Daily Archives: March 19, 2017

With President Trump now in office, automation has taken center stage in the employment debate.

Manufacturing jobs in the U.S. have declined steadily over the last generation, largely due to automation, and now new technology is threatening the jobs of millions of other Americans. Self-driving vehicles could put truck drivers and cab drivers out of business, and in the restaurant industry, which employs about 12 million people in the U.S., new technology is increasingly making human tasks unnecessary.

Image source: Getty Images.

Fast-food chains likeMcDonald's(NYSE:MCD) and convenience stores like Wawa have turned to kiosks to take customers orders, replacing a job formerly done by order takers and cashiers, and full-service restaurants like Brinker International's(NYSE:EAT) Chili's have installed tens of thousands of tableside tablets, allowing customers to order items directly from the kitchen without the need to communicate with a server.Chili's has found that doing so not only cuts down on labor, but also encourages customers to order more.

Andy Puzder, the CEO of the parent of Carl's Jr. and Hardee's and Trump's first pick for Labor Secretary, has been a big advocate for automation, saying about machines, "They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case."

And it's not just in the front of the house where technology is edging out human labor, as restaurants are increasingly adopting machines to perform basic and even complicated kitchen tasks.

A burger chain in California called CaliBurger just raised the bar in kitchen automation last week when it introduced a new machine called Flippy, which can fully cook a burger from start to finish. Like other robots built on artificial intelligence, the machine, designed by Miso Robotics, uses cameras and sensors to determine when a burger is fully cooked. It also uses machine learning to teach itself as it goes so it constantly improves with experience.

David Zito, CEO of Miso, said, "Though we are starting with the relatively 'simple' task of cooking burgers, our proprietary AI software allows our kitchen assistants to be adaptable and therefore can be trained to help with almost any dull, dirty, or dangerous task in a commercial kitchen -- whether it's frying chicken, cutting vegetables, or final plating."

CaliBurger said the advantages of Flippy is that it's faster, safer, and less likely to make a mistake, and it plans to add 50 of them to its restaurants by 2019.

Technology alone isn't enough to convince restaurant operators to invest in robots like Flippy; such a switch must be financially viable.

But restaurants are one of the most labor-intensive businesses out there, with operators often spending 25% of their revenue on labor. Many chains have complained recently of rising labor costs as a number of states have hiked their minimum wages in the last year or two.Shake Shack(NYSE:SHAK), for example, which makes a concerted effort to stay ahead of the curve by paying above-average wages for the industry, cited labor costs as the primary factor pushing its restaurant-level operating margin down 280 basis points in its most recent quarter, and expects wage hikes to compress margins further this year.

Other chains likeChipotle(NYSE:CMG) that disproportionately rely on company-operated restaurants versus franchising have also complained about rising wages.

But restaurants aren't just feeling the pinch on the bottom line. Comparable sales have been down across the industry, and traffic fell every month in 2016. Many seem to be victims of the so-called restaurant recession, as a number of factors, including food deflation and a decline in retail traffic at malls and shopping centers, are pressuring restaurants' performance.

The cost of Flippy has not been disclosed, but prices for new technology tend to come down over time, while labor generally increases, especially in a tightening market like today's. It may not be this year, but eventually the economic case for restaurants to invest in machines like Flippy will be too strong to ignore. That will be good news for restaurant investors and consumers alike, but it also means another industry's workforce now has reason to fear the robots.

Jeremy Bowman owns shares of Chipotle Mexican Grill and Shake Shack. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. The Motley Fool is short Shake Shack. The Motley Fool has a disclosure policy.

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Why Automation Could Soon Be Coming to a Restaurant Near You - Motley Fool

The path of automation is not sci-fi, but with us right now, so the debate about how we will manage it is crucial. Photograph: Athit Perawongmetha/Reuters

One of the more striking things about economic debate in this country is that there is a broad call for more reform and yet an equally narrow view of what such reform should constitute.

Economic reform is often synonymous with reducing labour costs and increasing after-tax profit, because much of the debate is generated by those whose view of the world and position in life is benefitted by such outcomes. But many of these styles of reform are most suited to an economy that might be passing us by one where output is greatly disconnected from employment.

