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Is automation replacing retail jobs?

March 4, 2011 | 10:16 am

 

The nation's fragile economy is finally starting to recover, but some sectors are still shrinking. The retail sector, for example, lost 8,100 jobs between January and February. Some observers worry that jobs in that sector won't return quickly because employees are being replaced by machines, according to a story in The Times on Friday. 

The applications seem endless. Vending machines sell iPods, pizzas and bathing suits. Robots stock shelves and load packages. Self-service checkout machines render checkout clerks nearly obsolete.

Those self-service machines are probably the ones you encounter most: at retailers such as Fresh & Easy, Home Depot and Ralphs. They make economic sense: Retailers, trying to save money in a tight economy switch to machines, which don't require health benefits or high salaries.

According to NCR Corp., which makes the machines, retailers can reduce the time customers wait in line by 40% by deploying self-checkout. They can increase the number of customers they get through checkout lanes by 20%. And they can bump up revenue per hour by 7% by deploying employees to other parts of the store to help customers.

Greg Buzek, of consulting firm IHL Group, says that retailers can also reduce labor in the front of the floor by 33% over two years by using self-checkout machines. The average wage for cashiers in unionized supermarkets in California is $22 an hour, Buzek said, so redeploying workers can save cash.

Some technology advocates say this redeployment is a good thing: Workers can be freed up to do more valuable work. Daniel Castro, a senior analyst with the Information Technology & Innovation Foundation, estimates that if self-service technology was more widely adopted, the economy in the U.S. would grow $130 billion more annually, and provide American families with an extra $1,100 in annual income, because of the growth of productivity.

But how it will affect the labor market in the short term remains to be seen. Many workers in retail say they're having trouble finding work. Many have high school diplomas, but no further education, and worry that they don't have the cash or the time to undergo retraining if retail jobs are really gone for good.

-- Alana Semuels

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