Throughout the United States, there were approximately 12.3 million industrial workers in 2016. Compared to 2000 however, the number was 20 million. There is a steady decline in industrial workers in the U.S for two primary reasons: outsourcing and robots. Companies are choosing to outsource their labor to foreign countries whose wages are far lower than the average U.S wage of $11.93/hour for factory work. At the same time, technology is advancing to the point that robots can replace people in this line of work, leaving many without a stable income. I want to focus on the latter, as I recently saw a presentation at my school about robots in industry. At the cheapest, industrial robots cost around $100,000 which averages out to $11.40/hour, only a penny more than a human. On top of this, these robots don’t require breaks and can be twice as efficient as a human. This makes companies lose the incentive to hire actual humans and provide jobs for the working class. However, if all companies switch to robots, not only will it cause people to loose their jobs, it will also create a greater demand for said robots, thus increasing the price as a result of supply and demand. Another scenario is where the government, trying to protect worker’s jobs, forces a tax on robots to minimize the incentive to use them. Regardless, the industrial field is undergoing huge changes that will affect the lives of millions of people.
Now that we’ve described the issue, lets look at a matrix model of one scenario:
|Hire Humans (0)||Hire Mix (1)||Hire Robots (2)||The goal for companies is to spend the least amount of money, shown by the numbers in terms of USD||If both strategies grant the same amount of money, the preferred outcome is the one that||gives the other player the least amount of money.|
|Hire Humans (0)||(11.39,11.39)||(11.39, 7.60)||(11.39, 5.70)||$11.39 = Minimum wage for human|
|Company A||Hire Mix (1)||(7.60, 11.39)||(7.60,7.60)||(11.395, 8.55)||$11.395 = Average of humans and robots|
|Hire Robots (2)||(5.70, 11.39)||(8.55, 11.395)||(11.40, 11.40)||$11.40 = Minimum wage for robots||I divided by efficiency for my values, but then multiplied a tax if a column met the requirement|
|50% tax = Supply and Demand||If robot value > 2, add 50% tax; if robot value > 3, add 100% tax|
|Assume the robots are 2.0x more efficient than a human||100% tax = S&D and government intervention|
|Thus, a mix of humans and robots would grant 1.5x efficiency||(#) = Robot value; add both numbers to get robot value for strategy|
To solve this game, one must first look to see if there are any dominating strategies. Immediately we see that both companies would prefer to hire a mix of robots than only humans, meaning Strategy Mix dominates Strategy Human for both companies. Editing the matrix, the game now looks like this:
|Hire Mix (1)||Hire Robots (2)|
|Company A||Hire Mix (1)||(7.60,7.60)||(11.395,8.55)|
This game might look familiar, as now resembles the Prisoner’s Dilemma, where the companies can either cooperate by both hiring a mix of robots and humans, or they can try and defect and cause the opposing company to suffer. While the Prisoner’s Dilemma already ensures cooperation is the best strategy, this scenario expands on that, as both companies avoid extra taxes if they hire a mix and it results in the lowest amount of spending for both players. Thus, the final best strategy would be for both companies to hire a mix of humans and machines.
Now why is this important? Yes, there are certain drawbacks to not making industry completely robotic, but there are more severe consequences as a result. Not only would millions lose their jobs, the matrix game shows how even if companies make the switch, there will be taxes on robots to try and protect the jobs of these workers, thus making the whole switch less profitable. The importance of this game is that companies shouldn’t avoid the use of robots in industry, but they should also be conscious of the workers who depend on these jobs to make a living. By having a balance between man and machine, we can not only look to expand the future, but be thankful we didn’t have to sacrifice lives in the present to achieve it.