A robot may be taking your job

November 16, 2015 10:13 AM

Last week, Bank of England chief economist Any Haldane predicted that robots and automation threaten tens of millions of jobs around the United States and in the United Kingdom.

Haldane predicts that roughly 80 million American and 15 million British jobs are susceptible to replacement by robotics. In a speech before the Trades Union Congress in London, Haldane said that low-wage jobs are likely the most at-risk positions, but middle- and upper-class jobs that require higher education are increasingly more at-risk.

 “Technology could act like a regressive income tax on the unskilled. It could further widen income disparities,” Haldane said.

Haldane argued that new technologies have the capacity to create new industries and demand for new goods. However, economists have largely expressed frustration in the post-dot-com era that new industries have not emerged as quickly and new technologies have already disrupted or ultimately will disrupt new industries and positions such as autonomous vehicles on the ride-sharing sector.

Proof that robots are here to stay

For further proof that technology is displacing human workers, look no further than international aircraft giant Boeing Company (BA). The company has produced 20% more planes during its current peacetime boom than it did during the last similar cycle in the early 1990s.

But the company is currently meeting that surge in demand with one-third fewer employees. The combination of robotics and outsourcing are helping Boeing boost its production capacity.

The company said that it is using 60-ton robots that operate rivet guns to fasten fuselages in their aircraft. According to reports, these machines work twice as fast as their human counterparts and have an error rate that is 66% lower. Those figures complement a boost in both quality and safety.

Reuters predicts that labor savings of robots tied to riveting on the company’s 777 line could be greater than 100-fold. The news agency predicts that just one person is needed to operate eight sets of robotic arms designed to replace the riveting work of 16 humans. That means that one supervisor of the machines is overseeing the former work of what once required 128 employees. That’s all done without lunch breaks, without holidays, without rising health insurance costs.

And it’s all happening 24 hours per day, seven days per week.

The case of Boeing’s manufacturing efforts are not distinct just to the organization.

And investors should take note of this booming trend in automation

AI, robotics and automation stocks

Disruption can be expected in a number of sectors including automotive companies, healthcare, industrial services, agriculture, mining, and financials.

The Autonomous vehicle sector alone could potentially be worth as much as $1.9 trillion by 2025 depending on the acceleration of the technology over the next decade.

While artificial intelligence is fueling the next frontier of a “smarter” economy that will increase production, decrease costs, and remove the need for human workers. Companies like Facebook (FB), Apple (AAPL), Alphabet (GOOGL), and International Business Machines (IBM) are potential leaders in the space. Over the last year alone, Alphabet have invested in nine robotics companies.

On the robotics front, look to companies like Intuitive Surgical (ISRG), Rockwell Automation (ROK), and Japan’s Fanuc (FANUF). 

About the Author

Garrett Baldwin is the Managing Editor of the Alpha Pages and the Features Editor of Modern Trader. An author and Baltimore native, he earned a BS in journalism from the Medill School at Northwestern University, an MA in Economic Policy (Security Studies) from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University.