Amazon, automation, and the new “wage slave”

Jason Richardson
Jul 30, 2017 · 2 min read
Amazon Warehouse, similar in size and organization to a large retail store.

Half of all American families are Amazon Prime members.

Let that sink in. Just over 100 million families exist in the U.S. now.

50 million use Amazon’s $99 service (including mine). The scale itself is difficult to fully grasp.

Although the impact of Amazon has been widely discussed in terms of the impact to retail employment, the impact on producers, and its long term impact on commercial real estate, a new piece from the Financial Times highlights something a lot of economists have been suggesting all along: automation often increases the need for labor elsewhere in the production chain. Perhaps the most famous example is the cotton gin. Although it would reduce the need for labor, slaves usually, to pick seeds from the cotton it also increased the volume of cotton that could be processed, which required more cotton to be planted and picked. The net impact was a dramatic uptick in demand for slaves with severe and long-lasting consequences on America.

In this case, Amazon requires more staff at the warehouse and delivery positions than it is eliminating in the retail sector. Since these positions are not in the same labor sector it is often hard to see the correlation in monthly jobs numbers, but the researchers studying the effect estimate the net gain in jobs has been about 54,000 over the last year. The problem with this number is that those jobs are often not where the retail jobs were, and the people that performed the retail jobs may not be physically capable of performing the warehouse or driver work.

Those jobs can be hazardous as well, something that Amazon has actively tried to cover up in the past. One would hope that now with their clear dominance of the home delivery industry they would arrive at the same conclusion Henry Ford did a century ago, well paid and happy staff are cheaper than a constantly revolving door of short term employees and lawsuits. However, the Amazonian quest to automate every task possible suggest that this boom in warehouse jobs is but a temporary condition, and that any increases in pay or work environment in future-Amazon will be offset by fewer jobs for the low-skilled workers that already lost the opportunity for retail employment.

Nerdy/Geographer/Lending ~Economic refugee from Florida

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