Not All
Tech Destroys Jobs
I noticed a curious thing about the
McDonald’s last week at Amsterdam’s Schiphol Airport. And no, it wasn’t that
the locals were dipping the fries in mayonnaise. Rather, it was the setup. You
placed orders at one of a dozen kiosks arrayed near the counter, swiped a debit
card, and then waited for the crew members to call your number when the order
was ready. This McDonald’s was remarkably busy. The action behind the counter
was as frenzied as at any busy outpost in the states: a dozen uniformed workers
putting together fries, sodas, and burgers as hungry customers waited. But not
one employee was engaged in taking orders.
This
is productivity growth in action — more output with slightly less human labor.
But in the U.S., the presence of more machines at fast-food joints is often
positioned as a job-destroying disruption, or wielded as a threat. It’s common
to hear leaders in the quick-food-service industry complain that if minimum
wages are set too high, they might have to replace people with machines.
Earlier this year, a former McDonald’s president said that moving toward a US$15 minimum wage would push
restaurant franchises to buy expensive robots and would “cause job loss across
this country like you’re not going to believe.” And of course, in high-cost San
Francisco (where else?), a robot-powered
burger joint is on the way.
But
here’s the thing: The way the Amsterdam airport McDonald’s works actually makes
more sense than the way McDonald’s and its competitors run most of their
outlets in the U.S. — with humans taking all the orders. It’s not like wages in
the Netherlands are that much higher than they are in the U.S. (the Netherlands
has a minimum
wage that varies by age, but translates to
about $8 an hour for a 21-year-old at existing exchange rates.) Buying
expensive equipment that substitutes for some labor is precisely what all types
of businesses should be doing.
Indeed, the restaurant industry has already
embraced such labor-saving technology. Many chains have been deploying
kiosk-based in-store ordering systems. And the rise of Seamless as a lunch
utility for office drones means a machine is effectively performing this
function: The website takes orders and accepts payments electronically for
thousands of restaurants. So it’s kind of mystifying why more restaurant and
business owners don’t invest in labor-saving technology — as a proactive,
productivity-enhancing measure — and instead wield it as a threat.
There
were still plenty of people working at the McDonald’s in the Amsterdam airport
— they just weren’t taking orders and collecting payments. There, as at every
restaurant and every workplace, human beings work alongsidemachines.
And a hallmark of modern economies is that companies use increasingly
intelligent equipment to do some of the work — especially the repetitive and
annoying components — that had once been the exclusive province of people. In
the 19th century, the reaper didn’t make farmers or farm work obsolete; it just
meant that people no longer needed to cut grain by hand. The steam-powered
assembly line didn’t put factory workers out of a job; it just meant workers
could spend their time putting cars together rather than moving materials from
station to station. And even though ATMs do a lot of the banking system’s work
of accepting deposits and dispensing cash, the nation’s tens of thousands of
bank branches are still staffed by tellers and other employees.
So,
yes, you can look at the aggressive deployment of IT and equipment as
displacing and substituting for comparatively expensive human labor. The other
way to look at it is that it frees people up to do other higher-value-added
tasks in the workplace. More significantly, taking human labor out of the
equation often creates productivity gains for thousands or even millions of
customers. For example, working at a tollbooth may be a secure job. But
whatever gains the economy gets from having people making change at tollbooths
are more than offset by the loss of time that results when other people have to
wait in traffic to enter a toll road. Starting in October, the Massachusetts
Turnpike Authority will shift to entirely automatic tolls. Machines will do all the work of collecting tolls, and
toll collectors either will be reassigned to other positions within the
authority or will have to find new jobs. But traffic will flow more easily,
leading to big gains in efficiency for truckers and people getting to work, and
less waste of fuel.
The
fears of a jobless future are based on the idea that many routine service jobs
will disappear. That’s understandable, especially when business executives
wield machines as threats. But the reality is that components and whole classes
of jobs have been disappearing for decades (know any stenographers?) and will
continue to disappear. Of course, there are lots of people who would be working
today if machines hadn’t usurped their positions doing repetitive tasks. But
that’s not even half the story. Consider this: The U.S. has a record number of
payroll jobs and an unemployment rate of under five percent. What’s more, it
seems like there are lots of jobs — including many that involve repetitive
tasks — sitting there waiting for people (not machines) to do them. The Bureau
of Labor Statistics’s JOLTS report shows that there were some 5.6 million jobs
open in the U.S. at the end of June 2016, close to a
record.
If only we could devise and deploy machines
that would more effectively match individuals seeking work with employers
looking to hire.
Daniel Gross
http://www.strategy-business.com/blog/Not-All-Tech-Destroys-Jobs?gko=de745&utm_source=itw&utm_medium=20160830&utm_campaign=resp
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