Update: Amazon denied that it had plans to open 2,000 grocery stores after this post was published.
There’s nothing wrong with profit or efficiency. If you’re in business, you probably have multiple reasons, but profit is a big one. Profit is how you pay yourself. It enables a company to offer more employment opportunities for more people. Investors see the results of profit, either as higher stock prices or dividends, and they spend and further invest the money, also indirectly creating jobs.
But like anything else, it needs context. All processes have limits. You don’t seek to keep inhaling without exhalation or eating without cessation and elimination. Processes are part of bigger systems and need to remain in balance.
Profit and operational efficiency are the same in a business. Money has to be reinvested into operations. Employees need to be paid and they, in turn, need to spend and invest to keep the whole of society humming along. Similarly, efficiency is good. You can let people work more effectively and even unload certain types of tasks to free employees to do activities more valuable to the company.
But what happens when you start to enable the dismissal of huge numbers? It’s been one of the concerns about robotics and artificial intelligence. The latest sign is Amazon’s plan to run automated grocery stores — eventually establishing 2,000 of them, according to the Wall Street Journal. Kroger, one of the grocery giants, has 2,600 stores.
[Update: As the Wall Street Journal reported today, Amazon said in a statement that it had “no plans to open 2,000 of anything. Not even close. We are still learning.” In addition, it denied plans to open stores that would be 30,000 to 40,000 square feet in size. Amazon would not expand on the statement. It could be that the company plans on opening automated stores on a schedule that would let it refine the concept. Even if Amazon doesn’t pursue this idea broadly at the present, the technology to automate and eliminate many jobs seems in place.]
The New York Post called this the next major job killer to face Americans. (And the rest of the world eventually.)
It also threatens countless jobs at grocery stores, which are the leading employers of cashiers and had 856,850 on their payrolls in May 2015, according to the latest figures from the federal Bureau of Labor Statistics.
Britt Beamer, president of America’s Research Group, a consumer-behavior research and consulting firm, estimated that Amazon’s cutting-edge technology had the potential to wipe out 75 percent of typical grocery-store staff.
“It’ll be a big job-killer,” Beamer said. “It’ll eliminate the cashier, it’ll get rid of the baggers, it’ll eliminate the stock clerks. This could be big.”
And given Amazon’s expertise in using robotics to stock products, you could probably add many of the other jobs in grocery stores.
Yes, there are some who argue that every technological revolution in the past has enabled the creation of different and better jobs and that innovation is the only way forward. Only, that isn’t exactly true. During the industrial revolution, people didn’t simply find their former livelihoods disappear and then go on to the next phase of their lives, as we think of it. This is how the Gilded Age and terrible human oppression and widespread poverty on a massive scale happened.
The only thing that eventually turned it around and created a more equitable and, ultimately, stable society was public unrest and pressure that eventually turned into legislation protecting workers, establishing concepts of minimum pay, and increasing workplace safety. But they came from bloody battles and riots as well as protests.
We’ve never experienced anything on the scale of massive job eliminations. Uber and others are experimenting with self-driving trucks, up until now another major source of employment. There’s been plenty of evidence that few types of jobs, including many white-collar ones, are safe from automation in its many forms. Not that all human activities need to be eliminated to cause a problem. If you reduce much of the world a group does, then you need far fewer to keep up with things. There aren’t a massive number of new jobs awaiting people to train for. High tech was supposed to be a massive employer as an example, but by its nature it leverages knowledge and data so the number of people needed to drive huge revenues is relatively small. There’s nothing to say assumptions that everything will work out is more than wishful thinking. The Great Depression had 25 percent of the population out of work. What happens when that number doubles? How do you provide relief?
There’s talk of perhaps instituting a basic income for everyone. But that seems financially unrealistic. There are roughly 319 million people in the country. The civilian labor force participation rate is about 63 percent, according to the Bureau of Labor Statistics. That’s 201 million people. Some academics have predicted that 40 percent of the jobs in this country could vanish within 20 years. That would mean 80.4 million people would be permanently out of work. Given that many have dependents, call a basic income $2,000 a month (and that seems woefully low). That’s $24,000 a year for a total of $1.9 trillion annually. The federal government’s annual income from taxes is on the order of $3.3 trillion a year. The basic income would require 56 percent of all tax revenue before anything else was paid for, and that is before reducing the tax pool by all those people who didn’t have jobs. If $24,000 a year is too much, cut it in half and that’s still 28 percent of all tax revenue and too much to sustain.
There is no free lunch. Someone always has to pay. But would the corporations that collectively eliminate the tens of millions of jobs be willing to pay when the whole point was to have more money? Would wealthy people who invest in the companies — and in political campaigns — be willing to pay that much more?
We need a drastically different way of considering society, individuals, work, and economics. Expecting the constant growth of revenue is like wanting to inhale without exhalation, or consume without stop. It cannot continue. If we don’t find another way, we can expect a societal calamity beyond anything we’ve witnessed, something that would make the Russian Revolution or French Revolution look like a minor altercation, because you cannot toss aside so many people without repercussions.