Wednesday, August 21, 2013

The Demand for Low Skilled Workers Just Fell

For over two centuries, mechanization in agriculture led to huge increases in output per farmer so that the demand for farm workers fell. Mechanization in manufacturing has led to so much worker productivity that, even though employment fell nearly 40%, output has more than doubled in the last 40 years. Slowly, mechanization is making inroads on some routinized services jobs - e.g. ATMs and bank tellers, scanners and grocery store clerks or MOOCs and professors? But some very low skilled jobs seemed to be stubbornly impervious to mechanization.

Now mechanization may be reducing demand for hamburger flippers. Momentum Machines has mechanized hamburgers preparation that they claim that is able to produce 360 fresh hamburgers per hour with tomatoes, pickles and such sliced to order.
Perhaps other fast food items will soon succumb to mechanization too.

1 comment:

  1. I agree that demand for low-skilled workers has dropped substantially, and will likely continue to drop. As technological advances allow for machines to do the work of 2 or 3 workers, and organizations want to reduce overhead associated with labor costs, the low-skill jobs will slowly disappear.

    When you visit Walmart or Home Depot, notice the “self check out lanes”. One employee watches all 4 registers and the consumer “runs the scan/register”. Personally, I refuse to use the machines. I feel that since there is no monetary incentive for me to use the register, and I would be taking work away from someone, the benefit just isn’t there.
    When I was young, my sister worked as a bagger at Price Chopper. Now the person working the register also bags the groceries. This too is a reduction in low skill workers.

    “Most analysts agree that todays employers demand more skills than they did in the past. Several factors have contributed to the rising demand for skills in the labor market: technological and organizational change, trade, deregulation of key industries, and the decline of unions. Three types of empirical evidence support the hypothesis that the demand for skills has risen: estimates of the returns to skill, time series data on the content of a representative sample of jobs, and evidence from case studies of individual firms or industries. (Lerman, n.d)

    When you go out to dinner, now at many establishments, the diner is asked to tap the screen to pay and swipe their card, order their food from the tablet, etc.

    I feel that we may be losing the closeness and personal contact. Technology is great, but at what point is it detrimental to our interaction and society as a whole?

    Lerman, R. An overview of economic, social, and demographic trends affecting the US labor market.