According to a recent posting in the New York Times, U.S. companies are spending 10 times more on technology than on employees. In fact, author Catherine Rampell notes, since the start of the recovery in June 2009, "spending on equipment and software has risen 25.6 percent, while companies' aggregate spending on employees has risen only 2.2 percent."
Why? The obvious reason is the high labor costs in the United States, notably caused by rising health care, in addition to salaries and other benefits. Whether in a union shop or not, these numbers continue to rise at a high rate, while at the same time the cost of technology continues to trend downward, becoming more affordable.
Unfortunately or fortunately, depending on which side of the issue you are on, this trend is not exclusive to the United States. I recently saw this firsthand during a recent technology tour to China. Notorious for being a low-cost labor country, even the plants visited in China boasted an increased usage of high-tech machines in the plant in order to supplement labor issues, including rising wage rates, while having the added benefit of improving their quality and speed to market.
While machines should not — and could not — completely replace the need for employees in the shop, I am an advocate of making technology affordable for plants of all sizes. And I'm not alone. Apparent at the recent AWFS Fair was a number of companies that showed computerized material handling systems designed for smaller nested-based routers, new programming options on panel saws to improve their flexibility, and even an increase in "rent to own" software and systems.
But despite all the issues, it's still not a case of man vs. machine. We will always need a skilled workforce to run the machines and ensure that the North American woodworking industry remains a high-quality, profitable and competitive venture.
Read more of Karen's blogs.
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