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Current employment rates may force businesses to rely on technology

February 18, 2022
<p>Illustration of money.</p>

Illustration of money.

Photo by Madison Echlin | The State News

Increasing wages, adding benefits and even offering to pay for one’s college tuition are some of the strategies businesses are using to get people to work for them.

Based on the current trends in employment rates, these strategies are not causing a significant difference. From December 2021 to January 2022, the unemployment rate increased from 3.9% to 4.0%. Data for Lansing is similar to national trends, with the unemployment rate at 3.8% in December 2021.

Minimal changes in the employment situation are causing big changes in the economy.

Supply chain expert David Closs said that many baby boomers who had supply chain jobs have stopped working due to retiring, having income from other sources or not wanting to risk getting COVID-19. Since millennials are not closing the employment gap by working in plants or other supply-chain environments, there is a lack of workers, leading to product shortages and inflated prices.

“That tells me that (inflation) is not going to be a short-term issue … until you get either people that want to continue working or technology to change it,” Closs said.

So, new technologies that will reduce the requirement of human labor are most the obvious solution to this problem, Closs said.

“I’m saying that not in a negative sense. … If the people don’t want to work, then (businesses) have to get something else and there are technology solutions that are coming online,” Closs said.

Autonomous trucks are one example of advanced technology that will not require humans. Michigan State University also recently introduced the autonomous bus that does not require a driver, but currently has one onboard to take control if necessary.

Digital innovation expert Johannes Bauer said this could happen; some jobs may get replaced by technology, then other jobs can emerge as a result of technology massively replacing human labor.

“As … artificial intelligence, big data analytics and robotics become more sophisticated, maybe the idea that we will just shift jobs to other activities will not hold anymore and maybe there will be a massive replacement of human labor,” Bauer said.

Bauer said it’s hard to tell which perspective is true.

“One reason why jobs get automated is the cost of hiring human beings to provide services tends to increase,” Bauer said.

This is America’s current employment situation. Since September 2021, wages have increased by 1.1% and benefit costs increased by 0.9%, according to labor statistics.

If wages are going up and productivity is not, then it leads to more expenses for businesses, like human labor.

 “One reason why we see robots in some countries … is to save costs,” Bauer said.

The jobs with the highest risk of being replaced by technology are routine jobs that can be automated easily, Bauer said. The jobs at the lowest risk of getting replaced by technology are jobs that cannot be easily automated like caretaking or cleaning chemical equipment, for example. However, the jobs that are hard to replace by technology, tend to be low-income jobs.

“Low-income jobs are increasing, the high-income jobs are increasing and the middle-income jobs are falling away, which is bad for society at large really because now we’re losing the jobs that have made many Americans prosperous over the past few decades,” Bauer said. “Most people think this is the impact of technology because it’s those types of jobs that are in the middle that can be routinized and replaced by machines.”

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