For Manufacturing and Retail Companies, Using Automated Robots is Cheaper Than Actual Slave Labor Would Be

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Automation has touched just about every aspect of our lives, whether we directly see it or not. Robots and other automated systems are clearly the wave of the future, even if it may lead to significant job losses in the next 20 years.

To highlight that point, automation and robotic technology has reached a point that makes it more cost effective for companies to use mechanical workers as opposed to actual slaves. Since about the year 2000, robots have beaten out American manufacturing workers when it comes to cost efficiency, mainly due to the relatively high wages and benefits many of those with manufacturing jobs enjoy. However, it still would have cost more to install and maintain a relatively simple spot welding machine than it would have been to just pay 2-3 welders.

In areas of the developing world where wages might be 10-15 times lower than what an American worker might expect to see, hiring cheap labor was still the most cost effective answer. Not to mention that even 10 years ago, automation was not nearly as advanced as it is now.

Today, as wages continue to rise while manufacturing jobs continue to dwindle, many factories have turned large portions of their lines over to robots. As of March 2017, you can find a robot that would take the place of the aforementioned spot welders or a painter for around $10,000. With maintenance and control included and spread over the cost of several dozen of these robots, it may cost around $4,000/year to maintain on the extreme high end.

On the other hand, if institutionalized slavery still existed, factories would be looking at around $7,500 in annual costs for housing, food and healthcare per “worker”.

You could argue that some manufacturers are taking advantage of virtual slave labor in countries with drastically lower wages than in the U.S.. Even in a place like China, where many workers make around $450/month, robots have the upper hand due to their slightly lower maintenance cost, and the fact that they can work 20 hours a day, seven days a week.

Retail businesses have the potential to see an even bigger savings between its human workers and automated machines. Big box retailers are already heading this way with informational kiosks and self-checkout lanes, restaurants are not far behind with talk of big jumps in the minimum wage in the works for several cities.

If it takes $2,000 to install what is basically an iPad and stand for customers to order from at McDonald’s or Chipotle, a restaurateur is looking at less than a month before recouping their entire investment if they eliminate just one cashier position. Slave labor wouldn’t be able to come close to competing with that.

What this may mean is that we could see some manufacturing plants coming back to America. However, most of the jobs will be going to pieces of metal and plastic that are not subject to any sort of labor laws, never take days off, work 140 hours a week, and don’t draw a salary. Still, these new plants will employ some people, provide tax revenues for local, state and federal governments, as well as lower transportation costs for items destined for the domestic market.

Next: 3-D Printing technology has gotten ridiculously cheap as evidenced by this 3-D printer.