Add 1 robot on the manufacturing line, watch 5 jobs go poof

Courtesy of Jacksonville Business Journal

American manufacturing jobs have been in decline for decades, with automation long identified as the key driver of those job losses. Now, a new working paper from economists Daron Acemoglu of the Massachusetts Institute of Technology and Pascual Restrepo of Boston University suggests the negative economic effect of this automation might be ever greater, as they found little evidence that other industries have grown enough to offset the jobs lost to robots in manufacturing.

The issue is particularly acute given that technological advances will likely keep coming, and businesses likely will continue to keep deciding that they’d rather invest in automated labor rather than human labor, MIT’s Technology Review reported recently. Furthermore, Treasury Secretary Steve Mnuchin told Axios last week he’s “optimistic” that robots won’t displace people in the near future.

Acemoglu and Restrepo’s paper puts some hard numbers to the question of how many people robots displaced from their jobs from 1990 to 2007. Specifically, the paper said, “one more robot reduces aggregate employment by about 5.6 workers… and one more robot per thousand workers reduces wages in the aggregate by about 0.5 percent.”

two robotic arms

Economists have hypothesized that when robots displace manufacturing workers, jobs in other fields pop up to offset those losses. The new paper says that hasn’t happened to a large degree in part because, on the local level, those displaced workers generally aren’t qualified for or aren’t willing to do those new jobs or other jobs that might be hiring, so they remain unemployed and the new jobs that do get filled elsewhere don’t make up the difference, according to The New York Times.

As for what might be ahead, The Washington Post analyzed how voting data seems to correlate with where people lost jobs to automation. Rust Belt regions where manufacturing automation has been most concentrated tended to vote for Donald Trump over Hillary Clinton last year. That suggests Trump’s message about reinvigorating American manufacturing played especially well in the same communities where automation put many people out of work, the Post said. But at the same time, it also suggests Trump’s efforts to have companies keep their manufacturing plants open in the United States isn’t as direct an appeal as it could be, as it’s one thing to call for companies to keep their operations in the U.S. and another to call for plants to hire people rather than invest in robots.

Project Velocity seeks $2.2M to expand manufacturing

Courtesy of http://www.jaxdailyrecord.com

By Karen Brune Mathis, Managing Editor

A Jacksonville building-products manufacturer proposes to add 20 jobs, retain 150 and invest $54 million into its North Jacksonville plant.

Known as “Project Velocity,” it seeks a $2.211 million Recapture Enhanced Value grant from the city to make the deal work. It says it is looking at two other U.S. cities where it has existing facilities.

Resolution 2019-289 was introduced to City Council to support the grant. The agreement would rebate 60 percent of the incremental increase in its property taxes for seven years after the capital investment is made and is on the tax roll.

The unidentified company proposes a $4 million improvement to its property and a $50 million purchase of manufacturing equipment.

The legislation requests a two-reading passage.

The legislative fact sheet explains that the company would add 20 jobs by 2022 and would pay an average $40,000 a year plus benefits.

That wage is greater than 60 percent of the countywide average.

It says the advanced-manufacturing company is a target industry. It proposes to create jobs for machine operators and assembly line workers for a new manufacturing line.

“The company has stated that the City of Jacksonville incentive being proposed is a material factor in its decision to expand its operation in Jacksonville, Florida versus the two other U.S. cities where they operate existing facilities,” the fact sheet says.

The fact sheet says the company is in a Level 1 Distress Area, which allows a REV grant up to 60 percent.

A job creation schedule in the economic development agreement shows that 10 jobs would be created by year-end 2018 and the other 10 in 2022.

kmathis@jaxdailyrecord.com