking places has increased by 1.6 million since May 2013 to 11.9 million in May 2018.

If businesses were just using machines to replace workers, you would see high unemployment in the industry, said Donald Grimes, a labor economist at the University of Michigan. “But you’re not seeing that at all.”

The 6% unemployment rate for restaurant workers is the lowest on record, according to the Labor Department. It tops the 3.8% overall unemployment rate, yet is extremely low for an industry with notoriously brisk turnover—a full percentage point below where it stood in 2000, the last time overall unemployment was as low as it is today.

The rise of machines in theory should lead restaurants to employ fewer people per establishment. So far that’s not happening, either. Nationwide, employment is up at individual quick-service restaurants, to 18.4 workers per establishment last year, from 17.4 before the recession began in late 2007.

Many restaurants are trying to do more, including staying open around the clock or delivering food. Some chains also need more employees to handle the increased demand that comes from automating tasks such as ordering."

"some Dunkin’ shops use digital refractometers to determine if coffee meets specifications.

Automation improves consistency, shaves time off tasks, and may help ease the incessant turnover that crimps productivity and staffing across the industry."

"A 2013 study by University of Oxford economists Carl Frey and Michael Osborne found that food service occupations, including cooks, hosts and servers, ranked in the top 20% of most automatable jobs among 700 occupations examined. Additional research from The Organization of Economic Co-operation and Development said food preparation faced the highest probability of automation among 88 industries."

"the labor pool is shrinking and wages are picking up, in part because of the shortages and also due to minimum-wage increases in many states."

"Automats, the waiterless establishments of the early 20th century that combined vending machines and a cafeteria, could be considered the first fast-food restaurants, said Magne Mogstad, a labor economist at the University of Chicago. They were shoved aside by fast-food restaurants that depended on humans to function.

“Automation,” he said, “may very well create demand for service with a personal touch.”

Panera Bread has created approximately 25,000 new jobs over the past two years including delivery drivers and new restaurant workers to handle the extra volume coming from digital ordering."

"McDonald’s Corp. is offering table service now too, thanks to self-order kiosks."

Related posts:

Robot Journalists-A Case Of Structural Unemployment?

Structural Unemployment In The News-Computers Can Now Tell Jokes 

WHAT do you get when you cross a fragrance with an actor?

Answer: a smell Gibson.

Robot jockeys in camel races

Are Computer Programs Replacing Journalists?

Automation Can Actually Create More Jobs


Unknown said...

this is quite interesting that employment is up in the 21st century in the fast food industry. It tells me that people aren't ready to accept too much automation when it comes to getting food. I would think that the kiosk model that McDonald's has would lead the way into automation of workers out of restaurants. Well not the complete automation of people out of restaurants as someone has to serve the right food.

Cyril Morong said...

That might be the big question, how much automation people are willing to accept

Anonymous said...

If I have a choice I will use a person. I will pay a little more for a human.