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 by Kevin Jack, Deputy Director
“Post-pandemic, there are a lot of jobs that people have decided they don’t want to do.”
Jeff Burnstein, president, Association for Advancing Automation
“Robots in the coming years will increasingly work in supermarkets, clinics, social care and much more.”
“The Economist,” Feb. 26, 2022
One labor market legacy of the COVID-19 pandemic is the increased use of automation across a wide range of industries in the U.S. The proliferation of automation across industries is seen, in part, as a reaction to hiring difficulties brought on by the sharp drop in labor force participation attributable to the pandemic. It also reflects the great advances in artificial intelligence, machine learning, and other technologies that have rapidly transformed the workplace. In other words, more automation happening in part reflects more automation being possible.
Another factor that contributes to more automation in the workplace is the sharp rise in wages, which, like the decline in labor force levels, is attributable to the pandemic. Anxious employers bid up pay levels as they competed to attract scarce workers and retain current staff. The annual average private sector wage in the U.S. grew by 8.5% in 2020 and by 5.9% in 2021. Those are the two largest year-over-year gains on record going back to 2001.
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Rise of the Robots
One aspect of the automation revolution that gets the lion’s share of attention is the rapidly growing use of robots. Industrial robots, designed to work independently of humans, remain stationary, perform repetitive tasks efficiently, work for long periods of time, and reduce labor costs, have long dominated the automation landscape. However, a new generation of machines, known as “cobots” (short for “collaborative robots”), has emerged. Cobots are designed to work closely with and assist humans. Many are capable of learning multiple tasks.
Accordingly, the type of work performed by robots also has changed over time. Where once they were largely found on factory floors and only performed industrial tasks like welding or painting autos, the new generation of cobots (also known as “service robots”) has moved into our homes and non-factory workplaces. Cobots perform many varied tasks, like deliver pizzas, fold laundry, perform COVID-19 testing, unload delivery trucks, flip hamburgers at fast food restaurants, and spray fertilizer and pesticides on farms.
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Several fast-food chains, including White Castle, Chipotle, and Jack in the Box, are experimenting with a robotic arm that can fry foods. The robot, called Flippy 2, is manufactured by California-based Miso Robotics. It uses software, cameras, and sensors to identify the food and cooking instructions. Miso charges $3,000/month for Flippy 2, after a $10,000 shipping and installation charge. The company estimates the robot can save a typical restaurant $2,000 to $3,000 per month in labor and food costs. In another example, the Walgreens pharmacy chain uses service robots to stock automated, centralized drug refill centers. The company says the new centers can cut pharmacists’ workloads by at least 25%. It is intended to free up pharmacists’ time to provide more medical services (e.g., distribute vaccinations, perform patient outreach) and will save the company more than $1 billion annually.
Experts think that robots will play a growing role in critical areas that face ongoing labor shortages, such as the senior care industry. In 2022, tech company Labrador Systems announced the rollout of its new assistive robots that will help senior citizens and others who need assistance with tasks of daily life. Their technology could be transformative for elder care, as the supply of family caregivers is unlikely to keep up with a growing elderly population. The number of people age 65 and older in the U.S. is projected to grow by more than 25 million, or 43%, by 2050, according to the U.S. Census Bureau.
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Why More Robots?
Researchers have identified several factors that contribute to the recent explosive growth in the use of robots in the workplace. The first is an aging workforce. As a nation’s population gets older, a smaller share of it is likely to participate in the labor force. The resulting worker shortage drives up the price of labor, which results in more industries turning to robots. Census notes that 2030 will mark a demographic turning point, as all Baby Boomers will be older than 65. This will expand the size of the older population such that one in every five Americans will be of retirement age.
The second factor is the ever-increasing abilities of robots. Today’s cobots are smarter, smaller, and more flexible than the stationary industrial robots that preceded them. The growing focus on automation in the workplace will likely tap into this trend and further boost the demand for cobots.
The final contributing factor is a combination of the first two. As labor becomes more expensive, and robots can perform more tasks, the amount of time it takes a new robot to pay for itself shrinks.
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Will Robots Take Our Jobs?
One of the biggest debates surrounding the growing use of robots in the workplace is its net impact on overall job levels. Increased use of technology, including robots, has two impacts on employment. The first one, called the “displacement effect,” refers to losses in jobs when robots (and other technology) can complete tasks formerly done by workers. The second impact, called the “productivity effect,” is the gain in jobs that stem from making tasks easier to complete or creating new jobs and tasks for workers.
According to research conducted by Dr. Lynn Wu at the Wharton School, robots are not replacing workers. She found that “While there is some loss of jobs when firms adopt robots, increased automation leads to more new hires overall. That’s because robot-adopting firms become so much more productive that they need more people to meet the increased demand in production.”
