A growing trend in across all industry segments, in the wood products market we see more and more robots being used in plants for material handling and even basic construction applications: Custom Cupboards, Navy Island and Ro-Bois-Tic are just a few that come to mind.
Navy Island Robots in fact make it easier for U.S. companies to lower their overhead, including insurance rates, and maximize profits. Their capability to work 24/7 also help wood products companies keep competitive on the price of goods, especially in comparison with lower cost imports.
Which leads me to an interesting segment on 60 Minutes last night about the growing use of robotics in manufacturing and whether robots were taking jobs away from human employees. In fact, during the "March of the Machines" report by 60 Minutes' Steve Kroft, it was noted that a robot’s “wage earnings” could be roughly estimated at $3 an hour, putting it level with those earned by laborers in many Far East/Asian countries.
Included in the 60 Minutes segment was Kroft's interviews with MIT professors Andrew McAfee and Erik Brynjolfsson; while robots may be "revolutionizing" U.S. manufacturing, they are having a negative effect on job creation. In the interview, Brynjolfsson notes, "Technology is always creating jobs. It's always destroying jobs. But right now the pace is accelerating. So as a consequence, we are not creating jobs at the same pace that we need to."
You also have to wonder about the impact this may be having on labor’s share of income in the workplace.
click image to zoomAndrew McAfee/FREDThe graph illustrates corporate profits compared to labor’s share of income. Labor shares continue to decline, while corporate profits are on an upward trend. McAfee's Jan. 9 blog, “Labor’s Lost Leverage,” also discusses that very point. Based on figures from the Federal Reserve Economic Data (FRED), McAfee has compiled a graph where the divergence between corporate profits and labor’s share of income has never been greater than it is today.
Saying he expects the two lines to continue diverging, McAfee adds, “I am the farthest thing from a Marxist that you’ll ever meet, but I’m also not willing to pretend any more that things will be just fine for American workers once demand comes back and companies get healthy again. Judging by their profits, American companies have never been in better shape. The same cannot be said for workers.”
What do you think?