Automation Puts American Workers at Risk of Massive Layoffs
A new report by the Investor Responsibility Research Center Institute (IRRCi) finds that American retailers are increasingly moving towards automating their operations, thus putting millions of Americans at risk of facing layoffs in the coming years.
The report identifies that the retail sector accounts for roughly 10% of the total jobs in the U.S. in that about 16 million Americans are currently employed in retail. More than two-thirds of these 16 million, about 71%, are full-time employees, the rest being part-timers or contractors.
The research institute warns that technological disruption in the sector could substitute robots for humans, causing layoffs in not thousands, but millions, in the coming years.
The IRRCi’s report cites two significant reasons why retailers are shifting their focus towards automation.
The first is the rise of e-commerce retailers like Amazon.com, Inc. (NASDAQ:AMZN), which are threatening brick-and-mortar retailers, causing store traffic and ultimately sales to drop. The second is the pressure, particularly from worker unions, for higher minimum wages.
The two factors are jointly pushing up costs for traditional retailers, and forcing them to hand out pink slips to thousands of their employees. In just the first half of this year, 50,000 workers have so far been laid off in the retail sector.
The report also pinpoints 10 technologies that are substituting the need for human resources. These include:
1. Smartphones: Customers use smartphones to scan barcodes and find information on the products online, omitting the need to go up to customer service.
2. Self-Checkouts: Customers are checking out through payment terminals all on their own, without a cashier’s help.
3. Touchscreen Kiosks: These allow customers to make a purchase and checkout digitally.
4. Proximity Beacons: Devices that beam store deals to customers that are near it, within or outside the store.
5. Scheduling & Task Management: Computers scheduling and assigning tasks to workers instead of human managers.
6. RFID Technology: The Radio-Frequency Identification electronic tags on merchandise that help in tracking inventory throughout the supply chain, without human interference.
7. Autonomous Robots: Robots that perform various tasks including guiding customers through the store and restocking inventory on depleting shelves.
8. Smart Price Tags: Price tags that change the price of the product in real-time based on its demand in the store, omitting the need for physically replacing old tags with new ones.
9. Sensor-Based Checkout: The automatic scanning of products and receipt of payments as customers walk out of the store, eliminating the need of a cashier.
10. Smart Shelves: Shelves that can identify when inventory is going low, and automatically call for restocking, bypassing human intervention.
The institute has analyzed America’s 30 biggest retailers for its report. Retailers like Wal-Mart Stores Inc (NYSE:WMT), Target Corporation (NYSE:TGT), Costco Wholesale Corporation (NASDAQ:COST), Best Buy Co Inc (NYSE:BBY), Macy’s Inc (NYSE:M), Lowe’s Companies, Inc. (NYSE:LOW), and Home Depot Inc (NYSE:HD) are already using the aforementioned automated technologies in one form or the other.
The report also studies the gender composition of the retail workforce and identifies women to be holding 73% of cashier positions in retail. The cashier’s job is cited to be the easiest to automate. Thus, these American women are presumably at a higher risk of facing layoffs as automation takes over the sector. (Source: Ibid.)
“Retail Automation: Stranded Workers? Opportunities and risks for labor automation,” Investor Responsibility Research Center Institute, May 18, 2017.