Advocates of hiking the minimum wage to levels that many employers might consider unsustainable might want to consider that, faced with a workforce that is too expensive, many employers are likely to turn to workers who don't care what the minimum wage is: robots.
In another sign of the times, mega retailer Target is experimenting with robots in stores.
Buried in an interesting article about how Target wants to become a major e-commerce player and is teaming up with a leading tech startup accelerator to provide funding and mentorship to small rising companies in retail tech, was a note that they are experimenting with robots.
Starting in its hometown of Minneapolis, Target will be opening its red doors to applications for a new program that will spark innovation using technology. Fortune explains that they’re looking at funding an array of solutions from supply and demand forecasting to improved store experiences that blend the digital world more seamlessly with the physical world. And this is expected to be a boon for Minnesota’s small tech scene.
However, Target executives also hinted that they are working on a “concept store” to open between 18 and 24 months from now which could include robots and other sci-fi features. They didn’t go into further details but for those of us who have been tracking the news, companies are increasingly looking to technology to alleviate the long-term burdens of minimum wage increases.
This is not surprising but should be a strong foretelling of what may be to come.
Womensenews.org captures the situation on an item headlined "Robots Haunt the Fight for the $15 Minimum Wage:
If you forget your toothbrush or need a cold drink or a midnight snack while staying at the Holiday Inn Express, Crown Plaza or one of two Aloft hotels in California's Silicon Valley, your room service may come via robot.
"People like getting a delivery from a robot," said Steve Cousins, CEO of Savioke, the 2-year-old company based in Santa Clara, Calif., that designs the waist-high attendants. "They don't have to get dressed, or brush their teeth, or tip; just answer the door."
The four service robots, which Savioke rolled out earlier this year, cost the hotels $2,000 a month, and they work a 24-seven schedule; a bargain, particularly considering the recent momentum in cities across the country toward a $15 per hour minimum wage.
While robotic attendants at every mid-level hotel may still be a few years off, increased use of technology in the service, restaurant and retail industries has already begun to threaten the unskilled and minimum-wage workforce, of which women account for two-thirds and women of color are disproportionately represented, according to the U.S. Department of Labor.
In 2014, Target introduced self-checkout options at stores across the nation, joining Wal-Mart and numerous supermarket chains. Since 2011, major restaurant chains, including Applebee's, Chili's, Olive Garden and Panera, have added such technology as tablet ordering, iPad "cashiers" and GPS-like systems for servers to find tables more efficiently.
Forty-seven percent of U.S. jobs could be lost to computerization during the next two decades, with low-wage and unskilled jobs particularly vulnerable, finds a 2013 Oxford University report.
"We're at an interesting point," said Mike Saltsman, research director for the fiscally conservative Employment Policies Institute, based in Washington, D.C. "The kind of increases being proposed are big (and) it's tough to deny that what's happening now is linked to increased labor costs."
Saltsman pointed to McDonald's "hiring" 7,000 touchscreen cashiers in 2011 in several western European locations where minimum wages tend to be higher. As the Fight for 15 takes hold, Saltsman said we may be headed for "a brave new world where there are no unskilled workers."
We’ve been reporting on this slow but growing trend. Wendy’s plans to start using automation to curb the costs of higher wages. NPR published a list of jobs likely to be replaced by machines and automation earlier this year.
Minimum wage activists like to think that government can act in a vacuum and impose costly regulations on business with no repercussions. They’re wrong. Not only are low-wage workers – those who should be helped by minimum wage increases – at risk of losing their jobs, but many of those jobs are at risk of drying up entirely as technology makes them obsolete.
It’s not entirely gloom and doom. Economists suggest that as robots conduct mundane and repetitive work, job creation will occur in other areas such as coding, personal coaching, health care, and creative and entrepreneurial fields. However, that will require greater education. Perhaps those pushing for $15 minimum should start looking at alternatives, education and training, rather than fighting for a job that will eventually disappear.