While watching the latest X-Men movie, Logan, one scene that particularly stood out for me was when the characters drove along a highway featuring driverless trucksThe trucks have no cabins and are essentially just containers on wheels. It was a particularly soulless vision of the future, in which there was not only automation but where the suggestion that humans had any control of say steering wheels or windscreen wipers, was absent too.

The path of automation is of course not sci-fi, but with us right now. And while there is the hope that, as with the industrial revolution, new technology will create many new jobs, the current path appears to be to making jobs redundant and creating new work that is also able to be automated.

This new economy should be a more productive one after all, there is no need to automate if humans are able to produce the same level of output in the same time for the same cost. But as manufacturing workers around the world have discovered, greater productivity does not mean greater hours of work.

So automation might be a future with more output but fewer jobs.

So what to do? And what good is cutting penalty rates to lower costs for people working in takeaway shops when a robot is able to cook and wrap a burger (along with any other job that was once considered safe from automation because it was seen as a service)?

One response put forward by the Greens leader Richard di Natale this week was to reduce the amount of work that people did and shift to a four-day work week.

Sometimes an idea is worth considering because the initial reaction is to shake your head and assume that couldnt work. So it is with the four-day week.

Di Natales proposal (and even he admits it is more about starting a discussion than anything concrete) would see people either go from an eight-hour day, five days a week to a 10-hour a day, four day a week job, or to reduce hours across the five days.

The shift to a 10-four working week is not actually all that radical. It was pursued in Utah for state employees from 2008 to 2011. Generally satisfaction among workers was high and, while offices were closed on Fridays, they were open longer on other days.

The results were mixed not much difference in productivity, some were marginally better, some the same, some services saw improved wait times, but it was less successful for those agencies that had to deal with federal authorities who expected them to be open on Fridays.

That such a change in hours however did not result in massive disruption and enabled government services to continue to operate successfully says a bit about how such ideas might seem on first blush to be impossible, but actually are quite doable.

But the more radical switch is to actually reduce the hours in the working week either a five days week with six hours or a four days week of eight hours.

While there is evidence of individual firms going down that route and being successful, its a great deal different to shift to it being standard for all workers.

But then the 40-hour week is not some pre-ordained amount of time that we must work.

The idea is that if we work fewer hours then there is greater opportunity for more people to work. But you can see the difficulties people might wish their unemployed neighbour to have a job, but how many would give up hours to ensure they can?

John Maynard Keynes was suggesting working fewer hours in 1930 because of increases in technology his grandchildren would only need to work 15 hours a week.

He argued that the course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed.

We dont of course work 15 hours a week, even though many of us could and enjoy a standard of living as good as the average person in 1930.

When given the option of working fewer hours with more leisure time and keeping the same standard of living, or working the same hours and improving our standard of living, we have mostly chosen the later.

And that in itself is not bad, but it works only if there is the option of working those hours.

But what if automation reduces national employment by 20%? What happens to those people who are left out? On the current welfare system we would see massive gaps in inequality and a pretty horrific change in the look of our society.

Economist Mike Konczal argues if we all worked 20% fewer hours (that is a four-day week), combined with a universal basic income, the massive cut in employment need not occur, and neither would the huge increase in inequality.

That sure is radical, and of course comes with the question of cost. But I always get a bit bemused when I hear talk of the productivity wonders of automation combined with talk that we need to reduce the taxation of the profits derived from that process.

We know an automated world is coming. The problem with much of the economic debate in this country is that it is conducted by those who are currently free of pressures of that process.

No one is really arguing the shift to a four-day week needs to happen right now. But as we have seen with energy policy and with climate change, there is not much good knowing things are coming and not only doing nothing, but not even considering doing anything.

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An automated world is coming and managing the unemployment fallout won't be easy - The Guardian

Federal officials were warned over the summer that machines are going to replace more jobs in the workforce in the coming years and that will require a rethink of how government helps the unemployed.

Documents prepared for top officials at Employment and Social Development Canada don't hint at how federal policy will have to adapt to increased automation in the workforce, noting that predicting the future is a risky proposition.

