You can’t make a trip to the supermarket these days without donning modern-day armor — masks, gloves, hand sanitizer. But in late May, the Whole Foods store on South Street added another line of defense in the battle against the coronavirus: It replaced a row of employee-powered cash registers with nine self-checkout stations.
Masks and gloves are a cheap safeguard against the contagion, and will probably be discarded once the pandemic subsides. But the self-checkout machines are an investment that is likely to stick around, at least until the next generation of technology takes their place. According to a store employee, the South Street supermarket can now function with just three human cashiers on a typical shift, down from a high of 15. If you choose self-checkout, you can easily complete your shopping without encountering a single Whole Foods “team member” at close range.
Even before the pandemic reconfigured every aspect of our daily lives, it was clear that the cash register — the kind with a drawer that pops out after your groceries are tallied — was headed for the dust heap of technology, joining fax machines and CD players. Many convenience stores, like CVS, Rite Aid and Target, started installing self-checkout stations a decade ago. When Giant’s Heirloom Market, one of the more tech-savvy combatants in Philadelphia’s grocery wars, opened its first city store last year, self-checkout was the only option.
Give it a few more years and store cashiers will be as rare as blacksmiths. The coronavirus has simply accelerated the process of automation.
It’s not just cashiers. The same scenario is playing out in a dozen other low-wage, low-skill professions. Because of the need for social distancing, companies have been looking for ways to reduce interactions between customers and employees. That increasingly means replacing people with machines. Policy experts worry that whole categories of jobs could be phased out at the exact moment when the world economy is imploding.
“Put simply, any coronavirus-related recession is likely to bring about a spike in labor-replacing automation,” Mark Muro, a senior fellow at the Brookings Metropolitan Policy Center, wrote in a prescient essay published just after the first cases of the virus appeared in the United States in March.
Businesses have always turned to automation when times are tough. “We’ve seen that in the last three recessions. More automation, more replacement of lower-skilled people,” Muro said in an interview. But given that the pandemic-induced upheavals have already cost 40 million Americans their jobs, more automation could widen the gulf between the haves and the have-nots, increasing the country’s already severe inequality.
While it feels as if the pace of automation has picked up in recent years, history can be viewed as a series of technological advances that have made work more efficient and freed people to do more complex and interesting tasks. Automation also has played a role in making workplaces safer. Thanks to robotic paint sprayers, for instance, people who assemble cars and appliances no longer have to risk exposure to noxious chemical fumes.
Still, the pain of automation is real and has wiped out once-common occupations. When was the last time anybody bothered with a travel agent to book a flight? Executives no longer call on typists to transcribe their letters. An app can do that. Movie projectionists exist only in, well, the movies. Before the pandemic added an extra wrinkle to the situation, Brookings was already warning that a quarter of the jobs in office administration, transportation, and food preparation were vulnerable.
In normal times, automation can lead to the creation of new kinds of jobs because it makes businesses more productive and spurs innovation, says Omer Faruk Koru, a doctoral student at the University of Pennsylvania studying the effects of automation on inequality.
But these are anything but normal times.
Typically, companies decide to introduce new technology when the machines become cheaper than employees. Because of the virus, they now have a second, powerful motivation.
“Robots don’t get sick,” explains Brittain Ladd, a supply-chain consultant who advises companies like Amazon and Walmart. Over the last few weeks, he has been bombarded with inquiries from retailers “looking for robotic solutions” to the pandemic.
Ladd does most of his consulting for grocery chains, one of the few sectors that have prospered during the pandemic. Many supermarkets have seen their delivery business triple, to 15% of sales. But, Ladd says, taking groceries to customers’ doorsteps isn’t profitable in the long term, “especially when you’re promising two-hour delivery.” The stores have to pay pickers to roam the aisles, assembling orders. Then drivers have to deliver each order, sometimes at a destination miles from the store. “It’s the worst business model ever created,” Ladd argues.
So it’s not surprising that big supermarket chains are now exploring ways to automate the process. Ladd believes the solution lies in micro-fulfillment centers — mini-versions of Amazon-style warehouses — set up inside existing supermarkets.
