Does Amazon Automation Business Work? – 11 Month Update
‘Tis the Season for Surge Robots as Holiday Hiring Finds Automation
The holiday hiring frenzy is under way and robots are joining the rush to seasonal jobs. Retailers and logistics operators facing a tight labor market are ramping up automation at warehouses for the holidays, when online order volumes can surge tenfold as consumers load up digital shopping carts in the weeks around Thanksgiving and Christmas. France-based Geodis SA is boosting its robotic workforce by 75% to help workers at its U.S. warehouses fulfill fast-fashion orders during the holiday peak. This year the company, which plans to bring on between 6,000 and 7,000 human workers for the holiday period, is placing a total of 281 Locus units at five locations.
XPO Logistics Inc., which is hiring 20,000 human workers for the seasonal rush, is advancing its purchase of millions of dollars’ worth of robots the company expects to need next year so it can use them now to manage the spike in e-commerce orders. There aren’t broad industry figures on the numbers of robots in logistics operations, and most warehouses still rely largely on people pulling carts. The companies are looking for help in the labor-intensive business of storing, sorting and packing goods for shipment, especially around the holidays, when retailers and logistics providers add tens of thousands of extra workers. Automation companies say most of the seasonal demand for robots comes from customers that already use their units. The aging workforce is contributing to interest in warehouse robots, said Melonee Wise, chief executive of Fetch Robotics Inc., especially as companies look to fill gaps with temporary workers.
Others say robots aren’t a universal panacea for peak-season pressure. E-commerce logistics company Radial, which counts Cole Haan Inc. and World Wrestling Entertainment Inc. among its customers, uses robotics and automation at several of its fulfillment centers but says it isn’t ramping up those tools for peak. With the U.S.
unemployment rate at a 50-year low and businesses vying with Amazon.com Inc. and other big employers for workers, some operators hope robots can ease the hiring crunch.
The potential loss of millions of jobs is Exhibit A in a report issued by the outgoing U.S. administration in late December. Many economists argue that automation bears much more blame than globalization for the decline of jobs in the region’s manufacturing sector and the gutting of its middle class. The report says greater deployment of AI and automation could boost economic growth by creating new types of jobs and improving efficiency in many businesses. Things Reviewed:It is often argued that technological progress always leads to massive shifts in employment but that at the end of the day the economy grows as new jobs are created.
That’s a far too facile way of looking at the impact of AI and automation on jobs today. None are specifically designed to help people whose jobs have disappeared because of automation. No one actually knows how AI and advanced automation will affect future job opportunities. Predictions about what types of jobs will be replaced and how fast vary widely. One commonly cited study from 2013 estimated that roughly 47 percent of U.S.
jobs could be lost over the next decade or two because they involve work that is easily automated. A recent study by the Organization for Economic Cooperation and Development estimates that around 9 percent of U.S. jobs are at high risk. Personal computers, the Internet, and other technologies of the last several decades did replace some bank tellers, cashiers, and others whose jobs involved routine tasks. Initiatives like improved retraining for workers who have lost their jobs to automation, and increased financial protections for those seeking new careers, are steps recommended by the White House report.
The High Cost of Impeding Automation
In speech after speech, politicians are both tapping into-and feeding-the growing fear that automation is out to take away jobs. Perhaps more important, there is compelling evidence that factory automation swung three key Rust Belt states-Michigan, Wisconsin and Pennsylvania-in favor of Donald Trump in the 2016 election. History tells us that policies aimed at restricting or slowing automation come with a steep price tag. It is important to remember that the acceleration in economic growth that followed the Industrial Revolution, which first took off in England around 1750, was caused by the steady adoption of automation technologies that allowed us to produce more with fewer people. Proposals to tax robots to slow the pace of automation now feature in the public debate on both sides of the Atlantic.
History offers no shortage of examples of governments trying-and succeeding-to hinder automation for the sake of workers. Over the long run countries and empires that failed to leverage automation technologies fell behind. This is not to suggest that resistance to automation technologies in Britain ended in the 18th century. Of course, the short-term consequence for those who lose out to automation can be devastating. The losers to automation have good reasons to want to block advanced robotics and artificial intelligence, which threaten their jobs and incomes, even if future generations benefit.
As we have seen, many Americans favor restrictions on automation technologies, and politicians are tapping into their concerns. Instead, governments should try to compensate the losers to technological change and help people shift into better jobs to create acceptance for automation.
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