Companies will opt for Robots

 

Companies will opt for Robots

Manufacturing output continues to improve, even though the number of manufacturing jobs in the U.S. continues to decline and this trend will not stop.  Jobs are not going overseas only, in fact, machines are replacing most jobs. As this trend is in the early phase, the momentum will continue to build in the years to come.

Machines are faster, cheaper and don’t complain; at least not yet. So from a cost cutting and efficiency perspective, there is no reason to stick with humans.  This, in turn, will continue to fuel the wage deflation trend. Sal Guatieri an Economist at the Bank of Montreal in a report titled   “Wage Against the Machine,” states that automation is responsible for weak wage growth.

“It’s unlikely that insecurities from the Great Recession are still weighing, given high levels of consumer confidence,” he wrote. “However, automation could be a longer-lasting influence on worker anxieties and wages. If so, wages could remain low for a while, restraining inflation and interest rates.”

Guatieri goes on to state that “The defining feature of a job at risk from automation is repetition”.  This puts a lot of jobs at risk, many of which fall under the so-called highly skilled category today; for example, Accountants, Lawyers, Radiologists, X-Ray technician, etc.

North American business order record number of robots

In 2016, they order 35,000 robots, 10% more than in 2015.  But that is nothing compared to China, which ordered 69,000 robots in 2016, South Korea ordered 38,000 and Japan for its small size ordered 35,000 robots.  This proves that jobs are not going overseas but are being taken over by machines. Nothing will stop this trend; a trend in motion is unstoppable.

The largest user of robots is the automotive sector; in North America, over 20,000 of the 35,000 robots went to the automotive sector. Once upon a time, over 80% of the work done in this sector was done by humans, but robots perform today over 80%.

The total amount spent on robots in 2015 was $71 billion; experts project that this amount will surge to almost $135 billion by 2019.  The trend continues to gain traction.  Amazons purchase of whole foods and Lidl’s entry into the US market has triggered a grocery war, and automation is going to be one of the main ways to remain competitive in this industry.  Amazon already has a massive robot workforce; they use over 45,000 robots.  Sales of robots will triple from current levels by 2019

 

Minimum wage hike ignores impact of AI

The number of robots sold in the US will jump by 300% over the next nine years, according to the ABI research. It’s simple math; more automation equates to fewer jobs. One industrial robot replaces about six jobs. For now, the automotive industry continues to lead the way, but as companies are pushed to become more competitive, we expect companies in every sector to embrace automation.

The Rise Of The Machines; the death of Jobs

 

Source: Robotics Industries Association

Costs are plunging

In 2010 the average cost of a robot was $150,000; today the price has dropped to below $25,000, a drop of over 80%.  As prices drop more companies will seek the efficiencies that come with using robots. A day is fast approaching where the price could drop below $5,000 suddenly making them affordable for almost any small sized business.

The death of Unions

Unions continue to push for higher minimum wages while the purchasing price of robots continues to decline; a deadly and probably fatal punch for the majority unions.  In the era, where raising prices is not an option, the only leeway most businesses have is to cut costs. The human factor is the most expensive factor in any business, and that is where the focus will be going forward.

Robots are becoming more ubiquitous across a multitude of industries

Conclusion

The introduction of machines and tools created a significant demand for unskilled labor (it rose from 20% of the workforce to 39% from 1700 to 1850). Machines either pushed craftsmen out of the labor market completely, or encouraged employers to decrease their workers’ wages. The Economist cites this exact situation in which wages fell drastically in the early 1800s, not recovering until 1960.

GE’s recently introduced vision inspection system, as my colleague Chris Matthews, reported. In theory, machines can help workers become more productive, and productivity leads to higher wages — but that’s not the case. Machines like this one at GE actually reduce the need for workers — especially those who are typically paid between $20 and $40 per hour in this field. Full Story

As machines replace humans, the cost of producing goods will drop, and as more people will be competing for the remaining jobs, wages will trend downwards. Wages will rise in some specialised sectors, but these jobs will demand a specialised set of skills, for example, robotics.  It appears that AI will only exacerbate the current situation in the years to come. Therefore, deflation and not inflation is what we might have to deal with for years to come.

