Some unemployed people are lucky.  As a result of the labor shortage, they were offered jobs with better benefits and higher wages than they had before as incentives to return to work.  But others were not as fortunate, and their jobs were eliminated - replaced by robots.

The trend toward automation began a long time ago but has accelerated because of the pandemic.  Many companies lost a great deal of money during the lockdowns, and when business finally began bouncing back, the improvement was offset in part by shortages of employees. 


The Rise Of Robots

For many companies, robots were the lifeline they had been praying for.  Not only do they reduce costs, but they are also a very reliable and efficient “workforce,” an added advantage is improved safety, as they can neither contract nor spread the virus. 

According to Bloomberg, a recent Federal Reserve survey found that one third of the firms that have difficulty hiring all of the employees they need are either considering using automation as a substitute for those workers or have already done so. This finding was supported in numerous earnings calls made by senior executives over the past month who alluded to such plans. 

Mark Coffey, a vice president at Hormel Foods Corp., told Bloomberg that his company is “ramping up our investments in automation because of the tight labor supply.”

Probably the most visible area in which automation is turning up is the fast food industry, replacing workers who no longer want to do tiring and boring work for very low wages; these devices are precise and reliable, never complain about salary or work conditions, and pay for themselves over time. That’s why an increasing number of hamburger joints, fried chicken stores, pizza shops and other food outlets are turning to them. 

Domino’s Pizza, for example, is “putting in place equipment and technology that reduce the amount of labor that is required to produce our dough balls,” said Chief Executive Officer Ritch Allison.

Ametek Inc., a maker of automation equipment for industrial firms, is benefiting big time from this trend.  David Zapico, the CEO, says the company is “firing on all cylinders because people want to remove labor from the processes.  In some places, you can’t hire labor.”


Catching On

Automating ordinary but nevertheless crucial tasks is catching on at companies around the world.  In the past decade, the number of industrial robots installed has more than doubled to approximately three million, and automation has been spreading into service businesses too.

According to Bloomberg, the U.S. had lagged behind other countries, particularly some in Asia, in their use of automation.  The pandemic, however, has changed this.  

In August, there were an estimated 10.4 million jobs waiting to be filled. But rather than rejoining the workforce and collecting regular paychecks, record numbers of Americans are striking or threatening to go on one, quitting their jobs, and are not looking for another one.  Amazing as it sounds, there are 107 million Americans of working age who are not in the workforce.


Fair Wages And Wealth Inequality

The difficulties in hiring workers and the higher costs involved when they do is encouraging companies to accelerate their use of automation when possible -- a trend that over the long term will cost many employees their jobs, unskilled laborers in particular. 

Of course, unions are fighting this, but so far their objections have had little impact.  According to Zero Hedge, “the automation wave is already sweeping through the economy, supercharged by the pandemic.”

Even before the virus, wealth inequality had become a huge problem: The top 1% are earning more than the entire bottom 50% combined. According to recent data from the Fed, the top 1% of Americans have a combined net worth of $34.2 trillion, while the bottom 50% of the population holds just $2.1 trillion combined; this means the super-rich have 15 times more wealth than the poorest half of the country.

Zero Hedge says automation will make this wage gap worse.  If this trend continues, labor demand will grow slowly, inequality will increase, and the prospects for many low-education workers will not be very good,” said Daron Acemoglu, a professor at MIT.  

Acemoglu said firms could “develop technologies that are more complementary to workers, but that’s not “the direction the technology is going currently.” 


Lookout Above

The benefits of robot technology -- lower costs and increased productivity -- are showing up mostly in jobs filled by low-income workers, but going forward that’s expected to change.  As the technology improves and becomes more widely used, better paying jobs and those requiring more skills will also be affected.  

Economists anticipate that increased use of robots and related technology will result in the economy suffering from growing pains this decade as displaced workers sit idle.  They believe that the government will have to issue additional stimulus checks, and in greater amounts and more frequently; they may even have to implement basic income, a policy that guarantees everyone with a livable income.  Basic income has already been adapted by some areas of Europe and even in some parts of the US.

Robots have clearly “graduated” from being toys, vacuum cleaners, and programmable pets.  They are already being used in many applications in industry, in medical diagnosis, delicate surgery, space exploration, and construction.  A hotel in Japan is completely automated and it was built years ago.

And going forward, as their capabilities improve even more and their costs continue to decrease, they will become more prevalent and turn up in even more applications. In fact, robots already have performed tasks some thought would be impossible and that others believed possible but only in the very distant future, such as composing music, creating artwork, and writing thoughtful essays.  

The pandemic has brought the future into our everyday lives. Is the world ready for robots that vax people?


Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.