The Tech Boom Has Done Little to Alleviate Underemployment in the US – Part Three

WhatsApp had more than 450 million users world-wide when Facebook bought the messaging service for $19 billion in 2014, turning founder Jan Koum into a billionaire several times over. At the time of the acquisition, WhatsApp had 55 employees. (Read this paragraph over again: A $19 billion dollar business has only 55 employees! So this is the future that lies ahead. We’re either going to have to drastically reduce our population or find something productive other than work for the out-of-work workers to do.) 

Economists call the phenomenon “skill-biased technical change.” The spoils of growth go to those few people with skills and luck and who are best positioned to take advantage of new technology. (Such as Jan Koum of WhatsApp, in the previous paragraph)

The five largest U.S.-based technology companies by stock-market value—Apple, Alphabet, Microsoft, Facebook and Oracle Corp. —are worth a combined $1.8 trillion today. That is 80% more than the five largest tech companies in 2000.

Today’s five giants have 22% fewer workers than their predecessors, or a total of 434,505 as of last year, compared with 556,523 at Cisco Systems Inc., Intel, IBM, Oracle and Microsoft in 2000.

bn-qe069_1007te_p_20161007172820                 Robots help fill orders at an Amazon.com warehouse in Tracy, CA

Amazon uses 45,000 small robots at about one-third of its U.S. warehouses to automate order processing. The robots look like bread boxes on wheels, lifting modular shelves stuffed with products and carrying the shelves to workers who pick out pieces.

An Amazon spokesman says the company has added about 200,000 employees since it began using the robots in early 2012. Amazon has 268,000 employees world-wide.

Robots aren’t dexterous enough yet to identify different sized-packages, pick the right ones and place them safely in boxes, says Mr. Brynjolfsson, the MIT economist. That is the fundamental skill in warehousing. Researchers now are trying to automate that part of the job, too.

In coming decades, machines are likely to replace new forms of routine work done by humans. From 1991 to 2001, the number of secretaries declined about 35%, according to the Bureau of Labor Statistics. The number of textile and apparel workers fell 37%.

For a long time, those with bachelor’s degrees in science seemed to be safe from automation-related layoffs because their cognitive knowledge was tough for computers to duplicate. Less-educated workers who dispense personal service, such as home health aides or masseuses, also seemed safe.

Harvard University economist David Deming estimates that the hollowing-out of work spread to programmers, librarians and engineers between 2000 and 2012. As much as $2 trillion worth of human economic activity could be automated away using existing technologies, such as Amazon’s robots, in coming years, consulting firm McKinsey & Co. estimates.

Knightscope Inc., based in Mountain View, Calif., makes robots that serve as night watchmen. ( So they’re eliminating even this lowly minimum-wage job for the poor stiffs who can’t do anything else. Heartless!) About three dozen are on patrol, including at shopping malls, corporate campuses such as Microsoft’s in Mountain View and the new home arena of the Sacramento Kings. Knightscope clients pay $7 an hour per robot.

1413739866467_wps_88_for_mall_series_massachus                                                              Too expensive?

“Robots don’t complain,” says Stacy Stephens, a Knightscope co-founder and vice president of marketing and sales. “There’s no pension. And there’s no worker’s comp,” he adds.

End of article

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s