A micro-fulfillment center is essentially a large box that houses tightly packed storage bins that move along a steel track. Once an online order is received, the items are plucked by a robot from the bins and sent speeding along the track, in much the same way that books are distributed by the book bot at Temple University’s new Charles Library. Instead of a dozen pickers roaming the store and selecting items, just one or two employees would be needed to operate a micro-fulfillment center. After everything is packed up, customers retrieve their groceries from a pickup window — or perhaps the nearest Amazon locker.
Besides a few people to operate the micro-fulfillment center, “the only employees a store would need are category specialists, in meat or vegetables,” Ladd says. “They would become more like knowledge workers.”
It’s one thing to retrofit stores with self-checkout stations and quite another to plan and install such complex robotic technology. That’s why online retailers have been on a hiring binge since the pandemic began. Amazon, which owns Whole Foods, says it plans to add 175,000 employees, many to work in its fulfillment warehouses. Walmart will hire nearly a quarter-million new workers. Jobs for sanitation specialists are also booming.
But an employee who works at Whole Foods’ South Street store fears the hiring will be only temporary. After the self-checkout stations were installed at her store, she noticed that the company cut the hours of part-time workers, putting an increased burden on the existing full-time staff. The employee, who asked not to be identified because of fear of losing her job, is also worried about the store’s remaining full-time cashiers. “They were here before Amazon bought the company. They’re older people who can’t transition easily.” What happens if Whole Foods follows Heirloom’s lead and eliminates cashiers? The company did not respond to a written request for comment.
Traditionally, such low-wage jobs have not been worth automating because paying workers minimum wage was cheaper than buying new machines. That’s why most of the investment in robotics over the last several decades has been concentrated in high-value manufacturing sectors, like automobiles and appliances. Despite everything we’ve heard about manufacturing going overseas, the surviving American factories are now some of the most sophisticated operations in the world, according to the Brookings study.
That study also noted that “the intensity of robot use in textiles, apparel, and leather products remains the most limited.” The pandemic could put those industries in automation’s crosshairs.
The early data from Philadelphia suggest that low-skill workers have already suffered the biggest job losses. According to a recent report by Philadelphia Works, the agency that oversees workforce development for the city, 68% of the people who have filed for unemployment since March don’t have a high-school diploma. The pandemic has disproportionately affected Blacks, Latinos and women, and they could be vulnerable to increased automation.
Before the pandemic hit, Philadelphia was experiencing its best job growth in years. The city was adding jobs at a faster rate than either the nation or the suburbs, says Meg Shope Koppel, Philadelphia Works’ chief research officer. At the same time, the city’s economy — like everywhere else — was undergoing major changes. Entry-level jobs in “fin-tech” — financial services — were declining. So was the retail sector, which has shrunk by a thousand jobs since 2014.
“I’ve heard there is real trouble placing entry-level accountants,” Koppel said, partly because computer programs make their skills less necessary. “If you’re a scheduler or someone moving paper, your job won’t exist in five years.”
Sylvie Gallier Howard, the city’s acting commerce director, says she is now focused on setting up training programs to help unemployed city residents adjust their skills to the available jobs. The city managed to include an additional $1 million for training in this year’s austerity budget.
Such programs in the U.S. have been notoriously ineffective because they are usually run by governments, not businesses. “The emphasis is always on teaching people how to interview or search for a job,” complains Susan Houseman, director of research for the Upjohn Institute for Employment Research, an independent nonprofit think tank in Michigan. “We don’t offer good career-oriented technical education, post-high school.”
But Philadelphia’s Howard recently spent some time in Germany, which she believes runs one of the world’s best retraining programs. She wants to emulate their practices here. “We’re looking to build more partnerships between employers and Community College,” she says. The city also wants employers to help the School District shape its offerings, to create a direct school-to-jobs pipeline. But she acknowledes, “it takes time to scale up.”
Automation will affect white- and blue-collar workers very differently. Houseman says office workers could actually benefit from the pandemic because working from home allows them to live where they like. Certain low-wage workers, like janitors and health aides, will also get through the crisis because they can’t easily be replaced by machines.
That doesn’t mean they will be paid any better. Four economists from the International Monetary Fund recently wrote an article predicting that the pandemic will widen the U.S. wage gap. Previous epidemics have always “hurt the employment prospects of people with low educational attainment, while scarcely affecting those with advanced degrees.”
Despite all the emergency federal aid being dumped into the economy, low-wage workers remain the group most likely to suffer the economic side effects of the coronavirus.