Experts say what's missing from the documents is any hint of concern that the rise of the machines is an immediate concern that the government must quickly address.

An interactive tablet for an intelligent building. The display shows household consumption of energy, water usage and green energy production. Automation will eliminate between 1.5 million and 7.5 million Canadian jobs in the coming years, the federal government has been told. (Maxiphoto via Getty Images)

"Many of the trends that may concern us about technology and automation in terms of what their impacts could be on workers are already happening and that's, I think, the missing piece here,'' said Sunil Johal, policy director with the Mowat Centre at the University of Toronto.

"People are projecting this into, well, in 10 years we may be in a difficult situation. The reality is many Canadians are already ill-served by government policies when it comes to skills training, when it comes to employment insurance, when it comes to the broader suite of public services to support Canadians.''

Depending on the methodology used, the Canadian economy could lose between 1.5 million and 7.5 million jobs in the coming years due to automation.

The jobs at the most risk are those that require repetitive activities like an automotive assembly line, although even some high-skilled workers, such as financial advisers, are already being replaced by software programs. The documents also note that journalists could see themselves increasingly replaced by robots.

One industry source, who spoke on condition of anonymity in order to discuss private conversations, said senior government officials acknowledge automation is something they have to deal with, but likely not for decades. The source said that senior officials believe new jobs will be created to keep people working.

The documents say new jobs will be created because that's just the way the economy works: As technology kills jobs, it also creates new ones. The issue, the documents say, is that no one knows if enough jobs will be created to replace those lost, nor if they will all be as well-paid.

"Predicting the future brings significant risk,'' reads part of a presentation released to The Canadian Press under the Access to Information Act.

"We cannot know what future jobs will be created or whether enough of them will be created to offset displaced workers or whether automation will offset the pressures arising from slowing labour force growth.''

The rest of the slide has been blacked out because it contains sensitive advice on future policy paths.

Labour Minister Patty Hajdu said the government is looking to find a way to help sectors who are short of workers, and guide people into emerging fields. (Photo: The Canadian Press/Patrick Doyle)

The Liberals are telegraphing that they will make skills training services a focus of Wednesday's budget. Once the budget puts a dollar figure on the federal contribution to training, negotiations with provinces and territories on the main funding vehicle for the cash the labour market development agreements can be finalized.

In a paper he co-wrote last year, Johal argued that the government also needs to look at expanding access to existing training programs, create targeted programs and labour market protections like minimum wage rules for independent contractors and look at introducing emergency lines of credit for people who need a short-term financial boost.

Labour Minister Patty Hajdu said the government is looking to find a way to help sectors who are short of workers, and guide people into emerging fields.

"Successful economies and countries are ones that can be adaptive and that's why skills development is so important,'' Hajdu said in an interview.

"I'm excited about being able to do that work and help people gain those skills for the shortages that we have in specific sectors and to help support that innovation agenda that really is about fostering creativity and being thoughtful and deliberate about what skills we're training people for.''

With files from Andy Blatchford

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Automation Will Take Millions Of Canadian Jobs, Ottawa Warned - Huffington Post Canada

Automation still conjures up robotic bosses and impersonal workplaces. Its becoming clearer that it is much more complex than that, especially as the Internet of Things comes to the forefront. Blue Prism co-founder and CTO David Moss explains why automation will be a boon to our businesses and our job opportunities.

The Enterprisers Project (TEP): What is the first step in identifying a process for automation?

David Moss: For most businesses, the work best suited for automation are the back-office clerical tasks that are tedious, rules-based, often manual, and repetitive in nature. These are swivel chair processes, and are susceptible to human error that stands in the way of efficient, effective delivery of products and services. More importantly, employees in these roles can be freed up to contribute higher value work to the organization.

The first step of any automation project is to ensure that both IT and business operations are invested and involved in it from the start, and that they work together to create a strategy and plan for the ongoing automation program. Too often, organizations start with a flurry of automation activity only to later discover discrepancies between what the business needs and what degree of governance IT requires, leading to the two sides becoming misaligned. Mission-critical operations in highly regulated industries require IT to ensure that all solutions comply with strict security, governance, and resilience criteria. Working together at the outset to identify a pipeline of processes and build a great business case, along with agreeing upon the governance platform, will underwrite a much more successful project with longevity and resilience built in.

