Sorry Luddites, Amazon Go Will Be a Huge Job Creator
The majority of alarmist headlines yesterday were all about Seattle, WA-based Amazon's latest profit-making venture. Expanding its operations into the grocery space, the retailer is set to open stores sans checkout clerks. Upon entry in Amazon Go stores set to be opened to the public in the next year, customers will choose items for purchase only to be billed electronically. The days of long checkout lines may well be over with if the experiment succeeds.
Readers can probably imagine that what's great for the customer is apparently not great for the typical American worker if traditional media are to be believed. As the New York Post put it, Amazon's entrance into groceries will "automate American workers out of existence." And if the Daily Caller's Christopher Bedford is to be taken seriously, this erasure of the human element that has forever defined shopping is a ‘this time is different' scenario that foretells mass unemployment for the non-elites presently earning their keep in this sliver of the service sector. President-elect Donald Trump must have a plan in place to penalize Amazon's latest job-killing stab at productivity?
Back to reality, and reason, it should be pointed out up front what was mentioned previously; specifically that Amazon is based in Seattle. This requires mention simply because in the past, Seattle's wealth was a function of human-conducted manufacturing. But thanks to economic progress, the traditional, manufacturing-based work that had employed so much of its citizenry no longer exists. If the media hysteria of the present is to be taken at all seriously, Seattle still hasn't recovered from the loss of manufacturing jobs decades ago.
But that's not what happened. In fact, Seattle is an excellent destination today for individuals of all skill sets who are desirous of well-paid work. A city defined by technological innovation that is always and everywhere an enemy of the jobs of the present, Seattle is but one of many U.S. cities that Americans move to in order to cure their unemployment.
What explains this? Figure that technological advances are all about job destruction. While at least half of all Americans worked on farms 150 years ago, the introduction of the primitive robot that we call a tractor rendered the vast majority of farm work redundant. Looking at technology in the bigger picture, the car, airplane, computer, internet and ATM list among the biggest job-destroyers in the history of commerce. Yet despite their ubiquity in what is the world's richest country, Americans are known around the world as intensely work focused; so much so that the companies of the present are increasingly demanding that their workers take the paid vacation that is but one perk of their employment.
What does this seeming paradox tell us? Quite explicitly it tells us that jobs are most plentiful in the locales where they're most readily being destroyed. Getting right to the point, willing workers in tech outposts like Seattle enjoy feverish bidding for their skills precisely because the city's brightest technological minds are constantly pushing into the past the work of the present.
Conversely, it's in the locales where the nature of work is changing the least that jobs are least plentiful. Contrary to what we're told by politicians on both sides of the aisle, unemployment is highest in the very locales where the nature of work is most static. That this is true shouldn't surprise those passably familiar with the genius of Adam Smith; Smith the too-frequently forgotten seer who would be mystified by all the confused rhetoric from modern politicians so eager to bring back the jobs of the past.
Smith knew well that stationary, or backwards economies, are always defined by economic decline. Smith understood that the investors who create all jobs studiously avoid the stationary economies, and instead direct their resources to the areas most defined by change. And advance. Investors direct their resources with great gusto toward the locales most focused on automating work presently performed by human beings.
The fact that manufacturing work long ago departed Seattle as the principal source of its wealth explains why much better jobs are abundant there now. At the same time, the towns and cities of today in which manufacturing is the primary employer are the ones in which it's most difficult to find work. Investment is always and everywhere the driver of company and job creation, and investors studiously avoid commercial concepts and locales bent on re-creating what used to be remunerative. That Amazon Go has the potential to erase traditional retail work is a certain sign that new forms of work will replace what Amazon's innovations will render yesterday's news.
To understand why, we must never forget that while we go to work and produce each day for dollars, our work in truth represents our demand for all the goods we don't have. Looked at in terms of robots and automation, there would exist no investment in either if the result were going to be mass unemployment. In reality, and this is what modern luddites miss, robots and other forms of automation are a certain signal that much better, and much higher-paying work will immediately replace the jobs lost to automation.
Automation by its very name foretells a future of abundant goods and services created by machines, but that it does also foretells immensely productive human labor that will pay for the plenty created by those machines. Sorry, but if robots were truly the future driver of mass unemployment, simple logic dictates that no profit-interested business would invest in them to begin with. In short, the ongoing rise of automation tautologically signals a very exciting work future for human beings that will include all manner of jobs previously unimagined.
The mistaken thinking that says robots will impoverish us is rooted in the falsehood that says the work of today predicts the work of tomorrow. But as the tractor and computer's destruction of traditional employment from the past remind us in blinding fashion, that which destroys work through increased productivity begets all manner of new forms of employment.
Looking at Amazon specifically, automated grocery stores signal much greater profit margins for the company; those profits driving the very investment that is the source of all job creation in the first place. Investors once again rush in the direction of productivity, so if U.S. companies prove adept at doing a great deal more with fewer human inputs, investment will flow toward them on the way to myriad new advances that will employ the very people displaced by automation.
The silly notion that robots and automation will render humans unemployable amounts to "fake news" of the worst kind. In truth, an unwillingness forego human labor will be the biggest driver of joblessness simply because a lack of productivity is an investor repellent. Amazon Go will power a massive surge of job creation precisely because it will thankfully destroy the work of the past. As is so often the case of late, the media have it 100% backwards.