Human v Machine, economic scorecard

This was posted (Tesla profit soars. And also craters - #190 by btresist) recently:

and is an interesting assertion. I wondered if there is any data to support it.

How would we measure that “most of our labor” is done by people vs machines?

We can distinguish between labor (people) and capital (equipment, machines) and together labor and capital do work that produces outputs that are purchased in the economy.

Browsing around, it seems there is a measure called labor share, the amount of production (GDP or similar) attributable to labor, with the balance attributable to capital. Using this measure in the US, labor accounts for about 60% of GDP, and hence most work can be attributable to labor, not machines by this measure, which is measuring contributions in terms of economic value (ILO Data Explorer).

Also, there are other similar data sets and they show labor’s share declining from near 65% to near 60% from 1950 until recently, with the exact details depending on the data set (see Share of Labour Compensation in GDP at Current National Prices for United States (LABSHPUSA156NRUG) | FRED | St. Louis Fed or Estimating the U.S. labor share : Monthly Labor Review: U.S. Bureau of Labor Statistics).

5 Likes

Most of the US labor force is leveraging machines. That has become extreme.

We do not walk to work. We do not hand cart wares to market. We do not build goods without machines. We do not plough fields or sow wheat without machines. We do very little but light service work. We rarely even polish the silverware. The next generations do not want grandma’s silverware.

1 Like

Consider that there is a very large part of the labor force in service industries while manufacturing is eqipement heavy. One exception is construction which is also labor intensive. Seen with this perspective Tesla likely is capital intensive.

The Captain

3 Likes

I work with construction workers a lot.

Occasionally they pick up a shovel. However, most digging is done with backhoes are boring machines.

Most framing is done with electric nailer, must rafters are built with large presses in a factory. For metal buildings, most of the red frame is cut and welded with cnc machines. The metal siding is precision cut in a factory. The red frame is erected with cranes.

For finish work like sheet rock and and tile, the rock is installed with electric screw guns. The finish work is mostly by hand with simple machines, but the painting and texture is applied with fairly Sophisticated sprayers.

Only when there are unusual circumstances does anyone break out a team with shovels or hand paint a room, when it happens there is some serious expense going on.

Cheers
Qazulight

(Work fascinates me, I can watch it all day long)

5 Likes

And note that health care is labor intensive. Lots of technical assistance by machines and electronics but most with highly trained operators.

That’s an interesting perspective. Those machines all require a human operator. So how much of that work is done by machine and how much by human labor? I don’t know.

But that work is easily contrasted with something like an industrial robot that might do all of the welding on a car body, for example.

—Peter

2 Likes

[quote=“qazulight, post:4, topic:101440”]
Most framing is done with electric nailer,

Even with pneumatic nail guns replacing the hammer, there is still a lot of human labor needed for framing. The top/bottom plates have to be cut and laid out, studs laid in place, headers and jack studs built and cut for load bearing walls. And then the wall assembly has to be raised and plumbed, with temporary braces installed to hold the walls in place.

must rafters are built with large presses in a factory.

The rafters are typically raised into place by a crane but there is still a need for human labor to be at each end of the truss and one in the center to properly locate the trust onto the wall and secure/brace the truss.

1 Like

Of course most if not all service jobs use tools of varying degrees of complexity. You probably have not seen what is a common sight in Portugal, workers building cobblestone sidewalks stone by stone with the help of a hammer. Then they finish the job by spreading sand on it to fill the gaps.

Then there are more decorative version of pedra portuguesa.

Great for solving the unemployment problem for lower skill workers.

The Captain

lots of lovely pavements

5 Likes

First you say lower skill…but then later wikipedia says they are hired for their skill

Mike

3 Likes

“Lower skill workers” may be defined (by some) as those who work with their hands (i.e. manual workers) v. intellectual work (e.g. someone who works in IT, etc.)?

Pete

Not me (just wanted to get that on the record).

1 Like

I don’t believe anyone with a brain says that! Do you have a link?

JimA

Lionel Messi is very skillful at scoring goals. Would you hire him to pave sidewalks? What’s your working definition of the word ‘skill?’

How about ‘value creation,’ the amount of money you get paid for it?

The Captain

2 Likes

Not unless he is pretty good at it. People can have more than one skill.

My working definition of skill relates to the task. If it takes more than 5 minutes of instruction and more than 2 or 3 attempts at the task to get an acceptable result, the task probably requires skill.

Or if the task is one that not many people can do well, it’s also a skilled task.

So both laying pavement and playing soccer are skilled tasks. Cleaning a toilet, not so much. Yes, a skilled person can probably clean toilets quicker, but even a novice can get an acceptable result in less than a day. So I’d put that in the unskilled labor category.

2 Likes

It takes a special talent to embrace toilet, and other cleaning, to be able to do it well and quickly all day long.

Mom and Dad made certain I acquired the skill,

david fb

3 Likes

Is it a special talent, or a deficit in olfactory senses? :rofl:

Seriously, I call it perseverance - sticking with a task despite its unpleasantness. There are few with as much perseverance as those who labor at unpleasant and often less skilled jobs. The older I get, the more respect I have for those folks.

Raising a child didn’t hurt, either. There is nothing quite like the job of cleaning up after an infant to teach you a bit of humility (and the ability to ignore your nose).

–Peter

1 Like

You made me post this…I was overcome by an “irresistible impulse”.

5 Likes

I had arrogant employees that would try to make fun of the employees that cleaned our facilities. I assured them that they better treat them with respect, because if they quit we will have to clean the restrooms ourselves or be content using a dirty restroom.

1 Like

Marketing distorts the market. Makes us more than dirt farmers.

“It takes a special talent to embrace toilet”

Jack and coke in excess quantities. Not only embrace, but make offerings the the porcelain god.

Cheers
Qazulight

3 Likes