In the grand tradition of American labor history, workers with the advantage as demand rebounds from the Trump COVID depression are finding that businesses and corporations are no longer considering raising wages to attract workers, they're instead turning to automation and computers to get rid of minimum wage jobs completely.
When Kroger customers in Cincinnati shop online these days, their groceries may be picked out not by a worker in their local supermarket but by a robot in a nearby warehouse.
Gamers at Dave & Buster’s in Dallas who want pretzel dogs can order and pay from their phones — no need to flag down a waiter.
And in the drive-through lane at Checkers near Atlanta, requests for Big Buford burgers and Mother Cruncher chicken sandwiches may be fielded not by a cashier in a headset, but by a voice-recognition algorithm.
An increase in automation, especially in service industries, may prove to be an economic legacy of the pandemic. Businesses from factories to fast-food outlets to hotels turned to technology last year to keep operations running amid social distancing requirements and contagion fears. Now the outbreak is ebbing in the United States, but the difficulty in hiring workers — at least at the wages that employers are used to paying — is providing new momentum for automation.
Technological investments that were made in response to the crisis may contribute to a post-pandemic productivity boom, allowing for higher wages and faster growth. But some economists say the latest wave of automation could eliminate jobs and erode bargaining power, particularly for the lowest-paid workers, in a lasting way.
“Once a job is automated, it’s pretty hard to turn back,” said Casey Warman, an economist at Dalhousie University in Nova Scotia who has studied automation in the pandemic.
The trend toward automation predates the pandemic, but it has accelerated at what is proving to be a critical moment. The rapid reopening of the economy has led to a surge in demand for waiters, hotel maids, retail sales clerks and other workers in service industries that had cut their staffs. At the same time, government benefits have allowed many people to be selective in the jobs they take. Together, those forces have given low-wage workers a rare moment of leverage, leading to higher pay, more generous benefits and other perks.
Automation threatens to tip the advantage back toward employers, potentially eroding those gains. A working paper published by the International Monetary Fund this year predicted that pandemic-induced automation would increase inequality in coming years, not just in the United States but around the world.
“Six months ago, all these workers were essential,” said Marc Perrone, president of the United Food and Commercial Workers, a union representing grocery workers. “Everyone was calling them heroes. Now, they’re trying to figure out how to get rid of them.”
Checkers, like many fast-food restaurants, experienced a jump in sales when the pandemic shut down most in-person dining. But finding workers to meet that demand proved difficult — so much so that Shana Gonzales, a Checkers franchisee in the Atlanta area, found herself back behind the cash register three decades after she started working part time at Taco Bell while in high school.
“We really felt like there has to be another solution,” she said.
So Ms. Gonzales contacted Valyant AI, a Colorado-based start-up that makes voice recognition systems for restaurants. In December, after weeks of setup and testing, Valyant’s technology began taking orders at one of Ms. Gonzales’s drive-through lanes. Now customers are greeted by an automated voice designed to understand their orders — including modifications and special requests — suggest add-ons like fries or a shake, and feed the information directly to the kitchen and the cashier.
The rollout has been successful enough that Ms. Gonzales is getting ready to expand the system to her three other restaurants.
“We’ll look back and say why didn’t we do this sooner,” she said.
No, a year from now I figure we'll all be back at the office for good, only you'll see a lot fewer help wanted signs. Restaurants may come back, but fast-food is going to automation even more quickly than anticipated.
Wait until Amazon starts replacing warehouse workers with robots in a couple of years. Grocery stores, fast food, banks, retail logistics, all of it is going to automation this decade. We're going to have to find a way to deal with that, and increasingly the answer is going to be "an unemployable underclass".
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