Wait a minute. Higher skill jobs? For at least a decade, the place jobs shifted to was Amazon. If you lost your job because Amazon put your company out of business, you could get a worse, more humiliating job working at an Amazon warehouse, or as an Amazon driver. It was not higher skill jobs the market shifted to, it was Nomadland jobs. Now that Amazon is switching to robots, where are those people Amazon is putting out of work supposed to go?
> For at least a decade, the place jobs shifted to was Amazon.
It wasn't so much the jobs that shifted there as the customers, and the reason for that is that Amazon had better prices. Then people complained about the jobs they did offer because they're mechanistic and exhausting, so they automate them and then people complain about that. But that too should result in lower prices -- Amazon's retail operation doesn't make any money, it's all going to competition with Walmart, who is doing the same things to lower costs.
But lowering prices creates jobs. People pay less for a dress or a phone case and then spend the money on something else. New jobs are created doing the something else.
Where this becomes a problem is for the things where the prices don't come down, like real estate. You have extra money and now you want to buy a house, but zoning laws inhibit new housing from being built, so instead if people have any money the monthly payment you need goes up or the landlord increases your rent. Or you have to buy something from some monopolist who can raise prices to eat your disposable income. Then the money goes into some corporate holding company that just keeps growing their hoard and never spends it on products and services.
The problem isn't robots, it's certificate of need laws and high tuition.
> But lowering prices creates jobs. People pay less for a dress or a phone case and then spend the money on something else. New jobs are created doing the something else.
Isn't this the principle supposedly behind trickle down economics just by another name?
There are a lot of economic theories that are correct under a particular set of constraints and completely invalid under a different set of constraints.
So for example, if you lower property taxes, theory says that rents should go down. At the existing rents it's now more profitable to own property because the ownership costs have gone down, so more buildings will be constructed as people take advantage of the opportunity, until the increase in supply brings rents down to account for the reduction in operating costs. This theory is invalid if you prohibit new construction because then supply can't increase so rents never go down and the existing landlords just pocket the money.
The problem isn't that theory doesn't work, it's that you have to satisfy its constraints. You have to get rid of monopolies and artificial scarcity or they capture the gains that were supposed to go to ordinary people.
The fact that you can now warehouse with robots lowers the barrier of entry for warehousing, which creates new companies that will host competition against Amazon, offer contract labor for Amazon, and in both ways create jobs that are superior to the previously needed entry level pick and packer. The same laborer can now be promoted at a new company to a higher pay job that requires no greater skill set, simply because there are now more of those better jobs at more companies. We can't all be managers at Amazon. But we can all be managers at 100000 different warehouses that previously didn't exist. That's where they are supposed to go.
That seems wrong. Why would robot warehouses lead to more and better warehouse jobs for humans? Fewer humans would be necessary overall in the existing warehouses, and it's not obvious to me why a lot more warehouses would be created.
Did replacing manufacturing jobs with robot assemblers in—for example—the automotive sector, lead to more auto manufacturers and better jobs for auto workers? I don't believe it did. There may be more manufacturers now, and more jobs, but they aren't high skill or highly-paid jobs, and they aren't staffed by the people who were laid off originally (because they were mostly moved to other countries, where people can work more cheaply than the countries where the jobs were lost).
For capital intense upgrades like robots, why wouldn't the advantage go to a few big players, rather than a ton of small ones?
I also don't understand why the number of new skilled workers in this new world would somehow equal the number of warehouses workers laid off. What's the connection between those two seemingly unrelated phenomena? Why wouldn't it, for example, be a lot of laid off low-skill workers, and a just a few new, high-skilled workers?
Or for that matter, why the next generation of robots wouldn't just replace those higher-skilled warehouse jobs in a few years. And so on.
You aren't going to trust moving 100 million in product strictly to robots for a long time. And that's just a small business. And there's a lot of them.
>why wouldn't the advantage go to a few big players, rather than a ton of small ones?
Because it's still way way cheaper than labor. Maintenance means you're paying for one guy's medical benefits instead of 20 guys, for example. The labor is the cost that's difficult to overcome and gives the bigger players an advantage. When that's stripped away, it's possible to compete against the bigger guys.
Cheaper than existing labor costs, loans can overcome capital entrance, and you can afford to pay on them when there's a smaller operating cost, plus they have some fixed ROI. Existing need for more warehouses, combined, I don't see why we wouldn't see more warehouses. Of course we will.
Look at middle America. Almost every metropolitan in the country is building warehouses in and around their airports. Some indeed are Amazon's and other big suppliers, but the majority are not. They are small storage and shipping outfits. Don't forget who supplies Amazon!
Also, the push for more condensed housing means fewer people per household which means more duplicate junk per person as they won't share with another household, obviously.
Growth means warehousing. There's no way around it. Unless we will manufacture domestically, that demand isn't going anywhere.
The moat is definitely smaller when labor, your biggest cost, is smaller. You can finance a purchase that's much larger if you are able to make the monthly payment because you don't have high labor costs. Purchasing has an ROI, and labor doesn't.
The robots replaced the frontline laborers, yes. But someone now needs to maintain, build, and engineer new robots. Hence they said the laborer's job was replaced with one that requires fewer people at a higher skill (and probably pay) level. Or at least that's what I picked out from their comment.
Please note that while the robot is replacing local jobs, the people engineering, building, and maintaining robots could be ln the other side of the plant also. In a world that's seen a huge amount of consolidation we are likely to see further consolidation.
My understanding was that they're saying it's the act of replacing the worker with a robot that requires more skilled workers to maintain/design/manufacture/etc., not that it merely resulted in a layoff.
