President’s Letter: Does Automation = Job Destruction?

May 9, 2017 No Comments
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What?

by B Kyle

“The robot that takes your job should pay taxes,” says Bill Gates. In a February 2017 interview with Quartz, a digital news outlet on technology and the “new global economy,” Gates suggests a tax on automated machinery would “slow the incoming wave of worker displacement by keeping people competitive with their sub-human counterparts. It also would compensate for the massive loss in income tax revenues governments would see if everyone were out of work.”

Certainly for manufacturers, this reasoning runs absolutely counter to experience. Automation is less about displacing employees and more about continuing to drive productivity, efficiency, and accuracy in this New Normal. And, of course, the high cost of health care contributes to this equation as well. Robots don’t need a medical plan. Indeed, how do we consider such a tax without the unintended consequences of stifling innovation?

A PARADIGM SHIFT?
I’m thinking about the ongoing challenge within manufacturing to find qualified workers, particularly as it is juxtaposed against a Millennial generation looking to forge their own path, characterized by independence and an entrepreneurial spirit. Also I’m thinking about how we do business in my world, the commercial real estate environment. The Saint Paul Port Authority has fewer than 20 employees, and yet we develop hundreds of millions of dollars of real estate development projects. How do we do this? We hire out the expertise. We contract with consulting firms for our environmental, engineering, construction, sometimes our legal work. We focus on what we do best, contract with experts as needed, and keep our FTE count low.

Are manufacturers operating like this, in some fashion? Or is a paradigm shift possible here, whereby we look for expert consultants for certain specialties like product design, engineering, prototyping, logistics, HR? And contract with them on a project basis? We can bring in these Millennials with their energy and their new ideas while embracing their preference for “forging an independent path.” This could be a new definition of collaboration, an opportunity to capitalize on “what is” rather than grieving the change and being left behind. Just a thought …

UPDATE: A SEAT AT THE TABLE
The Youth Skills Training Program has been incorporated into both the House Job Growth and Energy Affordability Committee omnibus bill (HF 2209) and the Senate Job Growth and Economic Development Committee omnibus bill (SF 1937). While both bills contain the policy measures that will enable the program to move forward, only the Senate version provides funding for implementation of the program and pilot grants for school to start programs. The PIPELINE Project is also funded, so the business assistance they provide will be expanded and more grant funds will be available. Look for more updates from the MPMA’s Government Relations Committee.

IN THE ECONOMY
In a late March, special commentary by Wells Fargo’s Economics Group, the Midwestern States’ 2017 Economic Outlook remains sluggish. That said, the region’s unemployment rate remains relatively low at 4.6 percent.
The March 2017 Manufacturing ISM® Report On Business Purchasing Managers Index (PMI®) was at 57.2 percent, and 94th consecutive month of economic growth. February 2017 PMI® was 57.7 percent and January 2017 was at 56 percent. To put this in perspective, 2016 started with a PMI® of 48.2 percent.

See you in the trenches.  pm_endmarkgrn-e1320337194716


B. Kyle is the Vice President of Strategic Development at Saint Paul Port Authority. She can be reached at blk@sppa.com.

Copyright © 2017 Minnesota Precision Manufacturing Association. For permission to use or reprint this article please contact Nancy Huddleston, publications manager for Precision Manufacturing Journal.

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