Question

Please view the 13 minute video Are Robots Hurting Job Growth (60 Minutes, CBS) and answer the following questions: a. Analyze the impact of a reduction in the cost of robots and workplace automation on overall employment in the U.S. In your answer, explain which types of workers are likely to be most adversely affected by robots and workplace automation? Are there any types of workers whose labor market prospects may improve with robotization? This question encourages you to think about the nature of the substitability and complementarity between robots and different kinds of workers and occupations, as well as scale effects. b. The Marginal Rate of Technical Substitution, or MRTS, is a measure of the degree of substitutability between two inputs in a production function. See pp. 86-88 (the section “The Production Function”) in Appendix 3A of your text. Based on the interview with the manager of the automated warehouse shown in the video, what is the MRTS between robots and warehouse workers? 2 c. Historically, how has the labor market reacted to technological change? Why do the researchers featured in this video predict modern technological advances like robots will be different?

Answer 1

In today's world of machines and machine learning, it is easier for large-scale companies to use robots instead of employing human labour. The reason is that the development in the field of robotics and artificial intelligence is increasing at a fast pace. Corporations have realized the potential of these machines that are more efficient than humans in many areas of work. A repetitive, structured and routine task can be assigned to a machine as it would have far more efficiency than a human being. Many industries have now replaced human labour with machines in specific areas of work as it is time saving, cheaper and more efficient to do so. This includes manufacturing industries, software industries and now it has taken over significant tasks in the service industry as well. For example, amazon, ebay and other e-commerce websites have AI that analyses the user preferences and search patterns and suggests products that they would be willing to consider buying. This eliminates the need for human sales personnel. Robots are now assisting nurses and doctors in hospitals. From transporting medicines to assisting in surgical procedures, integration of robots in fields of human specialty is happening at a steady pace. Human and machines have now become partners, in the sense that machines have made life easier for humans by providing assistance, which is the main reason for their creation and existence. As mentioned above factories employ advanced robots that do most of the mechanical work that used to be done by man. Terms like mechanization, automation, artificial intelligence and machine learning, which once were restricted to the tech-experts have become a part of layman vocabulary. This shows how machines have a secured a place for themselves in our day to day lives.

Based on the video interview with the manager in the warehouse, it is clear that the Marginal rate of Technical substitution of robots and humans is quite high and seems to be increasing gradually. This means that robots are slowly taking over a majority of work that humans used to do. The labor market has always had a feeling of insecurity with regard to jobs as they have witnessed a reduction in demand for middle level workers.

Researchers in the video predict that modern technological advances like robots would be different as in the last decade we have witnessed a tremendous increase in the capabilities and intelligence of these machines. They are now used in every field ranging from geo-navigation and space exploration to advanced surgical procedures, pattern identification, data management etc. The list would be endless. Most of these developments are not more than two-decades old. One can imagine why the researchers felt that the future will be way different from what it is now.