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Saturday, November 30, 2013

Automation Targeting Even Low-Wage Jobs

This past summer, David H. Autor,  professor of economics at the Massachusetts Institute of Technology and David Dorn, assistant professor of economics at the Center for Monetary and Financial Studies in Madrid, wrote an article in the New York Times, "How Technology Wrecks the Middle Class". Autor has been a primary figure in promoting the thesis that technological changes in the economy are responsible for job market "polarization"-- as employment in routine jobs has ebbed, employment has risen both in high-wage managerial, professional and technical occupations and in low-wage, in-person service occupations:

So computerization is not reducing the quantity of jobs, but rather degrading the quality of jobs for a significant subset of workers. Demand for highly educated workers who excel in abstract tasks is robust, but the middle of the labor market, where the routine task-intensive jobs lie, is sagging. Workers without college education therefore concentrate in manual task-intensive jobs — like food services, cleaning and security — which are numerous but offer low wages, precarious job security and few prospects for upward mobility. This bifurcation of job opportunities has contributed to the historic rise in income inequality.

But in a report in the 11/29/13 NYT, "Coming Soon, a Night Watchman With Wheels", science writer John Markoff, writes:

A company in California has developed a mobile robot, known as the K5Autonomous Data Machine, as a safety and security tool for corporations, as well as for schools and neighborhoods...The night watchman of the future is 5 feet tall, weighs 300 pounds and looks a lot like R2-D2 – without the whimsy. And will work for $6.25 an hour.
And the addition of such a machine to the labor market could force David Autor, Massachusetts Institute of Technology economist, to rethink his theory about how technology wrecks the middle class.
The minimum wage in the United States is $7.25, and $8 in California. Coming in substantially under those costs, Knightscope’s robot watchman service raises questions about whether artificial intelligence and robotics technologies are beginning to assault both the top and the bottom of the work force as well.
 Over all, there are about 1.3 million private security guards in the United States, and they are low paid for the most part, averaging about $23,000 a year, according to the Service Employees International Union. Most are not unionized, so they are vulnerable to low-cost automation alternatives.