Does Automation Automatically Result In Employee Reduction?


In the year 1779, a weaver in England named Ned Ludd, lost his cool and smashed two knitting frames in a fit of anger. Henceforth, whenever frames were sabotaged people would snicker and say "Ned Ludd did it!" 

30 years later in Nottinghamshire, a group of angry weavers assembled on the moors under the moon. The weavers were afraid they were going to be replaced by new technology, their plaids in a pickle. So as men sometimes do they got mad and raged against a bunch of threshing machines. The group was thusly dubbed the Luddites, after the tempestuous Ned Ludd. Little did these men know that they were about to go down in economic history. 

It's called the Luddite Fallacy. Tevjan Pettinger writes, "The Luddite Fallacy is the simple observation that new technology does not lead to higher overall unemployment in the economy. New technology doesn't destroy jobs - it only changes the composition of jobs in the economy." Pettinger adds, "over the past 100 - 200 years, new technology has enabled the economy to move towards a more service sector based economy."

Now some economists will debate this theory, but it's a perfect illustration of how technology can transform the labor of those who use it. ARCA's automation solutions will reduce ye olde mundane, repetitive tasks that face those who handle cash. This will free them to deliver more service to their customers. It makes their jobs better. 

Gilles Saint-Paul, Professor at the Paris School of Economics, developed a formula that states "the demand for unskilled human capital declines at a slower rate than the demand for skilled capital increases." Hmmm. Methinks he sayeth, the world increasingly needs skilled people. At ARCA, we're happy to help our customers meet the demand for their highly valuable skills.

To hear more about how the automation affects employees from ARCA's expert Jeff Hauser, take a look at the short video below.