October Insights: The “Robot Tax”, Worker Concerns with Automation
Plus: available labor at a state-by-state level
Coverage of issues relating to automation, labor management, material handling, inventory shrinkage, and labor issues for industrial facilities and the people who operate them.
The foolish push for a “robot tax”
It’s doubtful that this bad idea ever becomes law, but it’s still worth a look.
“Automation tax” ideas are nothing new. The concept is simple: when automation replaces workers, companies would pay taxes to offset the lost tax income from workers to government that covers payroll tax losses, losses to local economies, etc.
Never mind that every technological innovation in history has existed so that you can grind grain without people pushing stone wheels. There is also the reality that automation tends to create jobs, not reduce them. Companies are often tasking people to do things automation cannot do – and there is plenty of that work.
Key takeaways
- The interview discusses the implications of taxing robots and its potential impact on labor, wages, and inequality. The authors of the paper mention that recent advances in AI and automation have raised concerns, and the paper’s findings can be applied to these technologies. They emphasize that the key point of such a tax is not the revenue it generates but its influence on labor demand, wages, and job distribution. The tax is seen as a way to mitigate potential wage inequality caused by automation.
- The interview suggests that the optimal tax rate on robots is between 1% to 3.7% of their value.
- The author admits that a “robot tax” could (absolutely would) stifle innovation and competition.
Automation is progress, and usually results in net job gains
You can process information in spreadsheets with fewer people than it took to do it on paper. All sorts of jobs are always lost to innovation, and in turn, other jobs come into existence. But now it’s different because automation in today’s shrinking labor market may be needed some companies can function as the available labor pool continues to decline.
Companies are struggling due to shrinking labor pools, and those pools aren’t done contracting by a long shot. Automation is one of the most viable solutions to that issue, and taxing it seems to be counterproductive in a world where America’s competitors will be automating at scale.
From HBR – How do warehouse workers feel about automation?
Harvard Business Review conducted in-depth video interviews with 34 warehouse workers and 33 front-line supervisors across the U.S., UK, France, Spain, and China to discover insight into worker perspectives regarding automation. With the global warehouse automation market expected to double in the next 4 years (from $15 billion currently), the researchers wanted to know worker sentiment regarding these emerging solutions.
Key takeaways
- Workers have valid concerns: Workers have expressed significant concerns about the impact of automation on their jobs. Around 42% of negative sentiment responses highlighted fears of job loss. Additionally, 35% of negative responses centered on worries about inadequate training resources, with workers in various locations emphasizing the need for proper training. Furthermore, about 20% of responses expressed apprehension about the reliability of automated technology, with workers fearing that breakdowns could disrupt operations and that they lacked the expertise to address such issues.
- Despite concerns, there is optimism about automation: Automation is met with optimism by workers primarily due to three key factors. 42% of positive responses centered on the potential for automation to enhance workplace safety, with examples like reduced physical strain for workers. Another 38% of positive sentiment was attributed to the excitement surrounding the increased speed and efficiency brought about by automation. This was reflected in statements about improved productivity, particularly in tasks involving lifting cargo. Lastly, 20% of positive responses highlighted how automation leads to higher-quality work, benefiting customer experience and allowing for more engaging and fulfilling tasks.
- Companies must recognize the need to support employees: To navigate the transition to automation successfully, employers should emphasize growth opportunities, demonstrating how automation can lead to safer and more fulfilling jobs. This involves implementing robust training programs and establishing clear career progression paths. Also, training initiatives should incorporate hands-on practice and simulations, leveraging technologies for effective preparation in automated environments. Companies must maintain a commitment to continuous safety investments, incorporating technologies such as exoskeletons and wearable sensors, alongside fundamental measures like sufficient cleaning staff and proactive safety protocols developed in collaboration with workers.
The bottom line is that automation – as any large-scale change always does – can be disruptive
Workers understand that automation makes them safer at the job, and many understand that their employers will need to automate to remain competitive, and believe that they may have a better chance to retain their jobs, even in an automated operation.
Read more: How Material Handling and Automation Increases Labor Flexibility
Mapped: Unemployed Workers vs. Job Openings, by U.S. State
This infographic from Visual Capitalist is an excellent representation of the current American issues with labor. For every 100 available jobs, there are only 75 workers available. In that larger scale analysis, of course, some areas have a more complete labor picture than others. States like California and New York, for instance, have 110 available workers per 100 job openings. Others, like Nebraska, are starving for workers, with only .40 ratio of workers per job.
Quick hits
- “Half of Your Employees Are Looking to Leave,” according to research compiled by Gallup Workplace. Gallup recommends that first and foremost that you retain your stars by building deeper relationships with them. Make sure you talk at least weekly with those higher-performing employees and be proactive about your relationship with them. Gallup also recommends making sure your organization’s values are well-known. The article also focuses on recruiting. “If you’re unsure whether your organization is good at recruiting talent — odds are, you aren’t.”
- Researchers at Oklahoma State University are “Designing the Factory of Tomorrow.” Researchers Dr. Christopher Crick, Dr. Weihua Sheng, Dr. Bryan Edwards and Dr. Dursun Delen are working toward the ambitious goal of revolutionizing the manufacturing industry. The goal is to envision the factory of tomorrow, focusing on the ways workers and manufacturing centers interact, including collaborative interfaces with robots, AI, and more.
- In “Shrink and theft losses near $1 billion at Lowe’s — here’s how much they’re costing other retailers,” CNBC analyzed inventory shrinkage issues for the home improvement chain. The chain lost almost $1 billion to shrinkage on $97 billion sales – about 1% of sales. Losses were driven by theft, product damage, discounting and other means. Warehousing and manufacturing operations also experience pilferage, damage and administrative losses.
Tags: Automation, Manufacturing, labor, Robotics, Inventory Management
Scott Stone is Cisco-Eagle's Vice President of Marketing with more than thirty years of experience in material handling, warehousing and industrial operations. His work is published in multiple industry journals an websites on a variety of warehousing topics. He writes about automation, warehousing, safety, manufacturing and other areas of concern for industrial operations and those who operate them.