TAKE A BREATH

Let’s not freak out about the “next major job killer” just yet

Amazon Go, the company’s latest store concept, allows shoppers to take products off shelves and walk out the door without waiting in a checkout line or dealing with a cashier. Instead, sensors and computer vision keep tabs on how much to charge customers’ Amazon accounts for their purchases.

By ostensibly eliminating the need for any human interaction, many have concluded that Amazon Go must be, as the New York Post put it, “the next major job killer to face Americans.” About 3.5 million people in the US work as cashiers, according to the Bureau of Labor Statistics.

But that’s not how automating or self-service technology has typically impacted jobs in the past. “In general, the pattern of computer automation [impacting employment] is that it doesn’t destroy jobs,” says James Bessen, an economist at the Boston University School of Law. “Occupations that become automated often grow.”

Bessen has studied this phenomena in the 19th century, when technology almost completely automated weaving. As he wrote in The Washington Post:

“Marx observed this automation and predicted that it would result in mass unemployment. What Marx missed was that the new technology also increased demand. The greater output per weaver reduced the price of cloth. Consumers reacted by buying more cloth. Greater demand for cloth meant more jobs for weavers despite the automation.”

There are other examples of automation or self-service coinciding with an increase in the number of jobs within the sector it enters. One is the self-serve gas pump. Though there are now many fewer people who spend their days filling tanks than there were when the first self-serve gas stations opened in the 194os, there are more people who work at gas stations. Moving workers inside to staff new convenience stores and an increase in car ownership help explain this.

The proliferation ATMs had a similar counter-intuitive correlation on the number of bank tellers. “ATM’s lowered the number of tellers per bank, but banks became convinced for a while that they could best compete through opening up large number of branches so the total number of tellers increased,” says Frank Levy, an MIT economist.

Which is all to say, there isn’t necessarily a perfect relationship between a task like checking out groceries becoming automated and job loss. “If [stores] keep the same business and the same inventory, they’ll have fewer workers,” Bessen says about self-serve options like Amazon Go. “But if the business increases and they have more variety in what they offer, they may not.”

In other words, by eliminating a point of friction such as long checkout lines, people could legitimately be encouraged to shop more frequently or acquire more items (no more impulse to keep things to the 15 item express lane limit, for instance). Amazon may also choose to use the savings from not hiring cashiers to expand to other services that do require humans.

Other technologies aimed at eliminating cashiers haven’t resulted in wide layoffs. Grocery stores in the US began installing self-checkout machines almost 30 years ago. Early on, these machines caused the same fear about job loss as Amazon Go—You could potentially see the front of stores with nobody there—just machines,” Bryan Neath, a leader of the United Food and Commercial Workers, told the Globe and Mail in 1993—but they haven’t replaced store workers. According to US Census Bureau’s American Community Survey, the number of full-time equivalent jobs for cashiers at grocery stores declined about 10% between 2013 and 2015, while the total number of employees at grocery stores increased. Self-checkout also, in some cases, disappointed as a technology, with an increase in theft and slow checkout times. As Zeynep Ton, an associate professor at MIT Sloan School of Management, wrote in her 2014 book The Good Jobs Strategy:

“Even if self-checkout prevails, most of the work at retail stores will still be done by employees. Customers will not be invited to receive merchandise on the loading dock, shelve merchandise, move merchandise between storage locations and the selling floor, or change prices.”

Automation’s impact on jobs in the more distant future is up for debate, with some thinking it will be much more destructive this time around. But when Amazon Go opens its first store to the public in early 2017, one thing you’ll be sure to see are plenty of human workers.

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