Longshoremen dig their heels in, hoping for higher wages and no competition from robots

Stocks edged higher yesterday as traders remain on edge about the powder keg building in the Middle East. A private employment report issued by ADP hinted at a stronger than expected jobs market, which should be celebrated, but won’t until the official Government report is out of the way; that comes on Friday.

The risk of extinction. Can you feel it? The world as we know it is changing. When I was still in short pants, my kitchen was at the zenith of style. It was adorned with yellow walls, a breakfast bar complete with yellow Formica counter tops, orange cabinets, and lights with orange-colored, Lucite shades which looked like they were invented by NASA. Back then, no modern kitchen was complete without a telephone attached to the wall. We had a yellow one right at the top of the stairs between the family room (which some folks called a rec room back then) and our dining room. That yellow telephone was the most technologically advanced piece of equipment in our house, if you didn't count the black and white TV.

Life was simple in those days, but we had choices. We could read the newspaper or sit down and watch whatever was broadcasting on one of the six channels on the television. Oh sorry, there was a stereo, complete with a record player, too. My father was a scientist, and on most nights after we were finished with dinner, the table was cleared, and my father would lay out vast technical drawings across it. Ever-present was his slide rule and a notebook designed specifically for solving math equations. As he worked late into the night, one of us was invariably on the yellow telephone with its chord stretched out nearly, what seemed to be, 20 feet in order to gain privacy.

I know, I know, there is something quite quaint about it. Many days, I wish we could have just captured those simple, but fulfilling times, and pressed pause. But things started to change rapidly. I can remember when my father brought home his first Hewlett Packard calculator. He borrowed it from the lab as they only had one for his whole department to use because it was so expensive. I took it upon myself to learn how to use it because I was intrigued by it. It was fun for me, but it was vital for my father’s work as it soon took the place of his notebook and slide rule. Eventually he earned his very own calculator, and his slide rule ended up tucked away in its leather case in my bottom desk drawer. His new calculator allowed him to create a small program for repetitive tasks and stored them on a 2-inched piece of magnetic tape. No one in my entire neighborhood had ever seen such a thing. Things really sped up after that. Soon he started to log in to a central computer with a terminal. Then came his first computer. Somewhere in that sequence came our first color TV. At that point my father stopped wearing neckties to the lab and he began spending hours in front of his computer. That became the norm as more and more technology came not only into his work life but our home. We embraced technology.

Many years later,  a company called Software Arts released a program called VisiCalc. It was the first commercially available spreadsheet program. This led the way for the software package Lotus 1-2-3, which was more broadly adapted by the business community, BUT NOT ALL OF IT. You see some folks still preferred to use ledger paper and adding machines with paper tape. Those same folks decided to pass on the use of Facsimile machines in favor of the postal system and bicycle messengers. It didn’t take long for those resistors of change to become extinct. A single person could be as productive as several non-technical people, and more accurate to boot. Imagine, if rather than resisting, those luddites would have embraced technology.

This brings me to today. The Longshoreman’s union is striking with vigor. They are fighting for not just a wage increase but also to halt the progress of technology. Fighting for higher wages or better working conditions is understandable, because everyone wants those. But technology; that is where it gets tricky. You see, ports across Europe and Asia employ more technology like robots and automation to get jobs done more efficiently, and dockworkers don’t want to see the same happen here. You see, they do not want to be replaced by machines. Their fear is understandable, but their resistance to it is futile, because rational firms would not forego the potential to become more profitable and risk sure death. This touches on a broader theme which has become quite prevalent recently as Artificial Intelligence, more commonly known as AI, has become all the rage. There are many ominous reports of how AI will take over jobs of highly paid, skilled workers. It sounds scary on the surface. But there is a choice. Those skilled workers could embrace the technology and remain competitive.

I can’t speak for what a fair wage for a dockworker is, and the strikers may succeed in getting their raises. However, their hopes of freezing technology in time will likely be dashed. If they are successful in getting companies to shun technology, those companies run the risk of being put out of business, in which case workers will not only forfeit their raises, but their jobs altogether. Imagine if my father decided to protest the advent of the calculator and computer for fear that someone else would take his job? He didn’t and he went on to have a long and successful career. Don’t be a luddite. Don’t fight the waves, learn how to ride them. No one is saying that you have to give up your record player but carrying all those vinyl records to your friend’s house to listen to music, while quaint and reminiscent of the days gone by, can be tiresome, if not bad for your back.

YESTERDAY’S MARKETS

NEXT UP

• Initial Jobless Claims (Sept 28^th) is expected to come in at 221k, slightly higher than last week's 218k claims.
• Factory Orders (August) may have gained by +0.1% after an increase of +5.0% in July.
• ISM Services Index (Sept) probably climbed to 51.7 from 51.5.
• Fed speakers today: Schmid, Williams, and Kashkari.

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