Here's Why Kevin O'Leary Says Automation Leads To More Productivity, Higher Wages And More Jobs

Kevin O'Leary, aka “Mr. Wonderful” from Shark Tank, is making a bold case for automation – arguing it streamlines operations, boosts wages and creates jobs. In a recent Instagram post and a Fox Business interview, O'Leary doubled down on his belief that automation, especially at ports, leads to higher productivity and better pay for workers. 

O'Leary points to the current inefficiencies plaguing East Coast ports, particularly compared to their international counterparts in places like Singapore. He highlights how ports in Asia are light years ahead in terms of modernization and automation, which gives them a serious productivity edge. And it’s not just a minor difference, according to O’Leary – it's a productivity gap leaving the U.S. behind.

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"There's no evidence that automation hurts wages," O'Leary said on Instagram, explaining that when ports integrate advanced systems, it leads to better overall productivity. The result? Jobs that not only stay but also pay more. Employees trained to operate these robotic systems are in demand and can earn more as they gain new skills.

O'Leary's comments are particularly relevant as the International Longshoremen's Association (ILA) just temporarily called off a major dockworkers' strike that had shut Down East and Gulf Coast ports, halting billions in trade. The strike is on pause until mid-January, as negotiations continue. But O'Leary points to this situation as evidence of how outdated U.S. port infrastructure is compared to other countries.

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"If you look at ports on the East Coast and compare them to Singapore, we're losing out big time," O’Leary said on Varney & Co. He argues that these inefficiencies make U.S. ports less competitive globally, hurting everyone from businesses to consumers in the long run.

One of the biggest concerns during the strike was how automation could affect dockworkers. O’Leary doesn’t see this as a problem. He claims that studies on port automation have consistently shown no adverse impact on wages in the U.S., both on the East and West Coasts. He says the opposite is true: automation can increase wages for workers who learn to operate these new, sophisticated systems. He's optimistic that automation will create a wave of new jobs requiring higher skill levels, which means better pay for those workers who adapt.

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The reality of automation isn't as straightforward as Kevin O'Leary suggests. While it might reduce errors and cut costs, the overall impact on productivity is more complicated. A 2018 McKinsey report found that automated ports perform worse than traditional ones. McKinsey says automated ports "are generally less productive than their conventional counterparts." The report highlights that the massive investments in automation don't always yield the returns companies expect, especially without careful planning and management.

So, while automation has some upsides, it's not a magic fix for boosting efficiency or profits. It requires time, strategy and capital investment.

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The dockworkers’ strike ended last week after the U.S. Maritime Alliance (USMX) offered a massive 62% pay increase. While the strike is paused, the issue of automation in ports remains a hot topic. O’Leary believes that workers who embrace automation will come out on top as ports modernize.

His stance might seem controversial, especially to those who fear job losses from automation, but O'Leary is convinced that this is the way forward for productivity and growth. "We need to let automation take its course," O’Leary said, emphasizing that it's a tool for driving the economy forward, not a threat to workers.

For O’Leary, the future is clear: automation isn't going away and those who can adapt will find themselves in high demand, with bigger paychecks to match.

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