Neely Young: The Robots Are Coming

There is a paradox in Georgia. The Georgia Department of Labor estimates there will be almost 483,000 new job openings by the year 2020, mainly in the restaurant, hotel and resort industries and healthcare sector. Even today an estimated 20,000 healthcare jobs are available. Yet Georgia’s unemployment rate is hovering around 6.1 percent, compared to 3.9 percent in Minnesota. Why exactly is our state unemployment still higher than the 5.1 percent national average?

Could it be that the unemployed and those who have dropped out of the workforce are not attracted to the work that is available because most of these new jobs are in low-paying categories?

A resort executive who manages a hotel located on the Georgia coast believes, “Many people who have been in good jobs and been laid off don’t want to wash dishes or wait tables.” He blames the Georgia legislature for running off employees with the state’s harsh immigration laws.

“To make sure we were within the law, our company asked all our employees to fill out E-verify forms to prove they were U.S. citizens. The next week, 40 percent of our employees were gone,” he says. It was hard to fill the jobs because many here legally couldn’t afford to work for low wages.

A number of higher-paying white collar and manufacturing jobs have disappeared because they have been moved offshore or because they have been replaced by robotic technology. A carpet executive in Dalton was asked why floor covering was making a comeback but the area’s unemployment rate was still high. His reply: “During the great recession we purchased new equipment that requires very little manpower; thus we are not rehiring, even though our industry is recovering.”

There’s a story about industrialist Henry Ford’s grandson, Henry Ford II, and Walter Reuther, head of the United Auto Workers union, touring a new engine plant in the 1950s. Ford gestured to a fleet of machines and said, “Walter, how are you going to get these robots to pay your union dues?” Reuther replied, “Henry, how are you going to get them to buy your cars?”

Northwestern University economist Joel Mokyr spoke in Atlanta at a Federal Reserve public affairs forum a few years ago. His speech was titled, “Is the End of the Innovation Age Upon Us?” Mokyr believes that robots could replace humans in many of today’s jobs. Middle managers and other wagers will be susceptible to elimination due to automation. The carpet industry example could apply to many other industries as well.

During the Industrial Revolution in the 1800s, many jobs were eliminated when looms replaced handwork. But the people who were displaced learned new skills and found other work. Just as in those times, many believe that in today’s world, additional high-tech jobs will be created and help fill the gap.

All of this talk of robots and jobs brings to mind the 1951 Alec Guinness comedy, The Man in the White Suit. Guinness plays a scientist who invents a fabric that will never get dirty and never wear out. When he brings the idea to cloth manufacturers, the producers realize the invention would put them out of business. The mill owners try to buy him off with a million dollars to keep his invention a secret. When he refuses, they turn on him and tell their workers about the invention and the threat to their jobs.

In the final few minutes of the film, Guinness is chased by an angry mob. As he runs for his life, his indestructible suit starts to disintegrate, and he is standing in the street wearing nothing but his underwear. The suit’s material had a short lifespan. Everyone left happy except the man in the white suit, who was left with nothing but a bewildered look on his face.

In Georgia, and in the rest of the nation, using technology to replace jobs could have unintended consequences – unless they are accompanied by new initiatives and opportunities for new jobs. Mill owners, financial investors and others could wake up one day to find themselves out of business. Their products and services would be worthless if so many are out of work that there is no one left who can buy them.

Just like the man in the white suit, we could end up with nothing.

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