COVID Pandemic Spurs Increase in Automation to Fill Service Sector Jobs – CBS San Francisco

LOS ANGELES (CBS / AP) – Ask for a roast beef sandwich at an Arby’s drive-thru east of Los Angeles and you might be talking to Tori – an artificially intelligent voice assistant who takes your order and sends it to the chefs.

“It doesn’t make you sick,” says Amir Siddiqi, whose family installed the AI ​​voice at Arby’s Franchise in Ontario, California this year. “It doesn’t get a corona. And the reliability is great. “

Not only did the pandemic threaten the health of Americans when it struck the US in 2020 – it could also pose a long-term threat to many of their jobs. Faced with labor shortages and higher labor costs, companies are starting to automate jobs in the service sector that economists once considered safe, on the assumption that machines couldn’t simply make the human contact they believed customers required .

Past experience suggests that such waves of automation ultimately create more jobs than they destroy, but also disproportionately destroy less qualified jobs, on which many low-income workers are dependent. The resulting growing pains for the US economy could be severe.

Without the pandemic, Siddiqi likely would not have bothered to invest in new technology that could alienate existing employees and some customers. But it went smoothly, he says: “Basically fewer people are needed, but these people now work in the kitchen and other areas.”

Ideally, automation can convert workers into better and more interesting jobs, as long as they get the appropriate technical training, says Johannes Moenius, an economist at the University of Redlands. But while that’s happening now, it’s not going fast enough, he says.

Worse, a whole class of service jobs that were created when manufacturing began to use more automation can now be at risk. “The robots have fled the manufacturing sector and immigrated to the much larger service sector,” he says. “I thought contact jobs were safe. I was completely surprised. “

Improvements in robotic technology are allowing machines to do many tasks that used to require humans – throwing pizza dough, moving hospital linen, inspecting gauges, sorting goods. The pandemic accelerated its rollout. After all, robots cannot get sick or spread disease. They also do not require any leave of absence to deal with unexpected childcare emergencies.

CONTINUE READING: The demand for robotic chefs from companies in the Bay Area is increasing with the COVID pandemic

As KPIX reported last year, robotic food service was a trend even before the coronavirus pandemic as hospitals, campus cafeterias, and others tried to meet demand for fresh, bespoke options around the clock while keeping labor costs in To keep check. Robot chefs have performed in places like Creator, a burger joint in San Francisco, and Dal.komm coffee outlets in South Korea.

Prior to 2020, Hayward-based tech company Chowbotics had sold around 125 of its $ 35,000 robots, mostly to hospitals and colleges. Shortly after the coronavirus outbreak, sales rose more than 60%, CEO Rick Wilmer said, with growing interest from grocery stores, senior housing communities and even the U.S. Department of Defense.

International Monetary Fund economists found that past pandemics had encouraged companies to invest in machines that could increase productivity – but could also kill low-skilled jobs. “Our results suggest that concerns about the rise of robots amid the COVID-19 pandemic seem justified,” they wrote in a January newspaper.

The consequences could hit the less educated women who disproportionately fill the low- and middle-wage jobs most exposed to automation – and viral infections. These professions include salespeople, administrative assistants, cashiers and helpers in hospitals, as well as nurses and geriatric nurses.

Employers seem eager to introduce the machines. A survey by the not-for-profit World Economic Forum last year found that 43% of companies planned to reduce their workforce due to new technology. Since the second quarter of 2020, corporate investment in equipment has increased 26%, more than twice the rate of the economy as a whole.

The fastest growth is expected in roving machines that clean the floors of supermarkets, hospitals and warehouses, according to the International Federation of Robotics, a trading group. The same group also expects increased sales of robots that provide information to shoppers or deliver room service orders in hotels.

Restaurants are among the most visible robot users. At the end of August, for example, the salad chain Sweetgreen announced that it was buying the kitchen robot startup Spyce, which makes a machine that cooks vegetables and grains and pours them into bowls.

It’s not just robots either – software and AI-supported services are also on the rise. Starbucks has automated the work behind the scenes to keep track of a store’s inventory. More shops have moved to self-checkout.

Scott Lawton, CEO of the Arlington, Virginia-based restaurant chain Bartaco, struggled to get waiters to return to his restaurants last fall when they reopened during the pandemic.

So he decided to give it up. With the help of a software company, his company developed an online ordering and payment system that customers could use over their phones. Guests now simply scan a barcode in the center of each table to access a menu and order their food without having to wait for a waiter. Workers bring food and drinks to their tables. And when they finish eating, customers pay on their phone and leave.

Innovation has reduced the number of employees, but employees are not necessarily worse off. Each Bartaco location – there are 21 – now has up to eight deputy managers, roughly double the pre-pandemic total. Many are former servers and they wander between the tables to make sure everyone has what they need. They receive annual salaries of $ 55,000 or more instead of hourly wages.

Tips are now shared among all other employees, including dishwashers, which now typically make $ 20 an hour or more, far more than their pre-pandemic salary. “We don’t have the labor shortage you read about on the news,” Lawton says.

The rise in automation has not stalled a breathtaking rebound in the US labor market – at least so far.

The US economy lost a staggering 22.4 million jobs in March and April 2020 when the pandemic storm hit the US. Attitudes have since recovered rapidly: employers have brought back 17 million jobs since April 2020. In June they posted a record 10.1 million vacancies and complain that they cannot find enough workers.

Behind the hiring boom is an increase in consumer spending, many of whom have come through the crisis unexpectedly financially – thanks to both federal relief checks and, in many cases, the accumulated savings from working from home and the elimination of the daily commute.

Mark Zandi, chief economist at Moody’s Analytics, assumes that employers will likely be looking for workers for a long time to come.

For one thing, many Americans are taking their time to get back to work – some because they are still concerned about the health risks and childcare issues posed by COVID-19, others because of the generous federal unemployment benefits that came out on September 6th nationwide expires.

In addition, many baby boom workers are retiring. “The job market will be very, very tight for the foreseeable future,” says Zandi.

Currently, the short-term benefits of economic snapback outweigh any job losses from automation, the effects of which are gradually becoming apparent over a period of years. That can’t last. Last year, researchers from the University of Zurich and the University of British Columbia found that the so-called unemployment rallies of the past 35 years, in which economic output recovered from the recession faster than employment, could be explained by the loss of automation-vulnerable jobs .

Despite strong hires since the middle of last year, the US economy is still missing 5.3 million jobs compared to February 2020. And Lydia Boussour, senior US economist at Oxford Economics, calculated last month that 40% of the missing jobs are vulnerable to automation, especially in food preparation, retail and manufacturing.

Some economists fear that automation will push workers into lower-paying positions. Daron Acemoglu, an economist at the Massachusetts Institute of Technology, and Pascual Restrepo of Boston University estimated in June that up to 70% of the stagnation in US wages between 1980 and 2016 could be explained by machines replacing humans in routine tasks.

“Many of the jobs that are being automated were in the middle of the skill distribution,” says Acemoglu. “They no longer exist and the workers who used to do them are now doing less skilled jobs.”

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