Friday, October 02, 2020

Is Covid causing some structural unemployment?

See Companies Step Up Distribution Automation Under Pandemic Strains: Robots are helping speed the flow of goods while workers maintain social distance in warehousing and fulfillment operations by Jennifer Smith of The WSJ. 

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.

Excerpts from the article:

"A handful of warehouse robots helped American Eagle Outfitters Inc. cope with a flood of online orders during coronavirus lockdowns as consumers loaded digital shopping carts with hoodies, leggings and loungewear.

Now the company is stepping up its use of automation. The company is installing 26 more piece-picking robots at its main U.S. distribution centers, making it the latest company to deepen its logistics technology investments as the coronavirus pandemic upends sales channels and supply chains.

The kiosk-size units from robotics provider Kindred Systems Inc. use mechanical arms, computer vision and artificial intelligence to sort through piles of apparel. They provide steady labor to help workers organize orders and reduce crowding on the warehouse floor, where the company said one human can manage multiple robots instead of standing next to other associates."

One executive said "You cannot actually bring in 1,000 to 2,000 untrained people into the distribution facility and maintain safe working conditions."

"More than half of warehouse operators responding to a recent survey by Honeywell Intelligrated, Honeywell International Inc.’s warehouse automation business, said they were more willing to invest in automation as a result of the pandemic."

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