NOODLE MAKERS REPLACED WITH ROBOTS

Written By: Peter Murray
Posted: 04/19/13 8:15 AM

 

CHINESE RESTAURANT OWNER SAYS ROBOT NOODLE MAKER DOING “A GOOD JOB!”

[Source: arkazlive via YouTube]

Noodle peelers should probably start looking for other things to do around the kitchen – there’s just no competing with these robots. Not only are they saving restaurants in China money in wages, they can work rapidly and tirelessly for hours.

We reported on the robots, invented by restaurant owner Cui Runguan, last August. Now, we’re hearing from another restaurant owner who has had one of the robots in his “employ” for a month. How is the indefatigable noodle-maker working out at the Jinhe Noodle Shop in Beijing? The restaurant owner, with the last name Zhao, loves it and tells China’s state-run Xinhua News Agency that “It does a good job!”

Runguan’s robots peel noodle strips from a firm piece of dough and tosses them directly into boiling water “before diners’ eyes can follow the whole process.” To Zhao and a growing number of restaurant owners in China, choosing robots over human noodle cooks is a no-brainer. While a cook doing the same job would make about 40,000 yuan ($6,400) per year, the robot cost him just 10,000 yuan ($1,600). And no human chef can work so tirelessly.

China is expected to be the world’s largest market for robots by 2014 [Source: arkazlive via YouTube]

Its price is already down from $2,000 this past August, which is no doubt a big reason why more than 3,000 restaurants that have already relegated their noodle-making to the robot. As the technology improves and the cost to build and run the robot drops, business will only get better for Runguan, who has received four patents for the technology.

That humans can be replaced by robots that do the job faster and cheaper is an idea that now pervades Chinese employers. “Chinese companies usually start considering robots when the payment for a skilled worker exceeds 50,000 yuan ($8,060) a year,” Tan Xueke, a manager at the Xinsong Robot Automation Company in Shenynang,told Xinhua News Agency.

The repetitive action that goes into preparing certain foods such as noodles makes automation an obvious choice. In Japan robots are already being used to make sushi, and a robot in San Francisco can serve up 340 hamburgers an hour. But while robotic cooks provide restaurants a novelty for customers and savings for owners, other robots are invading China’s workplace on a much grander scale. Most notably is Foxconn who, last November, began replacing 1 million jobs performed by humans with robotic automation. The metamorphosis is advancing quickly. In late February the company announced it put a freeze on hiring new entry-level workers. This was due in part to a high worker retention rate following pay increases, but it’s also a conscious decision to accelerate the automation of their factories.

And as prices for the robots drop, they’ll continue to invade the workplace at increasing an increasing pace. Already China is expected to become the world’s largest robot market next year. And as entry-level jobs become scarce, out-of-the-job workers such as those at Foxconn and Jinhe Noodle Shop will find the new reality hard to swallow.

[Source: Zoominuk via YouTube]

The Terrifying Reality of Long-Term Unemployment

 

It's an awful catch-22: employers won't hire you if you've been out of work for more than six months

MATTHEW O'BRIENAPR 13 2013, 11:48 AM ET

 

(Reuters)

Close your eyes and picture the scariest thing you can think of. Maybe it's a giant spider or a giant Stay Puft marshmallow man or something that's not even giant at all. Well, whatever it is, I guarantee it's not nearly as scary as thereal scariest thing in the world. That's long-term unemployment.

There are two labor markets nowadays. There's the market for people who have been out of work for less than six months, and the market for people who have been out of work longer. The former is working pretty normally, and the latter is horribly dysfunctional. That was the conclusion of recent research I highlighted a few months ago by Rand Ghayad, a visiting scholar at the Boston Fed and a PhD candidate in economics at Northeastern University, and William Dickens, a professor of economics at Northeastern University, that looked at Beveridge curves for different ages, industries, and education levels to see who the recovery is leaving behind.

Okay, so what is a Beveridge curve? Well, it just shows the relationship between job openings and unemployment. There should be a pretty stable relationship between the two, assuming the labor market isn't broken. The more openings there are, the less unemployment there should be. If that isn't true, if the Beveridge curve "shifts up" as more openings don't translate into less unemployment, then it might be a sign of "structural" unemployment. That is, the unemployed just might not have the right skills. Now, what Ghayad and Dickens found is that the Beveridge curves look normal across all ages, industries, and education levels, as long as you haven't been out of work for more than six months. But the curves shift up for everybody if you've been unemployed longer than six months. In other words, it doesn't matter whether you're young or old, a blue-collar or white-collar worker, or a high school or college grad; all that matters is how long you've been out of work.

Help Wanted -- If You've Been Out of Work for Less than Six Months

But just how bad is it for the long-term unemployed? Ghayad ran a follow-up field experiment to find out. In a new working paper, he sent out 4800 fictitious resumes to 600 job openings, with 3600 of them for fake unemployed people. Among those 3600, he varied how long they'd been out of work, how often they'd switched jobs, and whether they had any industry experience. Everything else was kept constant. The mocked-up resumes were all male, all had randomly-selected (and racially ambiguous) names, and all had similar education backgrounds. The question was which of them would get callbacks. 

It turns out long-term unemployment is much scarier than you could possibly imagine. 

The results are equal parts unsurprising and terrifying. Employers prefer applicants who haven't been out of work for very long, applicants who have industry experience, and applicants who haven't moved between jobs that much. But how long you've been out of work trumps those other factors. As you can see in the chart below from Ghayad's paper, people with relevant experience (red) who had been out of work for six months or longer got called back less than people without relevant experience (blue) who'd been out of work shorter. 

Look at that again. As long as you've been out of work for less than six months, you can get called back even if you don't have experience. But after you've been out of work for six months, it doesn't matter what experience you have. Quite literally. There's only a 2.12 percentage point difference in callback rates for the long-term unemployed with or without industry experience. That's compared to a 7.13 and 8.95 percentage point difference for the short-and-medium-term unemployed. This is what screening out the long-term unemployed looks like. In other words, the first thing employers look at is how long you've been out of work, and that's the only thing they look at if it's been six months or longer.

This penalty for long-term unemployment is unlike any other. As you can see in the chart below, job churn is another red flag for employers, but not nearly to the same extent. Applicants who'd gone through five to six jobs but had relevant experience were still more likely to get called back than those who'd gone through three to four jobs but didn't. And they had about as good a chance as those who'd only held one or two jobs but weren't experienced. In other words, there is no job-switching cliff like there is an unemployment cliff.

Long-term unemployment is a terrifying trap. Once you've been out of work for six months, there's little you can do to find work. Employers put you at the back of the jobs line, regardless of how strong the rest of your resume is. After all, they usually don't even look at it. 

Let's be clear. Ghayad's field study shows employers discriminate against the long-term unemployed. All of the fake resumes he sent out were basically identical. But firms ignored the ones from people who'd been out of work for six months or longer -- even when they had better credentials. Employers look at how long you've been unemployed as a better proxy for skills than anything else on your resume. In other words, more jobs-training probably won't help the long-term unemployed all that much. Even a stronger economy will only help them years in the future, rather than many years in the future. 

It's time for the government to start hiring the long-term unemployed. Or, at the least, start giving employers tax incentives to hire the long-term unemployed. The worst possible outcome for all of us is if the long-term unemployed become unemployable. That would permanently reduce our productive capacity. 

We can do better, and we need to start doing so now. We can't afford long-term thinking in either the short or the long-term.

 

MATTHEW O'BRIEN

Matthew O'Brien is an associate editor at The Atlantic covering business and economics. He has previously written for The New Republic.