The cost of man and machine labor in 21-st century

In this case study we will examine some of the complex relationships within labor costs, energy costs, and modern industry. This will allow us a deeper understanding of where some of the operating costs come from within different types of industry. For this report it is hopeful that the causes of some recent trends such as automation leading to job displacement will become clearer along with an understanding of the role energy prices play in our modern economic system. From this analysis we see that manual labor, if it can be automated, is significantly more costly compared to the running costs of a machine. This helps explain the push for automation in many industries. People tend to focus mainly on labor costs and forget the impacts that energy can have on a market or industry. Analyzing the contribution of energy costs to the final price of a product allows us to see that energy costs are very significant in raw materials, transport, and processing. Earlier steps in the production process are more energy intensive and they are easy to overlook. These earlier steps compound the energy costs into the final price of a product. The energy prices trickle down into the prices of everything around us; there is no industry that is completely unaffected.