Will robots take our jobs? | CNBC Explains

They can check you in and deliver orange juice to your hotel room, answer your questions about the missing package, make sushi, and pack thousands of boxes to ship. And, perhaps most importantly, they are completely immune to Covid-19. People had a hard time amid the coronavirus pandemic, robots have an advantage.

The Covid-19 pandemic has left millions of Americans unemployed – a disproportionate number of those working in the service industry, where women and people of color make up the largest proportion of the workforce. In October, 11 million people in the U.S. became unemployed, compared with about 6 million who were unemployed during the same time last year..

As humans experience record job losses and economic instability, robots have become a popular commodity. Many tech makers are reporting an increase in demand for their bots during the pandemic, ranging from self-driving cars that can navigate corridors to deliver goods to AI-powered customer service software, to increased use of self-checkouts in supermarkets..

A recent report from the World Economic Forum predicted that by 2025, the next wave of automation, fueled by the pandemic, will result in 85 million job losses worldwide. New jobs will be created, but «businesses, governments and workers must urgently plan to work together to realize a new vision for the global workforce».

During the pandemic, the hospitality industry saw a clear surge in new technology adoption. Hotels allow guests to use check-in kiosks, apps to control TV and light switches in their room, and some use bots to deliver orders to their rooms..

Ron Svidler, The chief information officer of Gettys Group, a hotel design and development consulting firm, said more hotels are experimenting with new technologies during the pandemic. Svidler heads the Hotel of Tomorrow, a consortium of hospitality industry leaders that was reborn in the midst of the pandemic to think about ways to innovate the industry. The group proposed five «big ideas» how the industry needs to change and new technologies, including robots, are a key part of that equation.

«The cost [of automation] goes down, technology gets better, and we see innovation work effectively in other parts of the world that we can bring here.», – Svidler said, citing Alibaba’s FlyZoo hotel, which is staffed almost entirely with technology personnel – from check-in to room service..

While the idea of ​​being served by robots in a hotel may sound odd, Svidler believes the ongoing job loss in the industry will become a reality as hotels introduce new technologies to try to save on labor costs..

It is unclear whether the increased demand for new technologies caused direct job losses during the pandemic, but a discussion paper released by the Federal Reserve Bank of Philadelphia in September showed that «automated» jobs – professions that can be replaced by technology – lost 4.2 more jobs for every 100 than professions that are less at risk of automation. According to the document, the professions considered to be automated include hotel clerks, taxi drivers and retailers..

Experts express widespread concern that automation carried out during a pandemic will forever replace jobs.

«The longer it takes to fully control the virus, the higher the likelihood that labor-saving technologies will become permanent.», – said Lei Ding, senior economic advisor to the Federal Reserve Bank of Philadelphia. – Job loss will become permanent».

Currently, there are only isolated examples of irreversible job losses due to the surge in automation fueled by the pandemic, but the layoffs of hundreds of pay point workers in Pennsylvania are a prime example of how labor-saving technologies can destroy jobs..

In June, the Pennsylvania Highway Commission fired about 500 state toll collectors when it switched to fully electronic toll.

For years, the commission has talked about replacing toll stations with automatic pickers. According to the trade union agreement, workers were required to remain on wages until at least October 2021, and the final layoffs would occur by January 2022..

When the pandemic hit, employees were sent home in March and promised to continue to adhere to the October 2021 date. But in June, the commission dismissed all workers for good, more than a year before the agreed date..

«We understand that the safety of employees is the most important thing, but for them safety means the elimination of their jobs … It was terrible», – said Jock Row, union head Teamsters Local 77.

Rowe cited other toll agencies that have returned employees and tightened security, including the New York and New Jersey Ports Authority..

Robots rob Americans of jobs

The impact of the recession on the growth of automation was predicted by economists. Research shows that automation is not growing all the time, but rather leaps and bounds. Businesses are more likely to automate after economic shocks when they have strong incentives to save on labor.

In a study published in 2016, researchers at the University of Rochester looked at 87 million job postings online before and after the recession. They found that employers in the cities hit hardest by the recession were replacing workers with labor-saving technologies and more skilled workers. A report published by the Century Foundation states that «the intensity of the introduction of robots» increased in 2009 immediately after the recession, especially in manufacturing.

While increased levels of automation can be beneficial for educated workers and help stimulate the economy, research has also shown that new technologies tend to leave low-wage workers behind..

«Automation has become a major driver of rising inequality», – said Daron Acemoglu, economist at the Massachusetts Institute of Technology. Acemoglu is co-author of a study published in May that showed that automation creates «wealth gap», which benefits highly skilled workers at the expense of less skilled workers.

Low-paid workers are not only more susceptible to job loss and lower wages due to automation, but they are also the most likely to lose jobs due to lockdowns. Workers with higher wages were more likely to be able to work from home during the pandemic, while workers with lower wages – a disproportionate number of blacks or Hispanics – were more susceptible to layoffs due to quarantine orders..

An important caveat that many robotics scientists point out is that artificial intelligence technology is not yet smart enough to cause massive layoffs due to robots. Creating a new artificial intelligence technology can take a lot of money, time and resources, which many companies do not have during the pandemic..

«You definitely shouldn’t worry about losing your job to an AI robot right now. If you are about to lose your job due to automation, it will be … some proven, well-known automation that is more than 10-15 years old.», – said Matt Bean, Associate Professor, Department of Technology Management, University of Santa Barbara.

According to Acemoglu, AI has «great potential for increasing the productivity of people» without replacing people if society adopts a people-centered approach to technological progress. But without the political will to provide care for those who have actually lost their jobs, for example by teaching them new job skills, the impact of automation can be devastating, and the pandemic that has already hit these workers hard could lead to massive unemployment..

«I’m not saying automation is terrible… I want to say that it would be awful if we put all our eggs in the automation basket, ”Acemoglu said. “We’ve pretty much done that already for the last 30 years. [Pandemic] will only make it worse».

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