The Effects of Automation on Jobs

By Eric Halvorson
February 21, 2022
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Summary

With a sharp increase in the use of robotics in the manufacturing industry, there is valid concern about how the future workforce will be shaped. Factories that employed hundreds, even thousands of employees now require only a fraction of that number due to increased automation.

Automation has taken the manufacturing industry by storm. Even in the years prior to the pandemic, many people worried about the effect of automation on the jobs of tomorrow. With a sharp increase in the use of robotics in the manufacturing industry, there is valid concern about how the future workforce will be shaped. Factories that employed hundreds, even thousands of employees now require only a fraction of that number due to increased automation.

According to a recent study from Carl Frey and Michael Osborne, 47% of U.S. jobs will be automated within the next 20 years. But what the study didn’t address is that throughout history, as manufacturing processes evolved, so did jobs. When Henry Ford introduced the assembly line, jobs weren’t lost - they evolved into better jobs. Instead of a crew building one car every 12.5 hours, the updated factory turned out a car every 93 minutes.

As production increased, investments were made in more factories, leading to an even bigger increase in the jobs market and allowing more people access to more higher paying jobs. The assembly line was introduced to other industries as well, such as meat packing, which likewise benefitted from increased productivity. There was also a transition in agriculture during that time. Farming became more mechanized, requiring fewer laborers, which led people to shift from rural jobs to factories.

More recent examples of the effect of automation on job growth include the introduction of the automated teller machine (ATM) and Microsoft Excel. With the onset of ATMs, banks needed fewer tellers to assist a growing customer base. However, the use of ATMs also significantly reduced the cost of opening new bank branches, leading to a large growth in the number of branches. This resulted in a net increase in the number of human bank tellers, who were then able to work more directly with customers and less as cashiers. Similarly, when Microsoft introduced Excel in 1985, some bookkeepers were replaced by the new software, but the overall number of accountants increased 75% as they were then tasked to do more. Instead of just calculating numbers, accountants could help business owners compute what would happen if they made changes to their workforce numbers or profit margins.

Today, we live in a world of instant gratification, where consumers order online and expect to receive products within a week or even same day! Building products in the mass production needed today on a factory line staffed by people would be impossible, and quality would also be a major concern. Manufacturing needed to evolve to keep up with demand, so new plants around the country are introducing more automation than ever before. Amazon, Intel, Foxconn, and others have elected to manufacture the bulk of their products with robots, enabling cutting-edge technology to be available in just days or weeks, depending on the backlog. Considering the amount of technology crammed into small devices like cellular phones, it is an astonishing feat.

When industries undergo shifts in technology and processes, employees may experience fear or higher levels of apprehension. Fortunately, history has taught us what to expect from the changing atmosphere. As manufacturing evolves, we know that jobs will as well, and for the better. Fewer employees may be needed on factory lines, but there will be greater numbers of jobs in other areas of the business. The World Economic Forum predicts an increase of 58 million jobs worldwide and expects most will be high-skilled. From talking with customers and working in research and development to maintaining the automated processes, automation will give workers new options for more fulfilling employment.

About The Author

Eric Halvorson is partnership marketing manager II – Strategic Programs at Digi-Key.

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