Automation and jobs

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In this 2013 photo, Rosser Pryor, co-owner and president of Factory Automation Systems, sits next to a new high-performance industrial robot at the company’s Atlanta facility. Pryor, who cut 40 of 100 workers since the recession, said while the company is making more money now and could hire 10 people, it is holding back in favor of investing in automation and software.

By Kathy Ruff

Automation in the workplace has increased productivity and profits, created consistent quality and improved working environments.

While investment in automation has doubled output per manufacturing worker over the past two decades, the U.S. lost nearly five million manufacturing jobs since 2000.

Northeastern Pennsylvania mirrors that trend, seeing increased automation contributing to the rise and fall of employment for a century in industries including manufacturing of textiles and steel and coal mining.

“We usually associate automation in manufacturing these days with elimination of jobs,” said James Bessen, economist at the Boston University School of Law. “Manufacturing was almost a third of the workforce back in 1950 and now it’s under 10 percent of the workforce. Technology or automation is the major reason for that decline.”

Bessen believes consumer demand and the implementation of automation play a huge role in the rapid and dramatic job growth in many industries including textiles, steel and automotive manufacturing.

“Automation creates jobs in the beginning and then destroys jobs in the end,” he said.

According to Bessen, consumer demand for cloth in the 19th Century led to creation of automation to meet that demand, growing jobs, raising productivity and lowering prices.

“Come to the 20th century, however, people now have closets full of clothing,” he said. “They have draperies. They have upholsteries. A drop in the cost of cloth isn’t going to induce them to buy much more cloth. When demand doesn’t increase, then automation does tend to eliminate jobs. That’s why you have this reversal.”

This pattern became prevalent throughout the manufacturing sector worldwide. Today Bessen sees that pattern continuing in other industries.

“Everybody assumed the ATM was going to eliminate bank tellers,” he said. “In fact, there are more bank tellers. What happened was, just as automation made it cheaper to produce cloth, the ATM made it cheaper to operate a branch office. That meant they could open many more branch offices and compete in the marketplace. They only needed 30 percent less workers per office but the number of offices grew even faster.”

Bessen sees that jobs are not necessarily disappearing but rather that emerging new jobs require new skills. Others agree.

“In the majority of cases, automation has been integrated into repetitive, low-value-add and high-risk processes as a way to speed up production or reduce the potential for injury,” said Eric J. Esoda, president and chief executive officer of Northeastern Pennsylvania Industrial Resource Center, Hanover Township. “Examples include using robotic sensors and arms to quickly pick and pack items off a high-speed production line, lifting and manipulating extremely heavy components or semi-finished goods for further processing and autonomously testing the quality of finished goods.”

Unlike the common belief automation hampers manufacturing job growth, Esoda sees the opposite, especially in the growth today of the robotics industry.

“The clients we’ve seen implement this technology have created new jobs as a result of its benefits,” he said. Those benefits include lower per-unit production costs, reduced operations costs and more competitive prices that can create increased profit margins, a larger market share and more hiring.

Esoda sees automation and jobs hand-in-hand.

While manufacturers most often use systems automation in a standardized high-volume production process, more are getting into short runs of customized products that command higher prices and yield higher margins.

“Automation doesn’t lend itself to these customized tasks,” Esoda said. “In order to pursue the custom product market, a manufacturer needs to bring on engineers and associates capable of making those products in a non-automated environment. By automating certain facets of the production of its base outputs, manufacturers free up associate time to work on custom products or new products. As those segments of the business expand, so too will employment.”

With that expansion, industry observers see opportunities for higher-skilled, higher paying jobs.

“It can become a very easy argument to those who don’t understand the benefits of automation that automation takes jobs away,” said David R. Cotner, dean for the School of Industrial Computing and Engineering Technologies at Penn College, Williamsport. “Automation ultimately can create jobs because it takes people to create the automation, to build the machines, to control the automation, to program it, install it, troubleshot it and maintain it.”

Cotner sees the need for a higher-skilled worker as employers such as Frito-Lay and Kellogg’s in the Greater Susquehanna Valley area use automation to get products quickly produced, onto a truck and into a store.

Change in manufacturing and other industries due to automation is not new and likely will continue as technologies advance.

“The whole society is changing,” said Joseph J. Sebelin, executive director of the Pocono Counties Workforce Investment Area, Jim Thorpe, Carbon County. “Automation will reduce the number of jobs that are necessary. There will be jobs that automation will eliminate and reduce, but there are jobs at this point that cannot be reduced in terms of labor.”

Jobs for carpenters, plumbers, electricians and similar specialty and technical-skilled positions remain in high demand.

“There are some things that cannot be automated, the maintenance mechanic, the maintenance person who takes care of all the equipment to operate,” said Sebelin. High demand continues for specially-trained workers to oversee air conditioning, electrical and plumbing systems in hospitals, resorts and other businesses and industries.

According to Esoda, workers need training in high-demand skill areas including for advanced manufacturing, robotics, additive manufacturing, product design, engineering, mechatronics and similar disciplines.

So what do people need to know about today’s economy in the job market?

“Workers will need to work more closely with technology, freeing up more time to focus on intrinsically human capabilities that machines cannot yet match.” (Excerpt from A Future That Works: Automation, Employment and Productivity by McKinsey Global Institute, January 2017).

Those human capabilities include logical thinking and problem solving, social and emotional capabilities, providing expertise, coaching and developing others and creativity.

“Now everything hangs on life-long learning,” Sebelin said. “When you’re in a job, the job changes constantly and you have to be able to keep up with that. You must be able to progress. You’re not going to get a job where you retire from a job in 20 to 30 years. It’s not that kind of an economy anymore.”

Esoda says the message is clear: “We have to train tomorrow’s workforce today.”

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