With the low interest available to business is the FED providing to employers a means to replace their workers with the cheap money? Isn't this against the FEDs own employment drivers?

Is The Fed Helping Robots Find Jobs?


Rise of the Robots

“Robots are taking over,” says a friend.
“They began by doing the simplest, lowest wage jobs. But they were competing with very low-paid workers. So employers wouldn’t pay much for them. But now they’re getting a lot more sophisticated. This is where it gets interesting.”

When you buy a robot to replace a human employee, what you’re really doing is capitalizing the cost of the employee. Let’s say an employee earns $50,000 a year. You have to figure that you spend another $25,000 a year on benefits, a personnel office, lawsuits, counseling, management issues, health care, holidays, a desk, a phone. So you have a total cost of $75,000. And he’s working only eight hours a day, five days a week.

“In a normal world, with a cost of capital at 5%, and an amortization period of 10 years for the robot, you could afford to spend about half a million (I’m not doing the math. I’m just guessing).

“But here’s the point: As you go up the income ladder, you can spend a lot more. If you can replace a guy who earns $100,000 a year, you can pay $1 million… and so forth.”

Dumping Workers

As robots get more sophisticated, it’s a matter of time until most people who do routine and not-so-routine work will be replaced. Robots don’t complain when they get pinched on the derriere by a frisky manager.
They work nights without grumbling or overtime. They don’t call in sick. They don’t care if there’s a home game. They don’t make excuses when they run over an elderly blind woman with the company truck.
“And guess what?” continued our friend.

“The feds say they are stimulating the economy and aiding employment with their ultra-low rates. But what they’re really doing is helping robots find jobs.

“As the cost of capital goes down, the relative cost of capital, as opposed to labor, also goes down. You can’t capitalize an employee. At least, not since slavery was abolished.