Amazon holiday hiring may foreshadow future

This holiday season, Santa’s little helpers might come with a battery.

While retailers across the country are beefing up seasonal hires to prepare for the holiday shopping apocalypse, Amazon is taking a different tack — hiring 20,000 fewer seasonal hires from previous years and increasing workplace automation.

It may be a frightening preview of holidays to come: As mandated minimum wages across the country continue to rise, retailers are forced to pursue automated alternatives or fewer hires per store.

According to a survey by consultant Korn Ferry, nearly 67 percent of retail respondents said that minimum wage increases have made hiring seasonal staff economically challenging this year. It’s not that retailers aren’t hiring; rather, they’re moving towards business models that require fewer employees than before. For instance, the Wall Street Journal reported this fall that Macy’s has cut 52,000 employees in the past decade — while operating “roughly the same number of stores …”

Similar (or steeper) declines are occurring at other large retailers including Kohl’s, Nordstrom, Target and J.C. Penny. The decline of human personal on store floors has been replaced by the rise of robotic technology.

Gap has begun using automated arms and other types of artificial intelligence to sort clothing; its VP of Global Logistics Fulfillment explained equivalency of one machine that “would be four people working across four shifts.” Walmart is experimenting with robots that are able to roam store aisles to complete inventory checks and even assist in helping customers find products throughout the store.

Employers aren’t doing this because they’re evil; they’re doing it because customers are price sensitive. These robots can on average double the speed of what a normal human can do while protecting customers against rising prices associated with increased labor costs. Reducing the number of employees in the store allows retailers to promote and pay higher starting wages to those that remain. Deutsche Bank predicted that Amazon would save roughly $880 million from implementing robots.

But what happens to the less-skilled employees who used to fill those jobs? Many are left without a job opportunity. Researchers David Neumark and Grace Lordan found that higher minimum wages have decreased employment in jobs that are easy to automate. In other words, employers are replacing real employees with robots — and younger employees are among the most likely to be affected.

The loss of seasonal job opportunities, which might be the first job for many, can have negative effects later on. Research from economists Christopher Ruhm and Charles Baum from University of Virginia and Middle Tennessee State University found that teenagers who had prior part-time job experience have roughly 7 percent higher earnings later on in life compared to their peers who lacked early work exposure.

Amazon’s decline in seasonal hiring should come as no surprise. There are tradeoffs to most any economic pressures to increase operating costs.

As minimum wage mandates continue to rise across the country, more retailers will be opting to implement robots over human capital.

When lawmakers push for more wage mandates, they should consider the hidden costs for those who need a job more than they need a raise.

•••

Samantha Summers is the communications director for the Employment Policies Institute.

6 Comments
  1. Over December 17, 2018 1:07 pm Reply

    Samantha Summers, is a paid shill for the The Employment Policies Institute (EPI). Whoi is EPI? Well, it is one of several front groups created by Berman & Co., a Washington, DC public affairs firm owned by Rick Berman, who lobbies for the restaurant, hotel, alcoholic beverage and tobacco industries. Consider your source when reading.


    1. Abe December 17, 2018 9:10 pm Reply

      Thank you!

      Why do we have this crap in our local newspaper? So sad that the media is caving to special interest groups.


  2. Gary Mack December 17, 2018 2:13 pm Reply

    Did you know the Employment Policies Institute is a front organization for Berman and Company, a firm that lobbies for the restaurant, hotel, alcoholic beverage and tobacco industries? Shouldn’t that be disclosed?


  3. MisterM December 17, 2018 8:36 pm Reply

    Dubious conclusion. Amazon has been automating for 20 years, long before min wages were increased, so dubious cause and effect wrt higher wages driving automation


  4. Charlie Chimknee December 18, 2018 11:06 pm Reply

    Aloha Kakou,

    This is a 2nd rate whack on the head of low income workers; and way behind on what Pres. Trump is trying to correct for those workers, but alas the Fake Democraps are stifling his efforts claiming unfair.

    Seems like a no brainer if you turn the coin over.

