You Want Fries With That?

"You want fries with that?" We all have heard that as a putdown of someone who just screwed up. Tom Friedman adopts the persona of the Right Wingnut, without the Nut. I never bought his act, and today he steps in it, again. Such utter nonsense.

Let's start with the basic premise: today's upheaval in the middle class is just like the eviction of farmers to factories in the 19th and 20th centuries, and that this is a Good Thing. What's going on today in the BRICs, China particularly, is much the same as back then; with the same result. Rural poverty is exchanged for urban poverty. As one Indian of my acquaintance put it, "you can earn a dollar a day in the fields in cow dung, or a dollar a day in an air conditioned office. Same wage, different demands; you need to learn office skills, but same wage. Take your pick." The BRICs have been "economic miracles" through indentured servitude, with a few billionaires and billions of hands holding up capitalists.

Friedman's notion only works if the demand for labour in the target sector matches the evicted labour in the source sector(s). In 19th and early 20th century USofA, with modest capital/labour ratios, that mostly worked out. Recall Henry Ford, who raised wages in part so that his workers could afford his cars. Smart man that. He also had this to say: "A business that makes nothing but money is a poor business."

Friedman tells a tale of a Boston area robot outfit, Rethink Robotics, and waxes rhapsodic on robots empowering people to do more. And create jobs.

...its cheap, easy-to-use, safe robot will be to industrial robots what the personal computer was to the mainframe computer, or the iPhone was to the traditional phone. That is, it will bring robots to the small business and even home and enable people to write apps for them the way they do with PCs and iPhones...

Of course, folks don't go buy a PC or iPhone and *PROGRAM* the damn things!!! Well, a few anti-social nerds who then create a Facebook or something. But not more than a handful. Moreover, studies were done (and continue) on the effect of PCs in the office, and concluded that by and large PCs added to overhead, since they tended to engage the users in form and less on content. Graphical machines, starting with the Mac and thence to the Windows PC, were the worst offenders. Some companies are finally getting wise, and banning the Power Point Presentation. And not a minute too soon.

"Just as the PC did not replace workers but empowered them to do many new things," argues Brooks, the same will happen with the Rethink robot. "Companies will become even more competitive, and we will be able to keep more jobs here. ... The minute you say 'robots' people say: 'It's going to take away jobs. But that is not true. It doesn't take away jobs. It will change how you do them," the way the PC did not get rid of secretaries but changed what they did.

Neither of these guys lives in the real world. What's been the net job effect of industrial robots? Net? Less than zero. Fact is, as the PC took over in the office, secretaries were shown the door. Workers were told to "get keyboard skills, or else", and did their own documents. Who amongst you, regular readers, has a secretary or even knows one? Damn few, I'll wager.

So, what is the labour distribution in the USofA these days? In other words, is there unmet demand for robot makers and programmers sufficient to soak up all those displaced factory and office workers? Not so you'd notice. Here's a table of data from the BLS:

2010 National Employment Matrix title and code Employment Change, 2010-20 Median annual
2010 2020 Number Percent wage, May 2010
00-0000 Total, All Occupations 143,068.2 163,537.1 20,468.9 14.3 $33,840
31-0000 Healthcare Support Occupations 4,190.0 5,633.7 1,443.7 34.5 24,760
39-0000 Personal Care and Service Occupations 4,994.7 6,331.4 1,336.6 26.8 20,640
29-0000 Healthcare Practitioners and Technical Occupations 7,799.3 9,819.0 2,019.7 25.9 58,490
21-0000 Community and Social Service Occupations 2,402.7 2,985.0 582.3 24.2 39,280
47-0000 Construction and Extraction Occupations 6,328.0 7,735.2 1,407.2 22.2 39,080
15-0000 Computer and Mathematical Occupations 3,542.8 4,321.1 778.3 22.0 73,720
13-0000 Business and Financial Operations Occupations 6,789.2 7,961.7 1,172.5 17.3 60,670
19-0000 Life, Physical, and Social Science Occupations 1,228.8 1,419.6 190.8 15.5 58,530
25-0000 Education, Training, and Library Occupations 9,193.6 10,597.3 1,403.7 15.3 45,690
53-0000 Transportation and Material Moving Occupations 9,004.8 10,333.4 1,328.7 14.8 28,400
49-0000 Installation, Maintenance, and Repair Occupations 5,428.6 6,228.7 800.2 14.7 40,120
27-0000 Arts, Design, Entertainment, Sports, and Media Occupations 2,708.5 3,051.0 342.5 12.6 42,870
41-0000 Sales and Related Occupations 14,915.6 16,784.7 1,869.1 12.5 24,370
37-0000 Building and Grounds Cleaning and Maintenance Occupations 5,498.5 6,162.5 664.0 12.1 22,490
33-0000 Protective Service Occupations 3,302.5 3,667.0 364.5 11.0 36,660
23-0000 Legal Occupations 1,211.9 1,342.9 131.0 10.8 74,580
17-0000 Architecture and Engineering Occupations 2,433.4 2,686.2 252.8 10.4 70,610
43-0000 Office and Administrative Support Occupations 22,602.5 24,938.2 2,335.7 10.3 30,710
35-0000 Food Preparation and Serving Related Occupations 11,150.3 12,242.8 1,092.5 9.8 18,770
11-0000 Management Occupations 8,776.1 9,391.9 615.8 7.0 91,440
51-0000 Production Occupations 8,594.4 8,951.2 356.8 4.2 30,330
45-0000 Farming, Fishing, and Forestry Occupations 972.1 952.6 -19.4 -2.0 19,630

BLS expects the 43- series to burgeon. But with these robots taking over, of course it won't. The 51- series is manufacturing, and shows little growth, and will have even less with robots. The labour hours per automobile, thanks to robotics, is a fraction of what it was in 1960. With robotics displacing labour across all industries, asking about your fries desire too, the issue is distribution of productivity gains. As it is, capitalists get nearly all of it. Historically, they share it with labour only where unions pressure them to do so. Otherwise, take a hike.

The telling datum, not yet found, is the exact replacement ratio of robotics for humans in even one manufacturing instance. Automobiles would be the prime instance, since the auto assembly line was among (if not the first) the early adopters. Clearly, capitalists wouldn't adopt robotics if it ended up raising the unit cost of their product. Capitalists can be stupid, but not over the last 50 years. If robotics were a cost sink, they'd have drop them like a hot coal. They haven't. Where they are stupid is in ignoring Ford's understanding that you can't grow your business organically (i.e., not just buying up your competition) if there isn't money in the hands of folks demanding your product. What goes around comes around. Turn off the merry-go-round...

Oh, and by the bye. It takes substantially more brains to run a farm than to move parts on an assembly line. The shibboleth that moving farmers to factories raised skill levels really should have been staked long ago.