Worker shortage gives U.S. reason to robotize

WASHINGTON, Feb 8 (Reuters Breakingviews) - The U.S. labor shortage isn’t going anywhere, at least according to U.S. Federal Reserve Chair Jerome Powell. If he’s right, companies are set to robotize.

Speaking at the Economic Club of Washington, D.C. on Tuesday afternoon, Powell noted that the dearth of available workers “almost feels more structural than cyclical.” There were nearly two job openings for every available worker in December, according to data from the U.S. Bureau of Labor Statistics on Feb. 1. Monthly quits, meanwhile, are up 19% from pre-pandemic levels as people jump from one job to another.

Companies keep lifting pay to attract applicants – Chipotle Mexican Grill (CMG.N) said Tuesday night it was being hit by high labor costs. But U.S employers are getting less on their investment. Worker productivity, measured as output per hour, fell last year and still sits below the late-2021 peak.

If the shortage is, in fact, structural, robots offer businesses an alternative to increasingly expensive labor. Mechanizing the workforce, like White Castle did with its robotic chef Flippy, can help businesses do the same work with fewer employees.

A burrito-rolling bot might not replace workers quite yet, but planning for it could be prudent amid the hiring rat race. (By Ben Winck)

Follow @Breakingviews on Twitter

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

Capital Calls - More concise insights on global finance:

Discovery flips script on Warner Bros deal logic read more

Chegg gets schooled in AI downside read more

Fertiliser boom reveals food security price power read more

SoftBank is paying for Son’s past exuberance read more

EV makers fill up on cash before looming pileup read more

Our Standards: The Thomson Reuters Trust Principles.