Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

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Technological Unemployment Jobs Apocalypse is here

Evidence that a “jobs apocalypse” caused by technological unemployment has arrived in Middle America was uncovered last month and nobody noticed.

Hooking up an industrial robot is now cheaper and easier than hiring a human worker for some companies, The Washington Post reported on August 5.  A unicorn called Hirebotics is leasing robots to factories for as little as $15 an hour.

At that rate, leasing a robot will be cheaper than hiring a person for many companies. Something to remember here is that human workers have many extra costs that robots lack; including health-insurance, recruiting, hiring, interviewing, drug tests, background checks, overtime, and training, to name just a few.

The savings from “robotization” will be far greater than many think because of a robot’s nature. A robot does take vacations, days off, and sick days for example. Nor does a robot require a lunchroom, lunch breaks, bathroom breaks, bathrooms, smoke breaks, a parking space, or an ergonomic work environment.

“One of the great benefits is there is no overtime, EVER!” Hiberbotics’ website tells potential customers. “Work them as many hours a week as you want and you will always pay the same hourly rate regardless of how long the days get.”

“Also, unlike traditional workers which tend to slow down the longer, they work (here’s some research) the robots never slow down, no matter how long they work,” Hirebotics exclaims. “They also don’t need breaks to go to the bathroom.”

How America’s Labor Shortage is Driving Technological Unemployment

Robots do not steal, go on strike, join unions, come in late, quit unexpectedly, take drugs, get drunk, or quit when they get offered a higher salary. They are also easier to find, which is why companies like Tenere Inc.; the parts maker featured by The Post are turning to them.

Tenere had such a hard time finding workers in Wisconsin that it moved part of its operations to Mexico, Post writer Chico Harlan reported. Around 132 jobs were unfilled at Tenere’s factory in Dresser, Wisconsin, when Harlan visited it over the summer.

Tenere rectified its labor shortage by leasing robots from Hirebotics, Harlan reported. What’s truly disturbing here is that robots from companies like Hirebotics are now cheaper and more efficient than human workers, Harlan’s reporting indicates.

Robots are now More Cost Effective than Humans

At Tenere one of Hirebotics’ Danish-built robots can press 9,096 pieces of metal into shape every day. A human worker is supposed to press 1,760 pieces into shape every shift.

Therefore a robot is doing the work of four humans which means Tenere actually saves $336 a shift by going with Hirebotics. According to Harlan, average pay at Tenere in Dresser is $10.50, an hour, if a worker put in a full eight-hour shift that adds up to $84 a day or $336 a day for four workers. The robot saves Tenere $1,060 a week at those wages.

That means companies are close to breaking even on robot investment costs at Hirebotics’ minimum rate of $15 an hour. Hirebotics’ has a minimum lease requirement of 80 hours a week which works out to a cost of $1,200 a week.

With such costs, it might take a couple of years for a robot to pay for itself. Some industrial robots now cost as little as $30,000 about the price of a basic new car, Harlan reported. Therefore, robots might now be more cost-effective than humans in many jobs.

Such savings are certain to attract the attention of investment bankers, investors, accounts, and managers all over the country. It will not take long for companies in other sectors of manufacturing and labor-intensive businesses such as retail, warehouses, and restaurants to notice such cost-effectiveness.

News stories indicate that several companies are developing robots for use in restaurant kitchens. Zume is testing robot pizza chefs in San Jose, while Flippy the robotic hamburger maker is hard at work in the Los Angeles area.

Technological Unemployment Jobs Apocalypse is Upon Us

It looks as if the long-feared technological unemployment jobs apocalypse that pundits have been predicting is here. The devastation it will unleash on already struggling places such as rural Wisconsin will be vast.

Organized anti-technology movements, civil unrest, and violence are likely to follow. One has to wonder when the first band of robot-smashing Luddites is going to invade a factory in the Rust Belt. My guess is that the next-generation Luddites are already organizing at corner bars and Bible churches in the heartland. The introduction of anti-robot legislation in state legislatures and Congress is sure to follow.

Disturbingly, the Big Media will be taken completely by surprise by these developments. The so-called journalists will be puzzled when the governor of Wisconsin or Michigan has to deploy the National Guard to protect factories and trucks delivering robots from Luddite mobs. The same reporters that did not see Trump coming, will be caught equally flatfooted when a “ban the robots and smash the machines” candidate wins an election in Ohio.

Did the Washington Post miss the Story of the Decade?

The “journalists” at The Washington Post will have only themselves to blame for the surprise. They had the story in August and missed it entirely.

Harlan turned the scoop of the decade into a dreary human interest story. Most readers probably gave up on the piece because the lead was about workers smoking cigarettes in the parking lot, not robots taking jobs.

Harlan’s piece demonstrates the dangers of what I like to call the “featurization” of news. That is writing every news story like a feature and trying to give it a “human-interest” angle. Forget the facts and ignore the issues, instead concentrate on the “human angle.” Harlan’s piece is actually worse than most it begins with a pointless human interest angle; ignores the big news and fails even to meet the basics of reporting.

Nowhere in the story did readers learn where the Tenere factory was located – it is in Dresser, Wisconsin. To make matters worse they had to wade through several paragraphs of meaningless copy to find the real story. One has to wonder if anybody at The Post has even gone to journalism school.

Perhaps Jeff Bezos should use some of his money to hire some real journalists to fill a few positions at The Post. That might produce news copy real human beings actually want to read.

Hopefully, our political leaders will be more attentive than the Fourth Estate and take some positive action to deal with the effects of the robot jobs apocalypse. If they do not, we could be in for a wave of civil unrest and riots as great as that of the 1890s.