Are Cashier Jobs Going to Disappear?

Is there any segment of the retail market the Amazon doesn’t seek to dominate?

Apparently not.

Introducing Amazon Go, courtesy of Bloomberg:

For the past year, Amazon employees have been test driving Amazon Go, an experimental convenience store in downtown Seattle. The idea is to let consumers walk in, pick up items and then pay for them without ever standing in line at a cashier. Amazon is vague on the mechanics, but the store relies on a mobile app and some of the same sensing technology that powers self-driving cars to figure out who is buying what.

The concept is being tested in tandem with Amazon’s acquisition of Whole Foods Market for 13.7 billion in September. Whole Foods has, since then, been aggressively slashing prices on products, much to the dismay of it’s competitors.

Though the nascent concept has some issues, progress is being made:

Amazon unveiled Amazon Go last December, saying it planned to open the store to the public early this year. However, the company encountered technical difficulties and postponed the launch to work out the bugs, The Wall Street Journal reported in March.

Seven months later, challenges remain, but the “just walk out” technology has improved markedly, says the person, who requested anonymity to speak freely about the project. And in a sign that the concept is almost ready for prime time, hiring for the Amazon Go team has shifted from the engineers and research scientists needed to perfect the platform to the construction managers and marketers who would build and promote the stores to consumers.

Should Amazon’s initiative prove successful, this could spell doom for many people who earn a living working as cashiers.

If Amazon begins extracting sizable market share from the grocery industry through deep discount pricing and cashierless stores, it will, undoubtedly, spur it’s competitors to follow suit.

And they may not have a choice in the matter – if they plan on surviving.

The grocery business is ruthless and unforgiving, and always has been.

Razor-thin margins that hover around 1-3% are the norm, with each player in the industry hyper-sensitive to financial shocks (including political platforms that call for massive increases in the minimum wage).

Grocers also face increased competition from large-scale discount brokers (including foreign players such as German retailer Lidl, which is making its debut in the US very soon) and dollar stores, all of which continue to put downward pressure on margins, making it absolutely necessary for the most creative and ruthless cost-cutting plans to be implemented.

And when it comes to finding areas where costs are eating away at ever-shrinking profit margins, few are as conspicuous and tempting as payroll (a large portion of which is used to compensate cashiers).

A study done by the Brookfield Institute for Innovation & Entrepreneurship at Toronto’s Ryerson University said that cashiers are one of the top five occupations that could be adversely affected by automation, with a 97% chance that 309,000 employees will lose their jobs.

The study indicates that low-skill occupations, such as a cashier, can effectively be run as an algorithm, given that they are repetitive and unvarying. This means that we’ll be heading into an era marked by a significant decrease in low-skill occupations performed by humans. With hardware and software taking care of the mundane and monotonous tasks, the economy will undergo a restructuring that will prove to be favourable to individuals who are endowed with exceptional cognitive abilities.

What about those who do not posses the intelligence and skills to function in an economy where occupations that require high cognitive abilities are the norm? The problem is not only the possibility that fewer occupations will be available in the future, but those that become ubiquitous will, by their very nature, demand a certain level of intellectual prowess on the part of individuals (and intelligence, at least for now, is said to be largely determined by genetics), if they are too be performed in an efficient and competent manner.

What will happen to these people? Will they find their place in the new high-tech frontier, or will a new a new social safety net, such as the Universal basic income, have to be introduced?

What is clear is we must start thinking about these questions sooner, rather than later, if we wish to build a high-tech society that will allow every individual to participate and live a happy, productive, and meaningful life.

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