Does Automation Cost Jobs?


A major packaging company is working on a major expansion project at one of its U.S. facilities. The company also has European and Asian facilities, but it’s building 126,000 square feet of office space and manufacturing space which will include customer collaboration space, room for kitting and packing, a railroad dock, and a means of bringing design and production together more easily. The facility will be more streamlined and more automated.

The project will cost about $7,000,000 and the local government is kicking in nearly half a million for job creation. The expected number of new jobs? 15.

A hotel building project of the same size would probably create more than twice as many jobs. The average hotel employs 36 workers, and overall the number of workers per hotel room is .6, so a larger hotel employs more people. A call center could employ even more people. A traditional, low-automation factory might even bring in more jobs. So why is the local government providing rebates from their job creation fund?

If we just count the number of people employed, we might think that industrial motion control is bad for workers. But there’s more to it than that. A typical hotel worker earns 72 cents on the dollar compared to the national average. Many hotel workers are unwillingly working part time and receiving no benefits. A full time hotel worker earns on average $30,000 per year compared with $55,000 for an average factory worker.

Bottom line, jobs in a typical service business are low wage, high turnover jobs with little hope of advancement. The new jobs at the packaging plant will be well paid jobs with prospects.

Which would you rather have in your community?

While you’re thinking about it, let us remind you that when your legacy Indramat or new Indradrive  components need service, we can help. We’re specialists, and we provide everything from phone support to factory repair.

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