Automation Stepping Up Due To COVID
There is no doubt things were turned upside down last year. The lockdowns as a result of the pandemic certainly had an impact on the global economy. A lot of things suffered while some areas excelled.
Coming out of the situation, we are seeing similar results. Some things are doing very well while others are struggling.
One area that is excelling is anything that has to do with the manufacturing or development related to automation.
“automation takes place faster during recessions and sticks thereafter" -DARON ACEMOGLU, ECONOMIST, MIT
The collapse in the global economy, while not technical a recession, set things back. The second quarter of last year was absolutely horrific. That said, things have not rebounded in an even manner. Many industries are still trying to get their feet under then=m. This is causing a mixed employment situation.
Some industries are finding it difficult to find workers. Those at the lower end of the spectrum, unskilled labor, have plenty of options for jobs. There is a glut of opportunities, something that many are not willing to accept. States are now cutting back on unemployment benefits due to the fact that workers appear to have more money by staying home than going to work.
To fill the void, many companies are turning to automation. This is in the form of robots but also AI.
A fast food chain in Ohio is one example of an company innovating.
Unable to find enough workers, Chuck Cooper, CEO of Lee’s Famous Recipe Chicken, installed an automated voice system in many locations to take orders. The system, developed by Intel and Hi Auto, a voice recognition firm, never fails to upsell customers on fries or a drink, which Cooper says has boosted sales. At outlets with the voice system, there’s no longer a need for a person to take orders at the drive-thru window. “It also never calls in sick,” Cooper says.
This is no surprise. Over the last few years, we saw many chains adopt some kind of automation, even before the pandemic hit. McDonalds installed kiosks for customers to place their orders. Now we are seeing automated, voice recognition systems for taking orders. This is something that we can presume to happen across the board.
Supermarkets are also finding things a bit difficult. Their solution is to provide more self checkout lines. This seems like something that most will not adopt yet there was a time when people did not pump their own gas. Today, but for two states, most everyone in the US pumps their fuel.
Amazon is close to introducing their most advanced AI system which allows for shoppers to simply walk in, scan their cards, and everything the put in their carts will register. Hence, they eliminate the checkout process altogether.
What goes away is many jobs.
The future of unskilled workers is not looking very bright. As companies promote the idea of not being able to find workers (the conversation rarely touches up paying people more), they will seek to automate all they can.
Of course, this was the goal all along. Wages are one of the largest expenses for most companies. This means that if they can reduce that line item, profits should soar.
There is a point of view that tells us this is not a bad thing. Many jobs are absolute garbage. The only ones who feel people should do those jobs is people who do not have to do it. Anyone who worked in a fast food restaurant knows those jobs are pretty bad. Thus, society would be better off if they went away completely.
This does bring up a much larger discussion that society is avoiding. The best thing is for massive job loss in a quick period of time so everyone is forced to take a look at it.
Instead, we will like just piddle along with our head in the sand, avoiding the uncomfortable situation that is arising. What happens when large scale job loss as a result of automation takes place? How is society going to handle that? What solutions will be implemented, if any, so that people can have sustenance?
The answers are not going to be easy. There will be blowback no matter what is proposed. Nevertheless, if the pace of automation implemented keeps accelerating, we are going to find things very uncomfortable as corporate profits fatten along with the unemployment rolls.
Whatever direction this takes, we see that automation is already starting to penetrate many different industries. It is something that we can watch taking place.
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