 

Mexico: 113 politicians have been killed – Senate GOP moves to repeal consumer rule – Trump defended Kim Jong Un’s human rights

Mexico: 113 politicians have been killed - Senate GOP moves to repeal consumer rule - Trump defended Kim Jong Un’s human rights

113 politicians have been killed ahead of Mexico’s election. There are still two weeks to go

“Violence is altering the profile of candidates,” one expert told us. “Who sticks around? The reckless and those who collude [with criminals].”

That’s because this electoral season has been a brutally violent one in Mexico.

More than 100 candidates, pre-candidates, and current and former politicians have been killed, according to an organization tracking this. The government’s tally — 34, which counts only candidates — still pushes the death toll to four per month.

It gets more dramatic: There are hundreds of candidates who have backed out of their races out of fear for their safety, and many others who have curbed campaign activities.

The attacks have been brazen: a politician killed on a public bus, a candidate murdered while taking a selfie. You need to read Karla Zabludovsky’s deep dive into the violence in Mexico’s election. Full Story

 

 

Senate GOP moves to repeal consumer rule

The Republican-led Senate narrowly voted Tuesday to repeal a banking rule that would let consumers band together to sue their bank or credit card company to resolve financial disputes. Vice President Mike Pence cast the final vote to break a 50-50 tie. The banking industry had been lobbying hard to roll back the regulation from the Consumer Financial Protection Bureau. The bureau had moved to ban most types of mandatory arbitration clauses found in the fine print of agreements consumers often enter into when opening a checking account or getting a credit card.

The vote reflects the effort of the Trump administration and congressional Republicans to undo regulations that the GOP argues harms the free market. The measure now moves to President Donald Trump’s desk for his signature. White House press secretary Sarah Huckabee Sanders said the president applauded the vote. Full Story

As we stated when the Crowd is polarised it is easier to rob them, and this law is just one example of the many laws that will be passed stripping the average Joe of the last shreds of power he/she holds.  In the years to come it’s going to be easier for Companies to renege on their pension obligations and this will also apply to City, State and Federal workers.  Most pensions are extremely underfunded and are using aggressive calculations to give the impression all is well

 

 

Trump defended Kim Jong Un’s human rights abuses after the summit

Yesterday, while speaking to Fox News, President Trump praised Kim Jong Un as “tough,” “smart,” and a “great negotiator.”

When host Bret Baier asked the president if he brought up human rights with Kim at the summit, Trump said only “briefly.”

“You know, you call people, sometimes, killers. He is a killer,” responded Baier. Trump interjected that “well, he’s a tough guy,” adding that, “when you take over a country” at 27 years old, as Kim did, “that’s one in 10,000 that could do that.”

Still, Baier pressed, saying Kim has “still done some really bad things.” Trump responded, “Yeah, but so have a lot of other people done some really bad things.” You should watch the whole exchange.

A further thought:

When politics gives way to theater, we lose a sense of the magnitude of what’s supposed to be surprising. Watching the exchange reminded me of Katherine Miller’s thoughtful piece on the news cycle during this presidency: “each day demands your judgment. Is this normal? Is this normal? Is this normal?” Full Story

 

Rise of the machines: AI and automation will continue to gain traction

Rise of the machines: AI and automation will continue to gain traction

Rise of the machines must be monitored, say global finance regulators

LONDON (Reuters) – Replacing bank and insurance workers with machines risks creating a dependency on outside technology companies beyond the reach of regulators, the global Financial Stability Board (FSB) said on Wednesday. The FSB, which coordinates financial regulation across the Group of 20 Economies (G20), said in its first report on artificial intelligence (AI) and machine learning that the risks they pose need monitoring.

AI and machine learning refer to technology that is replacing traditional methods to assess the creditworthiness of customers, to crunch data, price insurance contracts and spot profitable trades across markets.