TEP: How does automation blend with the public concern of "bringing back jobs?"

Moss: While many people believe automation eliminates jobs, in my experience, its simply not the case. Rather than remove resources, automation reallocates them putting human and technological capital to its best use within the organization. By automating the repetitive, mundane work, employees have more time to do the strategic, creative, and customer-facing work that theyre better suited for.

In the end, if companies are using automation strategically, employees should benefit.

Since the Industrial Revolution, weve discovered and invented ways to make our work faster, less intensive, safer and, ideally, more enjoyable. Enterprise automation and the optimization of process work via technologies like artificial intelligence and robotic process automation (RPA) is just the latest phase in this evolution. In the end, if companies are using automation strategically, employees should benefit. This means using automation tools to automate very repetitive and boring work, increasing productivity, customer service, and quality and freeing up the time for internal staff to work on tasks that are more varied, complex, and interesting. Rather than eliminating jobs, automation transforms them.

TEP: What is the smartest advice for building teams of IT and business leaders for automation projects?

Moss: The best advice I could offer organizations launching an automation project is to understand both the business and cultural imperatives required to be successful. Of course, this begins with the understanding that business operations and IT must be working together, but more broadly, it should be the commonly held belief that automation is not a silver bullet. It will require significant time and effort invested by both sides, so early buy-in is key if the desired outcome is organization-wide transformation.

It will be the responsibility of senior leaders to understand, educate, and engage both their human and robotic workforces to work together to achieve business success.

One way to do this is by developing an automation strategy that sets the direction for the entire project aligning expectations and tying back to a single common vision. Agreeing and collaborating on a few priority deployments at the outset can help alleviate these issuesand work towards developing a project roadmap that will carry the organization from current state to desired outcome with a smooth transition.

TEP: How do you create workforce competencies so automation, once in place, can be managed properly?

Moss: The key to properly managing automation is to make sure youve established strong standards and best practices. You can use the first batch of automated processes to establish that ideal methodology, and leverage it as a foundation for subsequent process deliveries. Establishing a tailored, centralized model that aligns with the organizations business goals and structure will ensure that the automation program meets its ROI goals. By this point, the organization will have a number of people with experience training and managing the digital workforce, creating an internal center of excellence that can help ensure quality across the board and apply automation in new, innovative ways throughout the organization.

TEP: In five years, what will be the relationship between automation and the workforce?

Moss: Automation is redefining the way we live and work. Organizations of all sizes and scopes are making it a critical part of their business strategies, and I dont see that slowing down. The evolution of automation technologies and humans roles in theworkplace will take place in tandem. It will be the responsibility of senior leaders to understand, educate, and engage both their human and robotic workforces to work together to achieve business success.

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How to use automation strategically so that employees benefit - The Enterprisers Project

When the House Energy and Commerce Committees subcommittee on Digital Commerce and Consumer Protection held a Valentines Day hearing on the introduction of self-driving cars, it was all love for the wondrous new innovation soon to hit roadways and the automation revolution just over the horizon.

From the Internet of Things and health apps, to drones and robotics, and the revolutionary capabilities of 3-D printing, many of these technologies are transforming commerce and creating new opportunities for economic prosperity in America for generations to come, said subcommittee Chair Rep. Greg Walden (R-OH) in an opening statement. Without question, one of the most exciting developments in 21st century commerce is self-driving cars.

But during that two-hour hearing, which displayed an impressive line-up of automobile executives from General Motors, Volvo and Toyota along with experts from companies like Lyft and RAND, there was no conversation on what would happen to the millions of Americans who drive cars for a living.

The focus centered primarily on the safe application of autonomous vehicles, ensuring that the vehicles could be safely deployed alongside conventional cars driven by humans. And, hoping to introduce new technology that could prevent the estimated 45,000 fatalities a year resulting from automobile accidents, policymakers in Washington have made public safety a priority when discussing new developments in the innovation space.

