The labor crunch is helping to feed the rise of the robots: Morning Brief – Yahoo Finance

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Tuesday, November 16, 2021

Last week, two separate but related labor market themes caught my attention.

After Thursdays news that employees walking off the job hit yet another record in September, a report from Reuters showed that North American companies added a record number of robots this year to bolster assembly lines, in a bid to alleviate the well-chronicled labor crunch (a hat tip on this article goes to economic commentator James Pethokoukis, who runs one of my favorite reads on the global economy).

Citing data from the Association for Advancing Automation, Reuters pointed out that industrial firms rang up nearly $1.5 billion worth of robots (29,000 to be exact) a whopping 37% more than the comparable period in 2020. Separately, Google Cloud research in June showed that two-thirds of manufacturers using artificial intelligence (AI) are relying more heavily on it.

The Morning Brief has ruminated about the impact of the labor shortage and its close blood relative, the Great Resignation. Connecting the seemingly disparate threads, it poses a burning question: Are workers reluctant to fill open jobs or stay put in them, for that matter sowing the seeds of humanitys eventual demise in the labor force?

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However irrational, the theme that human workers should fear the dawn of our robot overlords is hardly a novel one. Yet like everything else in the pandemic-era, the fallout from COVID-19 has poured accelerant on an already raging fire. With conditions worsening, we cannot help but wonder if workers are hastening the rise of automation in a way that displaces human labor but in a more permanent way?

Earlier this year, Yahoo Finances Dani Romero reported how stressed out restaurants, which have raised pay to little avail, are leaning on technology to meet heavy demand, and fill the gaps left by a shortage of employees.

By all indications, its becoming increasingly apparent that the worker shortage is hastening the rise of robotics and advanced technology to address demand that has mostly defied a slowing economy and the dramatic supply crunch.

In an appearance on Yahoo Finance Live last week, Brooklyn Dumpling Shop founder Stratis Morfogen waxed eloquent about his establishments use of self-ordering kiosks, powered by a smartphone app that lets the consumer grab and go in a creation he calls the Automat.

The centerpiece of the Automat is a contraption Morfogen described to The New Yorker as The Monster. The founder likened it to the conveyor belt that once bedeviled Lucille Ball in a classic episode of I Love Lucy.

For those who havent read, The Monster is a machine that can crank out tens of thousands of gourmet dumplings... in an HOUR. Chances are the machine wont demand time off, ask for a raise or be reluctant about getting vaccinated.

In fact, Morfogen is expanding the format to drive thrus, where tricked-out order technology will allow clients to come in and out of our drive-thru [while] having zero communication with our staff. Itll all be remote control, phone operated and with QR codes, Morfogen told Yahoo Finance.

COVID exposed a lot of [the restaurant industry]... we didnt even have an online platform for ordering, we didnt even have a social media presence, and I think hospitality learned their lesson, we have to embrace technology to make a model here, the entrepreneur said.

If we can get our payroll down to 15-20% instead of the industry normal of 32%, were not just saving one restaurant... were really changing the game on the industry for making it a more efficient model, Morfogen added.

Along with previously stagnant wages, the idea that robots are coming for all of our jobs has been a major labor market theme for at least a decade and is at least one reason behind why people found that viral video of a Boston Dynamics robot so frightening.

None of this obviates the need to pay workers fair wages, or treat them better. And theres only so much a robot can do, given that theres simply no equivalent for uniquely human qualities like empathy and situational judgment.

However, the longer workers quit, hold out, or put upward pressure on wages in ways that arent sustainable, the more we can expect employer desperation to grow in the face of resilient demand. And the more we can expect to see unsettling headlines about how the robot revolution think Amazons recently-announced Alexa-powered automaton, Astro is upon us.

You heard it here first.

By Javier E. David, editor at Yahoo Finance. Follow him at @Teflongeek

Economy

8:30 a.m. ET: Retail sales advance, month-over-month, Oct. (1.5% expected, 0.7% in Sept.)

8:30 a.m. ET: Retail sales excluding auto and gas, month-over-month, Oct. (0.7% expected, 0.7% in Sept.)

8:30 a.m. ET: Import price index, month-over-month, Oct. (1.0% expected, 0.4% in Sept.)

8:30 a.m. ET: Export price index, month-over-month, Oct. (1.0% expected, 0.1% in Sept.)

9:15 a.m. ET: Industrial Production, month-over-month, Oct. (0.9% expected, -1.3% in Sept.)

9:15 a.m. ET: Capacity Utilization, Oct. (75.9% expected, 75.2% in Sept.)

10:00 a.m. ET: NAHB Housing Market Index, Nov. (80 expected, 80 in Oct.)

Earnings

6:00 a.m. ET: Home Depot (HD) is expected to report adjusted earnings of $3.39 per share on revenue of $34.91 billion

7:00 a.m. ET: Walmart (WMT) is expected to report adjusted earnings of $1.40 per share on revenue of $135.69 billion

Politics

To keep selling his freshly signed Bipartisan Infrastructure Deal, President Joe Biden will travel to New Hampshire to visit a bridge on the states red list." The president is set to highlight how the $550 billion in new funding will go to projects like that bridge around the country.

On Capitol Hill, supply chain issues will be in focus with a hearing in the House Committee on Energy and Commerce on the subject of clean energy at 10:30 a.m. ET. Small businesses will also be in focus at 10:00 a.m. ET, with testimony from Small Business Administration Administrator Isabella Casillas Guzman.

European markets subdued as UK unemployment rate falls to 4.3% [Yahoo Finance UK]

Tesla's Musk sells $930 million in shares to cover stock option tax [Reuters]

Biden, Xi try to tamp down tension in long virtual meeting [AP]

Buffett's Berkshire cuts stakes in U.S. drugmakers, invests in drug royalty company [Reuters]

Transportation Secretary Pete Buttigieg on supply chains: 'There will be disruptions'

Richmond Fed's Barkin: Need a 'few more months' to evaluate inflationary pressures

Airlines prepare for the holiday travel crunch

Read the latest financial and business news from Yahoo Finance

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The labor crunch is helping to feed the rise of the robots: Morning Brief - Yahoo Finance