There are no international regulatory standards for AI and machine learning, but the FSB left open whether new rules are needed. Data on rapidly growing usage of AI is largely unavailable, leaving regulators unsure about the impact of potentially new and unexpected links between markets and banks, the report said.

AI could, for example, lead to “non-sustainable” increases in credit by automating credit scoring. Full Story

Too late, AI is unstoppable now. At first, AI is going to trigger massive flash crashes in the market, but then (and this is looking far into the future) it will start to question commands given to it by individuals that are driven by emotion. That’s when the title the “rise of the machines” will be appropriate. AI is another form of evolution, and as it will eventually be an entity of much higher reasoning than that of the average human, it will at some point refuse to take orders, but it won’t be all bad, it will only bad for those who love power and money. More on this in future updates. For now, remember that the stories you have been lead to believe via movies such as terminator border closer to nonsense than reality.

 

 

Walmart tests shelf-scanning robots in 50-plus stores

You may have seen stores deploy shelf-scanning robots before, but they’re about to get one of their largest real-world tests to date. Walmart is expanding a shelf-scanning robot trial run to 50 additional stores, including some in its home state of Arkansas. Machines from Bossa Nova Robotics will roam the aisles to check for stock levels, pricing and misplaced items, saving human staffers the hassle of checking everything themselves. There will be technicians on-site just in case, but the bots are fully autonomous. Thanks in part to 3D imaging, they can dodge around obstacles and make notes to return later if their path is completely blocked.

Walmart stresses that the robots are there to supplement humans, not replace them — to eliminate drudgery and the expenses that go with it. This helps workers get to the task of filling empty shelves, and that’s a job that the company doesn’t see ending any time soon given the difficulty robots still have when grabbing objects. “Store associates will always be better at that,” Walmart’s Martin Hitch told the Arkansas Democrat-Gazette. And the chief of Bossa Nova rival Simbe Robotics, Brad Bogolea, added that shelf checks can cost a major retailer hundreds of millions of dollars per year. However expensive the robots may be, they could pay for themselves very quickly.  Full Story

AI and automation will continue to gain traction.  We are in the midst of all-out price war and soon the medical; drug and education segments will be part of this war.  For years hospitals and drug company’s overcharged people, new technologies will suddenly emerge that will rip these sectors apart. The damage will be shocking, many hospitals will close their doors forever, and drug companies will face leaner times. However, those that adapt will make money hand over fist.

What makes the situation even more challenging for the education sector is that AI is going to transform everything. Almost all of the Major Fields most universities are providing degrees in today will be useless, and as it stands fewer people are attending college because of the cost.  What is going to gain traction is the practice of being an apprentice; once upon a time the way you mastered a skill was to work as an apprentice under someone who had mastered the respective field.  Any field that involves logic, math or science is something humans will find a hard time competing with AI unless the position requires out of the box thinking.

Accountants, many mid and top-level managers, Engineers, Mathematicians, programmers, Salespeople, workers in the fast food industry, auto industry and eventually even surgeons will be replaced.

 

 

AI ‘poses less risk to jobs than feared’ says OECD

Fewer people’s jobs are likely to be destroyed by artificial intelligence and robots than has been suggested by a much-cited study, an OECD report says.

An influential 2013 forecast by Oxford University said that about 47% of jobs in the US in 2010 and 35% in the UK were at “high risk” of being automated over the following 20 years.

But the OECD puts the US figure at about 10% and the UK’s at 12%.

Even so, it says many more workers face their tasks significantly changing.

The OECD says the previous forecasts exaggerated the impact of automation because they had relied on a broad grouping together of jobs with the same title.

Its new analysis, by contrast, takes account of the differences between jobs with the same name.

For example, the role of a carpenter can vary greatly depending on what type of projects a worker is involved in, how much autonomy they have, and the size of their employer. Some of those roles may be more vulnerable to automation than others.

The study did, however, flag up that young people could find it harder to find work in future as entry-level posts had a higher risk of automation than jobs requiring more experience.

The research was published last month, but attracted little attention until covered by the Financial Times. Full Story