Automation spurred by skilled worker shortage, business experts say

By RILEY MURDOCK
Capital News Service
LANSING — “I just bought a million-dollar robot, and it’s replacing 32 people and it never calls in sick.”
This is what a Michigan business owner recently told Rob Fowler, president and CEO of the Small Business Association of Michigan.
As technology improves by leaps and bounds, automation is increasingly replacing human labor to make things in Michigan. The implications of automation are enormous, even changing the nature and definition of “work.”
“It’s sort of moving from making stuff with our hands to running machinery and equipment that makes stuff, to managing and repairing and programming robots to do the work,” Fowler said.
The Robotics Industry Association estimated 250,000 robots were in use in the United States as of May 2017, the third most in the world behind Japan and China. An August 2017 report from the Brookings Institute concludes 233,305 robots are in use.
Michigan leads the nation with roughly 28,000 robots, or 12 percent of the nation’s total, according to the Brookings Institute. Metro Detroit itself has more than 15,000 industrial robots as of August 2017, or 8.5 for every 1,000 workers, more than three times the number of robots as other metros.
Automation might be accelerating, but it’s not new, Fowler said. Technology has been crowding out human labor for at least a century.
“In a way, Henry Ford started it with the assembly line,” Fowler said. “Technology has allowed us to be way more efficient at building stuff, so in Michigan, we build stuff, and it’s allowed us to do it at a productivity level that is world-class. Sometimes, productivity means we use fewer people, more machines.”
While Michigan’s manufacturing industry is growing again, it won’t reach the same employment level it once was at, Michigan Manufacturers Association President Chuck Hadden said.
That’s because it took a lot of different workers to do what a handful can do now.
“I’m not saying that robots are going to replace everybody, because somebody’s got to make the robots, first of all. Second of all, someone’s got to program the robots to make sure they’re doing what they need to do, but our workforce is going to be changing over the future, and it’s going to take less people to make things,” Hadden said.
But companies will still need people: Humans bring ingenuity and problem-solving that a machine can’t, and that problem-solving ability can never be replaced, Hadden said.
“A machine can’t do that for you,” Hadden said. “Artificial intelligence, machine learning, only goes so far.”
David Miller, president of the Cadillac Area Chamber of Commerce, agrees that workers need problem-solving skills to stay competitive.
“Even the middle skill sets that everybody thinks are in high demand, if they don’t have a degree of problem-solving associated with them, those job numbers are declining as well,” Miller said.
Hadden said he hopes smaller companies will reinvest funds, such as any benefits from recent tax cuts, into their businesses to buy machinery or to learn how to be more productive with automation and robotics so they can keep up and survive in an automated environment.
“In some cases it may force some people out of business,” Hadden said. “If you don’t go to work and be on the cutting edge of your products that you make, you’re going to be left behind. So you need to reinvest in your companies and not just take money out.”
Automation replacing jobs is a more pressing issue now because of a tight labor market, Fowler said. The main issue his members have are that they can’t find enough people to work at their companies.
For Miller, automation is a result of his members’ struggle to find qualified talent. Not enough area tech students are pursuing manufacturing or welding fields, he said.
“They would like to hire people but they’re having a hard time finding people with the skill sets that they need, the work ethic that they need,” Miller said. “They’re having to invest in more automated equipment to reduce the dependency on the labor pool that’s lacking.”
The economic development system has been geared toward two metrics for generations, Miller said: investment and job creation.
Companies continue to make investments, but cannot create the jobs to match, Miller said. Employers don’t intend to cut workers, but they do what they must to meet production requirements with the workers they have, Miller said. They fill the void with technology.
“A number of our companies are having new projects. They’re investing significant sums of money, but traditionally you’re expecting them to hire 50, 100, 150 workers,” Miller said.
“Well, they’re not doing that today because those workers aren’t out there.”
Fowler said that to thrive, workers must consider which industries need workers and what skills they’re hunting for. Workers can then get trained in those areas.
“Certainly right now if you had an inclination to work, if you have some basic set of talents and the ability to continue to learn, if you are reliable – that is, you will show up on time and you will put in an honest day’s pay for an honest day’s work – there’s a job for you in Michigan, no question about it,” Fowler said.
Labor costs are rising because companies are competing for talent, while the cost of technology is going down, Fowler said. There’s more pressure on employers to provide more benefits.
Meanwhile, there are fewer opportunities for unskilled workers.
Fowler said what’s being taught in high schools and colleges must be adapted to understand this fundamental change, but high school dropouts or graduates without postsecondary or trade education are the workers most often being replaced.
“I think the world is going to be a hard place for people who have no skills, no continuing education, and want to make a living,” Fowler said.