Friday, September 1, 2017

Where Do Robots Live in the United States?

A fascinating brief by Mark Muro, Senior Fellow at the Brookings Institute takes a unique look at one of the key issues facing American workers (and other workers in developed nations); automation, particularly the growing use of industrial robots in the workplace.

Mr. Muro's analysis looks at the geographic distribution of industrial robots which he defines as "automatically controlled, reprogrammable machines that are capable of replacing labor in a range of tasks".  If you want to get a sense of how pervasive robotics are in some industries, here is a video showing Telsa's use of robots in its manufacturing operations at Fremont:

As you can see, in the case of Tesla, a great deal of the manufacturing process is handled by industrial robots.

Using data from economists Daron Acemoglu and Pascual Restrepo which looked at sales data for robotics, Mr. Muro was able to calculate the number of industrial robots per thousand workers in U.S. metropolitan areas and then plot them on a map as such:

In total, in 2015, there were 233,305 industrial robots in use across the United States.  As you can see, the incidence of industrial robots is not evenly dispersed across the United States, rather, robots are concentrated in the Midwest and Southern states and to some degree in California, in fact, more than half of the robots are located in 10 states led by Michigan with nearly 28,000 robots (12 percent of the nation's total) followed by Ohio with 20,400 robots (8.7 percent of the nation's total) and Indiana with 19,400 robots (8.3 percent of the nation's total).

Despite the general decline in its economy, Detroit had 15,115 robots in 2015, up from 5,753 in 2010 with 8.5 robots per thousand workers giving it the distinction of having, by a wide margin, the most robots of any other metropolitan area in the United States.  Here is a list showing the largest metropolitan areas with the most and least robots per thousand workers:

As you can see when you examine the column showing the annualized percentage change in total robots between 2010 and 2015, there has been rather explosive growth in the use of industrial robots with some areas seeing a near tripling of the number of robots used over the five year period.

In case you thought that only large metropolitan areas were impacted by the use of robots, some smaller towns and cities scattered throughout the former industrial heartland have even more intensively adopted robots.  Elkhart County in Indiana had a total of 4,355 robots in 2015, up from 1,778 in 2010 and has a robot-to-thousand workers ratio of 35.9 to one.  The city of Kokomo in Indiana is not far behind with a robot-to-thousand workers ratio of 35.2 to one, however, it had only 1,274 robots or less than one-third of Elkhart County's total.

What is fascinating about this analysis is the explosive growth in the use of industrial robots over the past five years.  It is no wonder that workers in many industries are feeling threatened, that is, if they still have their jobs.  Much of Corporate America seems to be fully embracing the use of robots; they don't join unions, they don't require bathroom or lunch breaks, they don't call in sick and they don't require their employer to spend money on raises, funding pensions or health care.  In so many ways, it is easy to see why the post-Great Recession improvement in employment has had a very variable impact on American workers and why this recovery feels so different than other post-recessional economic expansions and perhaps, why Donald Trump attracted millions of voters.  The expansion in the use of robots has displaced hundreds of thousands of workers who used to be able to count on a lifetime of work and has, no doubt, had a significant impact on what those who have retained their jobs can expect to earn one the long run.  

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