Still, a growing chorus of technology experts, thought leaders and elected officials are expressing concern that Silicon Valley is not considering the broader and potentially devastating socio-economic consequences of automation. In the case of autonomous vehicles, a study recently released by the Center for Global Policy Solutions found that more than 4.1 million driving occupation jobs would be lost if the technology were rapidly introduced in to the marketplace.

Its a first-of-its-kind study to break down by race, gender and state how an autonomous (or robotic, AI-driven) technology could severely undermine workers in the United States.

And while, numerically, 62 percent of the driving workforce is white, Black and brown workers in driving occupations would be disproportionately hit, particularly those without college degrees who look to driving jobs as relatively reliable high-wage earning jobs. The economic ripple effect of automation and artificial intelligence technologies such as driverless cars would be heavily felt throughout many Black communities, particularly in Southern and Rust Belt states with large Black population centers.

According to the study, nearly 700,000 Black driving workers would lose their jobs during the rapid introduction of self-driving cars.

While only 2.66 percent of white workers nationally are in driving occupations, particularly in truck driving, 4.23 percent of Black workers are in driving occupations compared to the national average of 2.85 percent. Mississippi, with Black residents accounting for nearly 40 percent of the overall state population, is the state with the highest proportion of driving workers in the nation. Other large Black populations states, such as Pennsylvania, Georgia, New York, Illinois, Louisiana and Alabama, are identified by the Center for Global Policy Solutions study as places where the job loss resulting from the introduction of driverless cars would be hardest felt.

Automation is happening very fast and, unfortunately, its happening at a time when Republicans in Congress and a Republican president are gutting social safety net programs, Dr. Maya Rockeymoore, President and CEO of Global Policy Solutions, tells the Tribune.

The fact that there was a Capitol Hill hearing devoted to a discussion on autonomous vehicles and the subject of worker displacement didnt come up says members [in charge of that Committee] are in line with the industries rolling this technology out, says Rockeymoore.

Committee staff, however, pointed out that they were examining how autonomous and AI-driven technologies could spur job growth through a string of Disruptor Series hearings. But when asked by the Tribune whether there would be a closer look into the worker displacement raised by the CGPS study, Committee aides suggested the House Education and Workforce Committee would have jurisdiction over the topic.

For the most part, subcommittee chair Walden is focused on the public safety aspects of self-driving car rollout. Early reports estimate that over 40,000 Americans died in traffic-related accidents last year, which is a 6 percent increase in fatalities reported from the previous year. With this number on the rise, one of our primary responsibilities as a subcommittee is to continue looking for ways that we can protect consumers and their families while traveling on the nations roads, Walden responded in an email to the Tribune.

Without question, the most beneficial aspect of self-driving cars is the increased safety potential they can provide to the driving public. We will continue to engage with all interested parties in this industry and examine its impact on jobs and the economy so that we can ensure we are maximizing our nations potential for job growth.

It remains unclear if policymakers on Capitol Hill will have a conversation on the economic ramifications of the technology once its introduced. Many lawmakers assume that displaced workers will be able to simply transition into new sectors of the economy. Yet, an oft-cited 2013 Oxford University study claims that automation, robotic and AI technologies will decimated 47 percent of the U.S. workforce by 2040.

Researchers argue that educational institutions are ill-equipped to quickly meet the challenges brought on by automation. There are actually more policy discussions about this issue in Silicon Valley among non-policy people than there are on Capitol Hill, said Rockeymoore.

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Lawmakers not ready for talks on job losses from automation - The Philadelphia Tribune

Automation Boom

Dismissing vague warnings that robots are coming for our jobs is pretty easy. Not so easy? Dismissing hard evidence that theyve already arrived and are doing those jobs better and more cheaply than we ever could.

Those are the facts the workers of the world faced when news broke earlier this year that a Chinese factory increased its production by 250 percent and dropped its defect rate by 80 percent by replacing 90 percent of its human workforce with automated machines. In fact, the transition to machines has been so successful, the plant may soon cut its remaining workforcefrom 60 to just 20 human workers.

