A labor union is trying to get Wal-Mart employees to go on strike. Wal-Mart pays close to minimum wage. Since Wal-Mart wage costs are so low management has less incentive to automate than they would if labor costs were, say, twice as high. Imagine Wal-Mart had to pay much higher wages, say $17 per hour. Management would spend more on automation to reduce labor usage. The resulting reduction in labor would include a reduction in demand for immigrant labor and therefore would reduce the incentive for people to enter the United States illegally.
With sufficiently advanced robots it would make sense for a Wal-Mart store to close for a few hours a day to allow robots to go out, restock the shelves, repair displays, and clean the floors. Also, employees who direct customers to goods could do this remotely from interactive video stations located throughout a store. Shoppers could even state questions and have a computer try to answer questions before a human was brought in for the cases where the customer didn't get a satisfactory answer from the computer.
Wal-Mart's increased spending on automation would accelerate the development of technologies that the whole retail sector would embrace. Distribution and retail store automation technology will eventually totally eliminate the added cost of unionization and then go even further and lower costs below where they would be absent the unionization.
Higher labor costs from unionization would lead to higher retail store product prices in the short term. Good news: Higher prices for goods at Wal-Mart would provide incentive to buy more online at lower prices. That would enable more automation. Stores have customers and Wal-Mart employees walking around and they both are obstacles to automation. In an order fulfillment warehouse much more automation is possible. Kiva Systems robots automate most of the work for retrieving inventory in warehouses.
The robots do an excellent job of moving goods to the humans who pack shipments. Of course, it is just a matter of time till the final step gets done by robots too.
Time to allow unionization of low paid jobs that are most ripe for automation.
Update: "Bogwraith" points out in the comments that unions can sometimes block the introduction of new technology. Certainly a higher minimum wage would be preferable to unionization for this reason. But industries across the spectrum have made great strides in automating in spite of the presence of unions. That's true in the auto industry, underground coal mining, and steel among others. Wal-Mart would have great incentive to automate in order to compete with Dollar General, Target, and many other non-union competitors. Still, a higher minimum wage is preferable because it would have economy-wide impact on employer attitudes toward automation.
|Share |||By Randall Parker at 2012 November 22 10:27 PM|