Maybe robots aren’t replacing all workers after all.
Walmart is pulling the plug on automated towers for online purchases in its stores. Last year, the retailer phased out aisle-roving, inventory-monitoring robots.
For store employees, these changes signal that robots won’t entirely replace them, at least not in the near future.
Before the pandemic, the predictions of how quickly automation was decimating retail jobs were abundant. However, the novel coronavirus outbreak changed how Americans shopped. Surprisingly, it has been in ways that help American workers.
In January 2020, a New York Times op-ed headline read The Robots Are Coming. Prepare for Trouble. The writer laid out all of the ways that online shopping was largely killing retail jobs. He had to admit that delivery jobs for those online purchases picked up. His solution was to pass stronger labor laws like California’s job-killing AB5. He could not have been more wrong about a law that forced independent contractors out of work—even before the pandemic hit. His predictions were also undercut by the pandemic.
In 2017, a Quartz analysis found that Amazon’s robots displaced 171,000 workers from brick-and-mortar stores like bookstores. They ominously predicted that “Amazon’s growing army of robots may seem helpful and benign but they are also highly effective at terminating human retail employees.” However, although they tracked the 40 percent year-over-year growth in headcount, they likely didn’t account for all of the small business growth that Amazon supports on its platform.
Then, the pandemic hit disrupted the normal shopping experience and drove significantly more Americans to purchase household staples online for home delivery or curbside pickup.
The pandemic’s impacts on the labor market
The pandemic’s impact on the labor market has been hard but mixed. The retail industry suffered significant job losses as many non-essential stores were prohibited from operating or operated at diminished capacity for months. However, some of that has been offset by hiring blitzes that major retailers conducted last year to support their in-store and online operations. They especially beefed up warehouse workforces and drivers for their delivery services. Companies like DoorDash, Uber, and Amazon recruited tens of thousands of drivers as independent contractors, giving them the flexibility to earn on their schedules—which many workers, especially women, value.
As states reopen and vaccinated Americans feel comfortable shopping in person, retail employment is rising once again. Retail trade added 23,000 jobs in March, but employment in this sector is still 381,000 below its February 2020 level. Meanwhile, transportation and warehousing continue to add jobs and employment is up by 206,000 (or 23.3 percent) from February 2020.
Customers value tech but still want human interaction
Robots are not a perfect replacement for workers. Customers’ shopping habits reflect that.
According to a pre-pandemic survey about retail, 64 percent of respondents prefer to engage with associates in a store than a robot. Yet, over half say they always or usually use the self-checkout because it’s faster than a cashier.
Here’s what we should make of all of these trends. The predictions that technology would carnage the American workforce have been overblown. Retailers will always consider consumer preferences. While robots may seem good for the bottom line in the short run, they may not be worth the loss of customer loyalty in the long run.
Moving forward, we should recognize that innovation can displace workers, but it also generates new opportunities that could not have been envisioned. We need to think about the skills that will be needed for the jobs that innovation brings and how to help Americans gain those skills.
The pandemic has also created opportunities for workers, especially flexible jobs that women value, even as it shed millions of jobs.
Government policies should also not harm working opportunities in the name of workers’ rights. Reclassifying workers from independent contractors to employees will effectively end flexible work from delivery drivers in the gig economy to small business owners in events and hundreds of occupations in between.
We cannot predict the future of work, but we should be encouraged that a dynamic and innovative economy will generate opportunities for workers.