Citi’s Tobias Levkovich writes about the rise of robotic workers in fast food and other service industries:
But, policy reactions to any change tend to be somewhat populist and politically expedient, especially since louder, strident and often extreme voices are heard over the apathy of the silent majority. For example, lifting the minimum wage, which affects a small proportion of the working population, while well intentioned, may perversely hasten the introduction of robots into fast food restaurants and these machines never need a bathroom break. While most of us consider robots to be more of a factory phenomenon and industrial robot sales have been on a steady ascent (depicted in Figure 3), the broadening out of their uses due to further advances in sensors and monitoring systems, suggests that factors like artificial intelligence could make their adoption expand into many other areas.
New machines are being used at various companies to move product in warehouses to the shipping docks. Supermarkets are testing machines that arrange products on shelves (one already can do self-checkout and payment) and various companies are studying self-driving vehicles.
In this context, less skilled employment may be at risk. But, before getting too comfortable about one’s own skillset being above average given a good education, it is interesting that machines can read MRIs and can replace radiologists. They can review legal contracts and only flag anomalies, replacing numerous young lawyers who might actually be relieved to not have to go over such tedious documents, but their futures get muddied by the development too. Even these arguably highly skilled workers may find themselves on unemployment lines.
In this sense, technology which has been growing as a percent of GDP (see Figure 4) could have a downside for workers even as keeping labor compensation down may be good for corporates trying to maintain earnings.In the past, cheaper prices meant more consumption but people ultimately need to have jobs to generate the income with which to spend. Furthermore, governments need tax revenues from that income to sustain their fiscal programs.
The speed at which technology is adopted means that there is less time to retrain workers for the new environment and, given an aging workforce, some may opt for early retirement though few seem to have much in terms of savings to do so. In conjunction, entitlement programs may be seeing a surge of demand and the traditional opportunities for new immigrants who do not speak English well may find the jobs they would have taken in the past (like cab driver or gardener) being replaced with robots.
Although, migrant agricultural workers probably are protected for now since fruit picking machines have had a tendency to crush the produce and such systems have been tried unsuccessfully in vineyards already but one cannot rule out engineering advances that get the machines up to par. The aspect of artificial intelligence which is pattern recognition and then reaction also might alter the dynamic in a way which is unforeseen at the moment.
… we are wary about the worker displacement effects and political pressures that may ensue from the rallying unemployed who want quick solutions. We fear that governments will look towards convenient and expedient responses rather than thoughtful and longer term ones that have greater chances of success. As a result, policy makers could end up causing more disruption and that is a somewhat unpredictable risk to our longer term bull thesis.