While the announcement of a retail concept without a checkout counter set the tech world abuzz; others were asking how this development would impact the labor market in the future. According to author and technologist, Martin Ford, Amazon Go ‘as not about reducing labor costs’. In fact, the concept could prove disruptive.
Amazon Go, which intends to test at a Seattle location has no registers and most of the stocking and replenishment would be conducted by robots and not people. While the concept is a godsend for people who hate standing in line, economists are asking deeper questions on what this means for the future of work.
A report released by the Council of Economic Advisers earlier this year found that nearly 83% of all workers making less than $20 per hour will see their jobs replaced by technology. Those making upwards of $40 per hour are somewhat safer, but the Council estimates that 31% of those making between $20 and $40 per hour will face disruption. The percentage falls to 4% for those making more than $40 per hour, but the report does not address a potential cutback in hours worked across the board.
These figures have signaled alarm bells as most economists and policy makers lack the tools to adequately measure how technology is disrupting the labor market. Some experts believe this was one reason for the popular anger which impacted this year’s election.
With regards to Amazon Go, the company has only announced plans for a test store and it is unclear how ambitious plans are to expand. But Mr. Ford, who authored “Rise of the Robots: Technology and the Threat of a Jobless Future”, believes the utilization of technology to increase productivity, and profits is part of capitalism. He points to data from the Government, which show that manufacturing jobs are disappearing and that service sector jobs may be next on the chopping block.
In an effort to protect jobs, an IDC report predicted that robot-specific regulations will begin to be implemented by 2019 or sooner. But it is unlikely that this technology will slow developments in the underlying technology which is disrupting the current job market.
Amazon has said little publicly on what their retail store mean for job disruption and in fairness to the retail concept is still very much in the planning stage. However, the crux of the problem is this: does building a retail network without jobs, help support the customer base which is needed to keep the retail network functioning? It is unclear how this will work out and as companies like Amazon increasingly support disruptive technologies they will have to answer these questions.