Service sector

COVID pandemic spurs rise of 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 in east Los Angeles and you might speak to Tori – an artificially intelligent voice assistant who will take your order and l will send to line cooks.

“That doesn’t call for sick,” says Amir Siddiqi, whose family installed the voice of AI in their Arby’s franchise this year in Ontario, California. “He doesn’t get corona. And its reliability is excellent.

The pandemic didn’t just threaten the health of Americans when it hit the United States in 2020 — it may also have posed a long-term threat to many of their jobs. Faced with labor shortages and higher labor costs, companies are beginning to automate service-sector jobs that economists once considered safe, assuming machines couldn’t. easily provide the human touch they thought customers would demand.

Past experience suggests that these waves of automation end up creating more jobs than they destroy, but they also disproportionately wipe out the lower-skilled jobs that many low-income workers depend on. The resulting growth difficulties for the US economy could be severe.

Without the pandemic, Siddiqi probably wouldn’t have bothered to invest in new technology that could alienate existing employees and some customers. But everything went well, he says: “Basically, there are fewer people needed, but these people are now working in the kitchen and in other areas.

Ideally, automation can redeploy workers to better and more interesting work, provided they can receive the appropriate technical training, says Johannes Moenius, an economist at the University of Redlands. But while it’s happening now, it’s not moving fast enough, he says.

Worse still, an entire class of service jobs created when manufacturing began rolling out more automation may now be at risk. “Robots have escaped the manufacturing sector and entered the much larger service sector,” he says. “I considered contact jobs to be safe. I was completely taken by surprise.”

Improvements in robotic technology allow machines to perform many tasks that previously required people – tossing pizza dough, transporting hospital laundry, inspecting gauges, sorting goods. The pandemic has accelerated their adoption. Robots, after all, cannot get sick or spread disease. They also don’t ask for time off to deal with unforeseen childcare emergencies.

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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 the demand for fresh and customized around the clock while controlling labor costs. Robot chefs have appeared at places like Creator, a burger restaurant in San Francisco, and Dal.komm Coffee outlets in South Korea.

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

International Monetary Fund economists have found that past pandemics have encouraged businesses to invest in machinery in a way that boosts productivity but also sheds low-skilled jobs. “Our findings suggest that concerns about the rise of robots amid the COVID-19 pandemic appear justified,” they wrote in a January post.

The consequences could weigh most heavily on the least educated women who disproportionately hold the low- and middle-wage jobs most at risk of automation — and viral infections. These jobs include sales clerks, administrative assistants, cashiers and aides in hospitals and those caring for the sick and elderly.

Employers seem eager to use the machines. A survey last year by the non-profit World Economic Forum found that 43% of companies planned to downsize due to new technologies. Since the second quarter of 2020, business investment in equipment has grown 26%, more than twice as fast as the overall economy.

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

Restaurants have been among the most visible bot adopters. In late August, for example, salad chain Sweetgreen announced it was buying kitchen robotics start-up Spyce, which makes a machine that cooks vegetables and grains and squirts them into bowls.

It’s not just about robots either – AI-powered software and services are also on the rise. Starbucks has automated the behind-the-scenes work of tracking a store’s inventory. More and more stores have switched to self-checkout.

Scott Lawton, CEO of the Arlington, Va.-based restaurant chain Bartaco, was struggling last fall to get servers back to his restaurants when they reopened during the pandemic.

So he decided to skip it. With help from a software company, his company developed an online ordering and payment system that customers could use through their phones. Guests only have to scan a barcode in the center of each table to access a menu and order their meal without waiting for a waiter. Workers bring food and drinks to their tables. And when they’re done eating, customers pay over the phone and leave.

Innovation has reduced the number of employees, but workers are not necessarily worse off. Each Bartaco site – there are 21 – now has up to eight assistant managers, around double the pre-pandemic total. Many are former servers, and they roam between tables to make sure everyone has what they need. They receive annual salaries starting at $55,000 rather than hourly wages.

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

Rising automation hasn’t blocked a stunning rebound in the US job market, at least so far.

The US economy lost 22.4 million jobs in March and April 2020 when the pandemic storm hit the United States. openings and complain about not finding enough workers.

Behind the hiring boom is increased spending by consumers, many of whom weathered the crisis in surprisingly good financial shape — thanks to both federal relief checks and, in many cases, savings accrued from working. at home and skipping daily journeys.

Mark Zandi, chief economist at Moody’s Analytics, expects employers to be scrambling for workers for a long time.

On the one hand, many Americans are taking their time getting back to work — some because they’re still worried about COVID-19 health risks and child care issues, others because of the generous federal unemployment benefits, which will expire nationwide on September 6.

In addition, a large number of baby boomers are retiring. “The job market is going to be very, very tight for the foreseeable future,” says Zandi.

For now, the short-term benefits of economic recovery outweigh any job losses from automation, the effects of which tend to build gradually over several years. This may not last. Last year, researchers from the University of Zurich and the University of British Columbia found that the so-called jobless recoveries of the past 35 years, in which economic output rebounded from recessions faster than employment, could be explained by the loss of jobs vulnerable to automation. .

Despite strong hiring since the middle of last year, the US economy is still short of 5.3 million jobs from what it had in February 2020. And Lydia Boussour, chief US economist at Oxford Economics, said calculated last month that 40% of missing jobs are vulnerable. to automation, especially those in food preparation, retail and manufacturing.

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

“A lot of automated jobs were in the middle of the skill distribution,” says Acemoglu. “They no longer exist, and the workers who performed them now work in less skilled jobs.”

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