Economists Jeff Borland and Michael Coelli at the University of Melbourne in Australia also found that the adoption of robots leads to a net employment gain. “Technological change does not have a long-run effect on aggregate employment,” they concluded, “because, although it may cause jobs to be destroyed, it has also always meant the creation of extra and new jobs.”
Looking Ahead
Automation, especially through the use of robots, is transforming the U.S. labor market. As we continue to make breakthroughs in the field of robotics, it is clear that robots are here to stay. Our daily interaction with them will take many forms, whether they serve dinner at your favorite restaurant, deliver food to your kid’s college dorm, or drive your taxi. One tech analyst foresees that “robots will be merged into the fabric of day-to-day life as smartphones are today.” With robots on the rise in the workplace, their continuing impact on the labor market will be a critical economic factor over the next few decades.
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  by Christian Harris, Labor Market Analyst, Southern Tier
“The DRI program has helped Southern Tier communities to focus their economic planning efforts.”
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New York's Downtown Revitalization Initiative (DRI) is a cornerstone of the State's economic development program. The DRI is a grant program designed to transform downtown neighborhoods into vibrant centers that offer a high quality of life and are magnets for redevelopment, business, job creation, and economic and housing diversity. Here, we take a look at the DRI and the six Southern Tier communities that have received funding under its auspices since 2016.
Nuts and Bolts
The DRI is led by the Department of State in close partnership with several other agencies. Under the provisions of the DRI program, communities submit applications to their Regional Economic Development Council (REDC). In turn, REDCs in each of the state’s ten regions select one community each year to participate in the program after a thorough evaluation of the downtown’s potential for transformation. Successful communities receive a $10 million award.
With technical assistance provided by the State, each participating community develops a Strategic Investment Plan that identifies specific projects aligned with a unique vision for revitalization of the downtown area. Local planning committees oversee the effort.
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Award-Winning Communities
In the inaugural round of the DRI competition (2016-17), the City of Elmira (Chemung County) received the Southern Tier’s first $10 million award. The city identified 14 projects that would “establish a walkable urban center/downtown” and “connect downtown to adjacent neighborhoods.” Elmira’s largest project, by cost, is a mixed-use development on West Water Street, which opened in 2020. The four-story building offers 51 luxury apartments with commercial space on the first floor.
In 2017-18, Watkins Glen (Schuyler County) earned the region’s second DRI award. The goals of the village’s proposal were to expand “downtown living” offerings, bolster “culture and entertainment” options, promote “economic development” in the village and build out “quality of life” experiences. In total, 17 projects were proposed by Watkins Glen. Like Elmira, Watkins Glen’s most expensive project is a mixed-use structure. The three-story building planned for North Franklin Street. will house both apartments and business space.
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The third round of the DRI in 2018-19 saw the Village of Owego (Tioga County) submit the region’s winning entry. The village earmarked 22 projects that align with a number of main goals including: maximizing the “downtown experience” by fostering more “recreation” and “arts and culture,” improving “infrastructure,” strengthening “housing and neighborhoods,” and supporting “economic development.” Among Owego’s projects, the village hopes to construct a Neighborhood Depot building to house several charitable organizations. The “non-profit hub” would assist organizations in sharing common costs and offer conference and training space.
In 2019-20, the City of Hornell (Steuben County) was the region’s successful applicant. The municipality identified 22 projects that fit into four overarching goals. Hornell hopes to expand “city living” options and overall downtown “vibrancy,” while “preserving” the historic character of the city. In addition, projects were targeted to improve the “public realm” by building out people-friendly public spaces. The city’s marquee project is a $5 million “Learning and Training Center,” which would be home to the various workforce training entities throughout the region.
The COVID-19 pandemic led to a pause in the DRI program in 2020-21. The initiative resumed in 2021-22, and the State awarded grants to two communities in each region to catch up from the prior year’s pause. The Southern Tier region’s two awardees in 2020-21 were the Village of Endicott (Broome County) and the City of Norwich (Chenango County).
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Endicott’s DRI application highlighted 13 projects selected to “foster the high-tech business environment,” “strengthen connectivity between the Downtown Core and surrounding neighborhoods,” “provide downtown amenities,” and “create a mixed-use district” that would bolster downtown living. The plan highlighted a project to transform a former K-Mart into a warehouse and distribution facility for Green Mountain Electric Supply—an electrical equipment and material retailer—that would serve the company’s 11 retail locations in New York and one in Pennsylvania.
