How a Tennis Player and a Longshoreman Are Similar

It is tough to say no to automation. But there is a tradeoff.

Tennis Automation

Wimbledon decided next year’s tennis matches will have no line judges. Instead ELC (Electronic Line Calling) will replace a 147-year tradition and 300 line judges will lose their jobs. In addition, players will no longer be able to direct their wrath on a referee. So yes, we will have more accuracy. But do we lose a side of tennis that provided its personality?

Port Automation

Somewhat similarly, automation remains an issue for the East and Gulf Coast longshoremen. When they agreed to return to work after a brief strike because management promised a wage boost, still they have not settled how much the ports will be automated. Again, we can assume that like the invention of the “box” (the shipping container) efficiency will increase. But a recent report from the UCLA Labor Center told us how to sidestep the pressures of automation:

• They believed that inadequate government investment and elevated emissions standards would compromise the port’s competitiveness.
• Instead of automation, the report suggested longer hours of operation and more standardization among existing ports.
• They doubted that the “conventional wisdom” about the benefits of automation was inaccurate. They did not think that automation was safer, cheaper, or more efficient.
• They predicted that automation would have unexpected consequences that related to the supply chain and safety risks.
• They worried that job loss would harm a thriving community.

By contrast, an article from Michigan State University expressed a positive opinion of automation:

• They tell readers that automation will reduce the time that ships spend in port and increase their revenue.
• Furthermore, U.S. ports will feel the pressure to automate in order to remain competitive with foreign ports.
• However, at $500 million to $1 billion, the initial cost is high. Consequently, only if the port is large will the investment pay off.
• In addition, with the need for labor nosediving by 50%, subsequent savings rise while risk and human error diminish.
• Weighing all the facts, the article concludes that “… it appears to be more a matter of when, not if, automation becomes a top priority.”

If indeed automation is inevitable, we can look back at the steam engine for a precedent. With the spread of steam power in 19th century France, mechanization spurred considerable alarm. However, scholars concluded that steam-adopting industries hired 94% more workers and elevated wages 5%.

Our Bottom Line: Human Capital

One of the three factors of production–land, labor, and capital–from which we make all goods and services, capital can be divided into physical and human capital. Like the machines that compose physical capital, human capital can grow. For machines, it involves installing more of them in a factory. With human capital, it is more knowledge. Fundamentally, automation is about the balance between physical and human capital. When a tennis tournament or a port automates, it replaces labor with physical capital and thereby changes what labor needs to know.

My sources and more: Everywhere, articles described the Wimbledon decision but this NY Times discussion had the practical and human sides. Correspondingly, for the LA Port’s automation study, the overview and report were here and here while the opposing view was here and here. And finally, for the historical perspective, this article was excellent. (Among its examples were the NYC tailors that threatened to strike in 1850 if their employer used sewing machines.)