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What Happens When Robots Take Service Jobs?

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Baxter, created by Rethink Robotics, is a robot capable of working in manufacturing, but may soon be able to work at Starbucks or McDonald's. Should human employees be worried?

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Meet Baxter, the latest humanoid robot from Rethink Robotics – and get comfortable with him because you'll likely be seeing more of him soon.

Rethink Robotics released Baxter last fall and received an overwhelming response from the manufacturing industry, selling out of their production capacity through April. He's cheap to buy ($22,000), easy to train, and can safely work side-by-side with humans. He's just what factories need to make their assembly lines more efficient – and yes, to replace costly human workers.

But manufacturing is only the beginning.

This April, Rethink will launch a software platform that will allow Baxter to do a more complex sequencing of tasks – for example, picking up a part, holding it in front of an inspection station and receiving a signal to place it in a "good" or "not good" pile. The company is also releasing a software development kit soon that will allow third parties – like university robotics researchers – to create applications for Baxter.

These third parties "are going to do all sorts of stuff we haven't envisioned," says Scott Eckert, CEO of Rethink Robotics. He envisions something similar to Apple's (NASDAQ:AAPL) app store happening for Baxter. A spiffed-up version of the robot could soon be seen flipping burgers at McDonald's (NYSE:MCD), folding t-shirts at Gap (NYSE:GPS), or pouring coffee at Starbucks (NASDAQ:SBUX).

"Could [Baxter] be a barista?" asks Eckert. "It's not a target market, but it's something that's pretty repeatable. Put a cup in, push a button, espresso comes out, etc. There are simple repeatable service tasks that Baxter could do over time."

Companies might not need to wait for a more advanced version of Baxter – MIT already has a BakeBot that can read recipes, whip together cookie dough and place it in the oven. The University of California at Berkeley has a robot that can do laundry and fold T-shirts. Robot servers have started waiting tables at restaurants in Japan, South Korea, China and Thailand – and just last week, a robot served Passover matzah to President Obama during his trip to Israel.

"Every year, machines are getting more capable of doing low-level tasks," says Professor Seth Teller, a robotics researcher at MIT's Computer Science and Artificial Intelligence Lab.

The Great Job Transformation

Many experts worry about what robots in the service sector could do to employment. The national unemployment rate remains at 7.7 percent – not remotely close to the 4.7 percent unemployment in 2007 before the recession. Job growth isn't expected to return to pre-recession levels until 2017, and the recent sequestration could easily derail it. Manufacturing has already shed nearly 6 million jobs since 2000.

"When machines and robots start taking over service sector jobs, that's when we'll really start to notice," says Martin Ford, robotics expert and author of The Lights In the Tunnel: Automation, Accelerating Technology and the Economy of the Future. "If you're making hamburgers or Starbucks drinks, that's really just high manufacturing."

What's worrisome to Ford is that these jobs have been offering a huge safety net to the middle class. They're jobs he calls "the jobs of last resort." When someone can't find a salaried job, they look for lower-paying service jobs to get by – and because the jobs typically have a high turnover rate, they're more likely to be available. Think of all the college graduates who take jobs as cashiers or baristas before they find salaried work. If those jobs were to vanish, those workers would be forced to file for unemployment instead.

Retail and service industries are the largest employers in the U.S., accounting for nearly 20 percent of total employment in 2011, according to the latest data available from the BLS. The retail sector employs nearly 14.8 million people, with Wal-Mart (NYSE:WMT) employing 10 percent of them. On top of that, one in five retail workers are the sole income earners in their household. The U.S. restaurant industry employs 9.5 million people, and nearly 50 percent of all adults have worked in the restaurant industry at some point in their life, according to a 2012 report from the Workforce Strategies Initiative at the Aspen Institute. Compare these numbers to the tech job "boom" at companies like Facebook (NASDAQ:FB), Apple, Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG) – and you get a mere 190,000 people.
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