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Long Term Solutions | News For The Workers Comp Industry

Robots are real, though they do not yet “walk amongst us,” that is likely coming more rapidly than many might think. see The Running Man (July 2015). Oh peruse Robotics and Innovation (September 2016)) or Nero May be Fiddling (April 2017) or the New Paradigm Coming (March 2016). In short, artificial intelligence and robotics have been accelerating in ability, acceptance, and reliability.

Robotics has come a long way and is integrating into our day-to-day. And its partner artificial intelligence is right there with it. Together, they are providing machines can in fact replace employees.

That foundation existed when the SARS-CoV-2 arrived in America in March 2020 (arguably earlier). But as the world of work pivoted, and the age of remote work, Zoom, and virtuality came into vogue, offices emptied, technology prospered, and the world changes. We witnessed cadres of workers reluctant to return to the previous work world, and some refused to return at all. See The Great Resignation (October 2021) and Evolving Work Challenges (January 2022).

The world’s evolution is not new. The pandemic is not the sole contributor to where we are today. However, the advent of technology and COVID-19 are a strange combination that is impacting us all. The changes being made today in response to present labor challenges will impact us, and the effects are likely to be long-term.

In a period of short-term challenges, some people elect to make long-term life changes. When stress or emotions are running high, it is perhaps not the best time to make changes that are difficult to undo or to even remedy. However, it appears that American business is making some fundamental changes in response to the challenges of finding workers. Business Insider reported recently that Robot orders increase 40% in first quarter 2022 as desperate employers seek relief from labor shortages.

A store I frequently has evolved from a “self-checkout” where each item is scanned and bagged. In this new paradigm. One now merely places items onto a platform, without any thought of where those bar codes are or what direction they are facing, and the sale is calculated. The machine takes cards, cash, and even allows a customer to log in for “loyalty.” And, from my experience is doing so more rapidly than the competing employee down the counter – by a lot.

The machine does not work by bar codes. That great innovation of the last century is not driving this next innovation. According to Forbes, this check out is run by artificial intelligence, and the machine is “looking” at the items you wish to purchase. You put them all on the platform simultaneously and the machine values ‚Äč‚Äčthem all at one time based on their appearance. To build the algorithm, the company visited a convenience store and

“took 20 to 40 pictures of every single item in the store,” says Jack Hogan, senior vice president at Mashgin about how they initially built a database of 20,0000 images to train their algorithm”

It is admittedly quite convenient, and frankly a little hard to believe. But, in reality it has reduced the staffing where I purchase gasoline from 1-2 people per shift.

This has brought relief to businesses as they strive to return to the seemingly halcyon days of 2019. Just three short years ago, the economy was demonstrating solid domestic production (GDP), though there were those who lamented the growth was only 2.3%, that compares to growth of 1.4% in 2022. Before lamenting the challenge of less growth, we must consider that some believe a recession is in the offing (“a fall in GDP in two successive quarters”). However, as Reuters notes, that definition may have “plenty of caveats.”
Inflation was around two percent for the four years 2017-2020. Then 2022 brought us a “four-decade high,” and inflation is challenging many families. Economic realities are swirling about us and it is noticeable at the grocery store, the gas station, and more. And, there are “Help Wanted” signs at every turn. As business struggles to remain productive, and to grow, there is not enough labor, despite increasing pay, benefits, and other options. In fact, “In March, US job openings reached a record high of 11.5 million.” So, it appears, labor is not returning to the workplace as yet. Prices are increasing, inflation is thriving, and we all likely face challenges.
The Insider article says that “the robot industry is now valued at $1.6 billion.” That seems low. It is growing and “certainly not a new phenomenon.” See Tech is Changing Work (November 2018). The Insider notes that “people want to remove labor.” But, some see this drive to “remove labor” as troubling. They perceive that it is a long-term commitment to an alternative that will be unyielding and unforgiving in the event that labor eventually elects to return to the marketplace. The businesses are unlikely to “lay off” their expensive robots at that point.

They will have committed to the robotic and AI path, invested their capital there, and will find it expensive to diminish their reliance. However, some will remember the “automat” of yesteryear, and its shiny, efficient promise of a new age. Those vending ventures evolved back into restaurants with servers. Those capital investments did in fact find their way to the scrap heap. Thus, retrograde is certainly possible, but one must wonder today whether that will be practical given the broader scale of this time of automation.

When word processors entered the marketplace of the 1970s, companies elected to engage that technology. However, there was reluctance due to cost per unit. As it evolved and improved, those businesses realized that one employee with a word processor or then personal computer could do the work of several using even the most sophisticated of typewriter. Over the course of years, those machines entered the workspace slowly. It is one example, but technology has been repeatedly a business evolution that empowered humans, increased productivity, and over time reduced and eliminated work force of specific occupations. The “typing pool” of hundreds of hands simultaneously processing documents became extinct. But, through evolution not revolution.

The Insider article cites economists who see automation as a destroyer of jobs. They lament that the withdrawal of the workforce is temporary and that the response of automation is more permanent. Should business make long-term changes based upon behaviors that are short-term? Is there any potential for technology to harm a business, or is the reliance upon technology a winning course regardless of the presence or prevalence of available labor?

Will there be some math that allows government to support volumes of people who are not working, or at least not working at their capacity? See Universal Income (November 2016) and Let them Eat Brioche (September 2018). As the pandemic spread, and the money flowed, perhaps there was some degree of Universal Income, though the $5 trillion ($5,000,000,000,000) was not distributed universally by any means. The New York Times details where it went. That money entered the economy, and it was spent. Dollars chased commodity and products, and incredibly (or perhaps predictably) prices increase.

I spoke with a clerk at that gas station with the new AI checkout. Specifically, I asked if there is any fear of being replaced. The reply? “There is plenty of other work, so who cares.” I did not delve into whether that comfort is in more work elsewhere in that store (stocking, cleaning, etc.) or in the broader marketplace (everyone has help wanted signs up). But, either of those may themselves see the impact of these long-term robotic solutions. As technology permeates, the help wanted may conversely diminish. And where will the worker be? Who will have any funds with which to make a purchase?

The government debt has soared, suggesting that even the US budget cannot expend without end. Some estimate that debt has at time reached close to 140% of the gross domestic product. In the new age of automation, when the workers have been replaced by the robots, how will people earn a living? How will they find a living, and will there be any way for the largesse of government to continue? Who will pay taxes and fund the government, and its programs and distributions? These are interesting questions, and certainly time will tell.

I frequently drive past a business that has a large sign proclaiming it is “veteran owned.” I suspect that there is an appeal there, and the business is frequented by those who are eager to support our veterans. Will the day come when similar signs proclaim “humans work here?” As the tech changes the workforce, what of workers’ compensation generally? As the work that remains becomes relegated to fixing the machines, what of the working person? In that paradigm, without risks like lifting and carrying, will the severity and frequency of work injury consistently decline? As we compete increasingly in a world market, how will US business eschewing robotics and AI compete? Certainly, time will tell.

By Judge David Langham

Courtesy of Florida Workers’ Comp

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