One of the largest American labor movements in recent history may have been caused by the number of American workers who quit their jobs during the Pandemic. Workers demanded higher pay and better conditions, spurred by rising inflation and the realization that employers expected them to risk their lives for low wages, mediocre benefits, and few protections from abusive customers. Automation has become cheaper and smarter. In 2021, robot adoption hit a record high. This wasn't a surprise, given previous trends in robotics, but it was likely accelerated by worker shortages and Covid-19 safety requirements. Will robots automate away the jobs of people who don't want to work, or will this technology improve workers' jobs and help firms attract more enthusiastic employees?
When a factory installs a new robot or a cashier aisle is replaced by a self-checkout booth, the answer depends on more than what is technologically feasible. The gains from automation have proved to be very different. American productivity grew by 400 percent from 1930 to 2000 because workers were replaced with technology, while average leisure time only increased by 3 percent, according to Carl Benedikt Frey. American labor productivity, or dollars created per worker, has increased eight times faster than hourly compensation. During this time, technological luxuries became necessities and new types of jobs flourished, while the unions that used to ensure livable wages dissolved and less educated workers fell further behind those with high school and college degrees. America had a 1.3 percent gap between productivity growth and median wage growth, but Germany had a 0.2 percent gap.
Whether America can distribute the technological benefits or not will continue to increase technology adoption. How much control do we have over automation? How much control is given to national or regional policies and how much power is given to individual firms and workers? Is it a foregone conclusion that machines and artificial intelligence will take all of our jobs? If we can only figure out how to wield this power, we may have influence over how machines are used in our factories and offices.
Between 1993 and 2009, 8 percent of German manufacturing workers left their jobs, while 34 percent of US manufacturing workers left their jobs. According to The Conference Board, the average German manufacturing worker earned $43.18 per hour in 2016 while the average American manufacturing worker earned $39 per hour. Americans with comparable education earned an average of 14.55 per hour, while Germans with a medium-skill certificate earned $24.31 per hour. There are differences between American and German approaches to manufacturing workers and automation.
In a town on the outskirts of the Black Forest in Germany, there is a 220-person factory that has been a leader in safety-critical manufacturing for decades. There is a warehouse next to a few acres of golden mustard flowers. The senior factory manager informed us that his workers were at the Future Work Lab when I visited with my colleagues from the MIT Interactive Robotics Group. Teenagers still enter the firm as apprentices in metal fabrication through Germany's dual work-study system, and wages are high enough that most young people expected to stay at the factory and move up the ranks until retirement, earning a respectable living along the way. Smaller German manufacturers can get government subsidies to send their workers back to school to learn new skills that will help them make more money. The manager worked with a nearby technical university to develop advanced welding certifications, and he was proud to rely on his welding family for support with new technology and training.
Our research team visited a factory in Ohio that makes metal products for the automotive industry, which is not far from the empty warehouses and shuttered office buildings of downtown. The grandson of the firm's founder complained about losing his unskilled, minimum- wage technicians to any nearby job willing to offer a better salary. He resigned himself to finding unskilled workers who could hopefully be trained to work on the job after giving up on finding workers with the relevant training. In 2009, one automotive supplier outsourcing its metal fabrication to China forced the Ohio firm to shrink down to a third of its prior workforce.
The Ohio factory made commodity components and sold them to powerful automotive firms. The highly specialized German firm had few foreign or domestic competitors forcing it to shrink its skilled workforce or lower wages, while the Ohio firm had to compete with low-wage, bulk producers in China.
Some of the workers in the two factories have been replaced by welding robots. The German firm's first robot was a collaborative welding arm that was designed to be operated by workers with welding expertise, rather than professional robot programmers. The training of welders to operate the robot isn't a problem in Germany, where everyone who arrives as a new welder has at least two years of education and hands-on apprenticeship in welding, metal fabrication, and 3D modeling. Several of the firm's welders were trained to operate the robot. The German firm manager was happy to save labor costs, but his main reason for buying a robot was to improve workers health and safety, so he could continue to attract skilled young workers. A German factory we visited recently acquired a robot to tend a machine during the night shift so fewer workers would have to work overtime or come in at night.
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