    Ya see decades ago US corporations realized they could take their companies to China and get workers for $2/day with no benefits like sick, vacation, and holiday pay, and no work Comp insurance, and prepaid health insurance, and retirement.

    So off they went to Asia and of course laid off AMERICANS at home in the factories here who were also unfit to pick cotton and tobacco like illegal foreigners gladly would at US WAGES.

    To make it look legit the US corporations began to buy their own goods from their shell Chinese companies at dirt wages being paid to happy employed Chinese workers.

    Now US corps buy $550 Billion in their own goods “from” China, while China uses that $$$ to buy only $35 Billion in US goods from America, and then China steals our technology and patents to make further $$$.

    $550 Billion to $35 Billion is called a Trade Deficit…and in this case a FAKE TRADE DEFICIT because it’s been created by our own US CORPORATIONS. But it sure put a lot of US workers perpetually generation to generation out of work…leaving the cotton picking to hordes of illegal grateful immigrants. Of course the cotton is shipped to China and mixed with polyester, made from cancer causing petrochemical motor oil, and turned into 50/50 cotton to polyester cheap flammable clothing. Watch out for that cigarette.

    So Pres Trump tries to break the Trade Deficit and bring the jobs back home and give Americans more jobs, and get the unemployed off welfare and the backs of the American tax payers. But not…the Democrats chastize him, the Pres, for it…go figure…!

    Cracee American Liberals.

    What Americans don’t know is they can move to Kaua’i and work 3 jobs and survive…or go on welfare the first day on island. And leave the jobs to the poor Chinese…communists…in China…!

    While the Russians are hacking our elections and bank accounts and our own brilliant CIA, FBI, NSA, and AMA failed to detect or diagnose it, in the meantime we are unable to accept any of the blame for it, after all, we are the Almighty Americans, whom ain’t won a war since #2 when it hit the fan across both the Atlantic and the Pacific.

    Charlie


  5. Charlie Chimknee December 19, 2018 8:32 am Reply

    This is a 2nd rate whack on the head of low income workers; and way behind on what Pres. Trump is trying to correct for those workers, but alas the Fake Democraps are stifling his efforts claiming unfair.

    Seems like a no brainer if you turn the coin over.

    Ya see decades ago US corporations realized they could take their companies to China and get workers for $2/day with no benefits like sick, vacation, and holiday pay, and no work Comp insurance, and prepaid health insurance, and retirement.

    So off they went to Asia and of course laid off AMERICANS at home in the factories here who were also unfit to pick cotton and tobacco like illegal foreigners gladly would at US WAGES.

    To make it look legit the US corporations began to buy their own goods from their shell Chinese companies at dirt wages being paid to happy employed Chinese workers.

    Now US corps buy $550 Billion in their own goods “from” China, while China uses that $$$ to buy only $35 Billion in US goods from America, and then China steals our technology and patents to make further $$$.

    $550 Billion to $35 Billion is called a Trade Deficit…and in this case a FAKE TRADE DEFICIT because it’s been created by our own US CORPORATIONS. But it sure put a lot of US workers perpetually generation to generation out of work…leaving the cotton picking to hordes of illegal grateful immigrants. Of course the cotton is shipped to China and mixed with polyester, made from cancer causing petrochemical motor oil, and turned into 50/50 cotton to polyester cheap flammable clothing. Watch out for that cigarette.

    So Pres Trump tries to break the Trade Deficit and bring the jobs back home and give Americans more jobs, and get the unemployed off welfare and the backs of the American tax payers. But not…the Democrats chastize him, the Pres, for it…go figure…!

    Cracee American Liberals.

    What Americans don’t know is they can move to Kaua’i and work 3 jobs and survive…or go on welfare the first day on island. And leave the jobs to the poor Chinese…communists…in China…!

    While the Russians are hacking our elections and bank accounts and our own brilliant CIA, FBI, NSA, and AMA failed to detect or diagnose it, in the meantime we are unable to accept any of the blame for it, after all, we are the Almighty Americans, whom ain’t won a war since #2 when it hit the fan across both the Atlantic and the Pacific.

    Charlie


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