Will Robots Take Rhode Islanders’ Jobs?

It may be Labor Day, but the reality is that tens of thousands of Rhode Island jobs are at risk to be replaced by robots, according to a number of new reports — including new research released recently that claims that increasing the minimum wage further expedites the shift to automation.

Two leading economists warn that raises to the minimum wage will increase the shift to automation.

“Manufacturing has been the most vulnerable in the past and will likely continue to be so. However, we can expect that other jobs will also become automated. These are jobs where consumers may care less about who provides them and technology have already made significant inroads - like waiting tables, brick laying, taxi driving and delivery services,” said Grace Lordan of the Department of Social Policy at the London School of Economics, in an interview.

Lordan wrote "People Versus Machines: The Impact of Minimum Wages on Automatable Jobs," along with Professor David Neumark of the Department of Economics at the University of California at Irvine.

“Conversely jobs where empathy is part of the job will be safe from automation - like child care and even hairdressing," said Lordan.

Some argue that American jobs are at risk because of poor trade policy, others claim it is illegal immigration, and others are claiming the increase of minimum wage will create more vulnerability. The implications for Rhode Island's economy will be significant.

Record Robot Sales

Orders for robots are exploding. “An all-time high total of 9,773 robots valued at approximately $516 million were ordered from North American robotics companies during the first quarter of 2017,” reported the trade organization Robotics Industry Association in May of 2017.

“This represents growth of 32 percent in units over the same period in 2016, which held the previous record.”

Just one local example of the use of robotics is in May of 2014, Care New England began using germ-zapping robots that eliminate hard-to-kill microorganisms in hard-to-clean places.

Two robots were placed at Kent Hospital in Warwick, and one is in place at Memorial Hospital in Pawtucket. The healthcare group claimed,"Xenex Disinfection Services’ UV disinfection system is the fastest, safest and most effective method for the advanced cleaning of hospital rooms, and is scientifically proven to destroy all major classes of microorganisms that can cause hospital-acquired infections (HAI)."

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David Chenevert with the Rhode Island Manufacturers Association said that currently, he isn't too concerned about the impact of minimum wage increases on automation in the industry.

"The workforce environment has changed dramatically -- you won't see many hires [in manufacturing] in just the minimum wage category," said Chenevert. "Sure it could be a starting wage for someone, but manufacturing is more about providing someone with a livelihood to support a family."

"Manufacturing has evolved into more advanced technological operations -- so it's more about someone's capability and education," said Chenevert. "A lot of these jobs require astute knowledge of English, math, computers and being problem solvers. "

Top labor activist agrees. “Look, you see surgeons being replaced all the time -- where automation is having the most impact now is with places like the surgical suites rather than low wage workers,” said Michael Araujo who is the Executive Director of RI Jobs With Justice.

“The discussions around the implications of ‘automation’ have been going on since the emancipations of slaves -- and trying to get out of paying wages has been the driving force,” adds Araujo. "Just look at who is putting these 'studies' out."

But Lordan warns, “We do not want to stop automation, but flag that minimum wages that are set too high will accelerate the adoption of these technologies. Policy makers need to seriously consider the skills that tomorrow's low educated workforce will need to ensure that we don't end up with incomes that are even more polarized than they are currently. We also would like to emphasize that those who are affected may not get gainful employment again after their job disappears - particularly older workers."

Rhode Island’s top conservative fiscal policy group says that continuing to increase minimum wage may cause employers to push towards robots.

"You should use common sense -- if labor costs more, there is a lower demand for it. That's a basic tenet of economic policy. And I do have an economics degree from Harvard,” said Mike Stenhouse, who heads the RI Center for Freedom and Prosperity.

“For some reason, progressives and 'living wage' advocates think the laws of economics don't apply to minimum wages. So I ask people to use common sense in which reports to believe. If they show that automation costs less than labor, there will be more automation and less labor,” said Stenhouse.

“What's the option? Look at copy editors being replaced-- do you keep biddings wages lower under you're competing with an electron -- what's the point? The bottom line is people still have to eat,” said Araujo.

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