Thursday, February 2, 2017

Advances in Automation Yield Income Inequality

          The “fourth industrial revolution” is a phenomenon that has slowly been approaching our lives since the first computer was assembled. This new revolution boasts endless capabilities that would replace our normal methods for carrying out all aspects of our lives. It is one that includes innovation in artificial intelligence, biotechnology, automation, and nanotechnology. In the Wall Street Journal article “Technology vs. the Middle Class”, the new capabilities of automation are highlighted in concurrence with jobs, unemployment, and future incomes. Christopher Mims, the author, suggests that a science fiction dystopian future is starting to come true, and this trend means trouble for the middle class.

            Advances in automation can increase profitability for a company, but it may not be the best in the long run. Mims predicts that the long-term effect of this will be income inequality: “In a polarized labor market, a minority of highly skilled employees – the ones who can leverage technology to be more productive – effectively replace the labor of others and are paid accordingly. Everyone else sees their fortunes dwindle”. This passage from the article summarizes Mims’s ideas on the rise of automation’s effect on the working-class. In class, we discussed the robots that Amazon uses to move storage shelves, leaving no room for any humans in the warehouse. Automation is very helpful in warehouse settings but they can be applied to almost all parts of a business. This encompassment of automation is known as “no-shoring”. Companies that specialize in this help other companies to automate everything from call centers to human-resource departments. Mims goes on to describe a situation in which automation took over the jobs of humans, but with half the number of workers. The business that previously housed 600 workers now has 300 robots doing the exact same work. From a business trying to be as efficient as possibly standpoint, automation could be the answer to the skills gap, but it will increase the income equality between the middle-class and highly-skilled workers.

            If the trend that Mims predicts comes true, the middle class will be adversely affected. For me, the idea that robots will take over a large portion of jobs in our world scares me. The disparity of wealth is already a large issue in our society, creating factions based off income. The rise of automation will only create larger gaps between these factions. Although technological advances will make the company more efficient, it is unclear whether it is what is best for the world. I think that an integration between humans and automation is the best route we can take. Instead of completely wiping out workers in favor of robots, have an even mix of the two that enhances efficiency and creates income for low-skilled workers.


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