The City of Norwich’s plan identified 15 projects intended to support the city’s four main goals: “make downtown Norwich attractive to and supportive of a diverse population,” “create a vibrant, safe, and welcoming downtown environment,” “make Norwich a regional destination for arts, cultural, and recreational tourism,” and “create a thriving and supportive downtown business climate.” The city’s most costly project is a new, 45-room boutique hotel. The hotel would help Norwich unlock more tourist and business events by increasing overnight stay offerings.
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Looking Ahead
The DRI program has brought together community members in a powerful way since its inception in 2016. It has helped a number of Southern Tier communities to focus their economic planning efforts and provided the necessary funds to make those plans a reality. With the help of New York State’s Downtown Revitalization Initiative, many more Southern Tier communities stand to transform their economies in a meaningful way in the years to come.
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 In December 2022, New York State’s seasonally adjusted private sector job count increased by 22,100, or 0.3%, to 8,105,700. In addition, the state’s seasonally adjusted unemployment rate held steady at 4.3% in December, while New York’s seasonally adjusted labor force participation rate held steady at 60.5%.
Capital
Over the past year, the private sector job count in the Capital Region rose by 8,800, or 2.1%, to 433,700 in December 2022. Job gains were largest in educational and health services (+3,600), professional and business services (+2,500), leisure and hospitality (+2,100), natural resources, mining and construction (+1,500) and other services (+1,100). Job losses were focused in manufacturing (-1,400) and trade, transportation and utilities (-600).
Central New York
The number of private sector jobs in the Syracuse metro area increased over the past year by 5,300, or 2.1%, to 256,800 in December 2022. Over-the-year employment gains were greatest in trade, transportation and utilities (+1,900), leisure and hospitality (+1,400), financial activities (+800), other services (+500), professional and business services (+400) and natural resources, mining and construction (+300).
Finger Lakes
From December 2021 to December 2022, the private sector job count in the Rochester metro area rose by 5,300, or 1.2%, to 447,900. Job gains were greatest in educational and health services (+3,400), natural resources, mining and construction (+1,300), professional and business services (+1,300), manufacturing (+1,100) and other services (+800). Over-the-year losses were greatest in trade, transportation and utilities (-2,400).
Hudson Valley
Over the past year, the number of private sector jobs in the Hudson Valley grew by 23,400, or 3.0%, to 798,300 in December 2022. The largest job gains occurred in educational and health services (+10,400), leisure and hospitality (+6,300), natural resources, mining and construction (+3,700), professional and business services (+3,600) and other services (+2,500). The greatest losses were in trade, transportation and utilities (-1,600) and financial activities (-800).
Long Island
For the year ending December 2022, private sector jobs on Long Island increased by 15,200, or 1.4%, to 1,125,200. Job gains were largest in leisure and hospitality (+9,000), professional and business services (+4,000), educational and health services (+2,800), other services (+2,500) and natural resources, mining and construction (+700). Employment losses were greatest in financial activities (-3,500) and manufacturing (-300).
Mohawk Valley
For the 12-month period ending December 2022, the number of private sector jobs in the Mohawk Valley region rose by 2,300, or 1.7%, to 140,500. Over-the-year employment gains were greatest in educational and health services (+700), leisure and hospitality (+700), trade, transportation and utilities (+400), other services (+300) and natural resources, mining and construction (+200).
New York City
The private sector job count in New York City rose over the past year by 199,200, or 5.1%, to 4,067,500 in December 2022. Job gains were greatest in educational and health services (+63,300), leisure and hospitality (+47,900), professional and business services (+42,800), other services (+13,100), financial activities (+10,800), information (+9,300), trade, transportation and utilities (+5,300) and natural resources, mining and construction (+4,200).
North Country
For the 12-month period ending December 2022, the private sector job count in the North Country region rose by 900, or 0.9%, to 106,600. Employment gains were largest in leisure and hospitality (+700), natural resources, mining and construction (+400) and educational and health services (+300). Over-the-year job losses were focused in trade, transportation and utilities (-700).
Southern Tier
For the 12-month period ending December 2022, the number of private sector jobs in the Southern Tier region increased by 3,400, or 1.6%, to 215,800. Over-the-year employment gains were greatest in educational and health services (+1,400), leisure and hospitality (+1,000), professional and business services (+700) and financial activities (+400). Job losses occurred in information (-900).
Western New York
Over the past year, the private sector job count in the Buffalo-Niagara Falls metro area rose by 12,900, or 2.9%, to 462,700 in December 2022. Job gains were greatest in educational and health services (+4,100), leisure and hospitality (+2,700), trade, transportation and utilities (+1,900), manufacturing (+1,400), other services (+1,300), natural resources, mining and construction (+800) and professional and business services (+700). Employment losses occurred in information (-200).
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