Experts are predicting that up to 47 percent of jobs in the United States may be replaced by automated systemsand thats all in the next decade. If thats not enough, manufacturing jobs arent the only ones at risk. Automated systems are proving that they are capable of handling everything from low-skill work like

If thats not enough, manufacturing jobs arent the only ones at risk. Automated systems are proving that they are capable of handling everything from low-skill work like flipping burgers and driving taxis to white-collar professions like managing hedge fundsandpreparing tax returns.

Researcher after researcherhas concluded the same thing automation is going to put a lot of people out of work very soon but what people cant agree on is what we should do about it.

Some, like President Barack Obama, recommend focusing on education and training to prepare people to take on new types of jobs once their jobs are replaced. Others recommend putting systems in place that would make having a job a guarantee.

Still others think a tax on robots could be the solution. Perhaps the most seriously discussed option, however, is universal basic income (UBI).

So what exactly is it?

The idea behind a UBI system is that every member of a society regularly receives a set amount of unconditional money from the government or a public institution. How much money, how often it is given, who supplies it, and other variables are all open to interpretation.

Proponents of such a system say its benefits would be multifold. With so many people expected to lose their jobs in the coming decades, UBI would be a way for the government of a country to ensure it doesnt see a drastic increase in poverty due to unemployment. They point to the encouraging results of past studies in their support of UBI, noting how some trials have revealeda link between UBI and better health, while others have noted a drop in the usage of temptation goods like alcohol and tobacco in societies with a UBI in place, particularly if those societies are in underdeveloped nations.

While notable figures such as Tesla CEO Elon Musk, Y Combinator president Sam Altman, andeBayfounder Pierre Omidyar have all expressed their support for UBI, just as many people remain on the other side of the debate.

Business mogul Mark Cubansimply called UBI one of the worst possible responses to automation,philanthropist Bill Gatessaid even the richest countries couldnt afford such a system, and the Obama administrationreleased a report stating that job training and job search assistance are much more likely to mitigate the potential unemployment situation than UBI. Others argue that UBI would discourage people from working, wouldnt be enough to lift them out of poverty, and would result inimmigration problems for countries that enact such systems.

Until recently, weve had very few examples of UBI systems to look to for definitive proof of their potential benefits or burdens. Those examples we did have involved smaller groups of people for relatively short durations of time. What we need to move forward are more extensive trials involving larger groups, and thankfully,thats what were finally getting.

This year,Finlandkicked of a two-year UBI trial in which 2,000 randomly selected citizens each receive the equivalent of $587 a month. Each participant wasalready receiving unemployment benefits or an income subsidy from the government that they would lose if they started earning outside income. The hope is that the UBI will encourage those people to take chances on potentially risky job offers, like those at tech startups, knowing theyll still have an income to fall back on.

Once the two-year trial is over, the government plans to compare the data it collects from the 2,000 participants and173,000 non-participants from a similar background to determine if a larger UBI system would be economically worthwhile.

GiveDirectlyis poised to launch the largest UBI program to date this spring. With the support of investorslike Omidyar, the nonprofit will provide UBI to more than26,000 Kenyans, with the total amount dispersed expected to hit around$30 million. The company is spreading the money across200 villages, with recipients grouped into one of three potential systems. Some will receive 12 years of basic income, some will receive two years of it, and others will receive two years worth of income as a single lump sum.

Kenyans in 100 villages will act as the control group against which the results of the trial will be judged. GiveDirectly is hoping to learn a great deal about UBI from the study,including how it affects a persons economic status, willingness to take risks, and their gender relations, particularly in terms of female empowerment.

Canada has its own UBI project set to launch this year. In December, the state legislature of Prince Edward Island (PEI) approved an initiative to test out a UBI program, with leaders of all four political parties in the province approving the measure. The details still need to be hashed out and the plan implemented, but with150,000 citizens, the small Canadian province could prove to be the perfect setting for a UBI pilot program large enough to provide a validsample size but small enough to be logistically feasible.

With so many projects in place, 2017 is being touted as the year well finally find out if a UBI system could work, and really, we have no time to waste. That Chinese factory may have been one of the first, but it certainly wont be the last example of automations superiority in the workplace.

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Experts Think UBI Is the Solution to Automation. This Year, We'll ... - Futurism