Robot Reality: "Last Resort" Service Jobs Next to Go; "Baxter" Back in the News

I have written about "Baxter" before. Baxter is not a person. Rather Baxter is a robot rapidly replacing humans in various manufacturing jobs.

See Meet "Baxter" the Robot Out to Get Your Minimum-Wage, No Benefits, Part-Time Job, Because He's Still Much Cheaper; Fed Cannot Win a Fight Against Robots.

Service Jobs Next to Go

Baxter is back in the news. The Fiscal Times says The Robot Reality: Service Jobs Are Next to Go.

If you meet Baxter, the latest humanoid robot from Rethink Robotics – you should get comfortable with him, because you'll likely be seeing more of him soon.

Rethink Robotics released Baxter last fall and received an overwhelming response from the manufacturing industry, selling out of their production capacity through April. He's cheap to buy ($22,000), easy to train, and can safely work side-by-side with humans. He's just what factories need to make their assembly lines more efficient – and yes, to replace costly human workers.

But manufacturing is only the beginning.

This April, Rethink will launch a software platform that will allow Baxter to do a more complex sequencing of tasks – for example, picking up a part, holding it in front of an inspection station and receiving a signal to place it in a "good" or "not good" pile. The company is also releasing a software development kit soon that will allow third parties – like university robotics researchers – to create applications for Baxter.

These third parties "are going to do all sorts of stuff we haven't envisioned," says Scott Eckert, CEO of Rethink Robotics. He envisions something similar to Apple's app store happening for Baxter. A spiffed-up version of the robot could soon be seen flipping burgers at McDonalds, folding t-shirts at Gap, or pouring coffee at Starbucks.

What's worrisome to Martin Ford [robotics expert and author of The Lights In the Tunnel: Automation, Accelerating Technology and the Economy of the Future] is that these jobs have been offering a huge safety net to the middle class.

They're jobs he calls "the jobs of last resort." When someone can't find a salaried job, they look for lower-paying service jobs to get by – and because the jobs typically have a high turnover rate, they're more likely to be available. Think of all the college graduates who take jobs as cashiers or baristas before they find salaried work. If those jobs were to vanish, those workers would be forced to file for unemployment instead."

Jobs of Last Resort

The Fed and the Obama administration are both clueless as to why this is happening and what to do about it.

Obama wants to raise minimum wages. He also sponsored Obamacare that is going to cost businesses plenty. Those moves encourage automation.

On its part, the Fed has driven interest rates to zero. When money is that cheap, all kinds of capital expenditures that would not otherwise be affordable, quickly become affordable.

Technology is actually a good thing. Few see it that way because the Fed has destroyed the value of the dollar and Obama is hell bent on giving businesses a reason to outsource jobs to robots as fast as they can.

To be fair, much of this is natural workforce evolution. However, the Fed and the Obama administration goosed the trend at the worst possible time.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com