Friday, April 17, 2009

The good news: No more outsourcing factory jobs!

The bad news: No more factory jobs.

FTA: Scottish scientists yesterday claimed we are only five years away from a generation of robots capable of putting together wardrobes, beds and chairs.

The article's headline is about Robot Butlers but the obvious downside is that any robot capable of being a butler is (likely as not) capable of being virtually anything else. Add in a pinch of this and a dash of that, maybe a smidge of this and boom, this is what you get....

This is serious. We all like the fantasy of our having robot butlers but we fail to realize the reality of how this technology would impact our world. Robot butlers, once they hit the appropriate price point, will simply gut the jobs of the unskilled. By dramatically increasing the labor supply labor wages will free fall... essentially, if a robot can do a job 24 hrs a day for X dollars a day(maintenance, fuel, depreciation of value), and a human can do the same job 16 hours a day, but not quite as well, than they will have to take approximately (or less than) x/2 dollars a day. (Cost of a robot/years until replacement is needed)+(robots annual maintenance)+(robot's fuel expenditures)= (total annual salary of all workers needed to do the same job) + (amount needed to compensate for losses due to human inefficiency).

There are circumstances that could mitigate the problem: a strong public backlash, (bad) deflation due to lowered buying power of the large number of unemployed, (good) deflation due to the cheaper manufacturing costs, government intervention and safety nets.

Now, all that being said, I totally want one. The world is going to go through some extremely interesting changes. They're already happening. It doesn't take huge leaps in our technological capabilities to see amazing changes- just look at how the internet is still changing our business world.

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