Lowe’s New Customer Service Representatives and the Minimum Wage
Lowe’s new in store service representatives won’t need bathroom breaks, vacations, or retirement account. They won’t get sick. Hell, you don’t even have to pay them a salary. And what’s even better, or maybe worse- I’m not quite sure- is that they may be able to help me find the esoteric piece of hardware I need better than the current human ones. And they will be able to do it in as many languages as are necessary.
They’re robots, and you can read about them here. Make sure you watch the video.
I live in the Northwest. As you may know, the Seattle City Council has passed an ordinance to increase the minimum wage in the city over a few years. Well, people do need a living wage. Good for the people who get it. But not so good for the people who lose their jobs or aren’t hired due to higher labor costs. On balance, I don’t know how that all comes out, so please no emails telling me that more people are helped than hurt. I have no idea. Neither, I suspect, do you. Depends over what period of time we’re talking, I suppose.
Meanwhile, the people who make robots should send the Seattle City Council a thank you note and maybe a box of chocolates for subsidizing their business by making robots more economically attractive to potential customers. There are always unintended consequences when you start messing with complex systems.
I’m guessing these robots, and others, are going to get cheaper and work better. This is going to happen faster than we imagine and in places we wouldn’t expect. Who can diagnose a disease faster and better? Your family doctor or a computer with access to every condition, symptoms and diagnostic outcome stored digitally? That computer wouldn’t ignore ebola just because it had never seen it before.
It was, by the way, three months after the current outbreak appeared in Africa that it was finally identified as ebola. Apparently, one specialist who had focused on the disease noted that a lot of the patients were sneezing. That was a symptom he’d seen before.
So here we are in the middle of a still unresolved financial dislocation (how’s that for a benign characterization?) and a game changing technological innovation that’s going to have a huge impact on employment patterns in this country. That last time that happened in this country was in the 30s, when we had another financial dislocation and the mechanization of farming (and the dust bowl) forcing people off their land.
To put a human face on what that was like, you might want to read John Steinbeck’s The Grapes of Wrath if you haven’t already.
Over time, the mechanization of farming had a massively positive impact on food production and made people available for other jobs as the U.S. emerged as a global economic power. But it wasn’t pretty and it didn’t happen quickly.
Are robots as game changing as the mechanization of farming? I don’t know, but look for customer service robots in some of the retailers in our industry eventually.
Great post. Grapes of Wrath is one of my all time favorite books. Great reference.
Hi Mark,
I was pretty happy with it too. I’ll be disappointed if it doesn’t generate some comments and questions. I thought for sure somebody would come after me for not fully supporting minimum wage increases. Oh well, it’s early yet.
Thanks for the comment,
J.
If self-serve checkouts at grocery stores are any indication, I can foresee robots supplementing human associates- but, not replacing them entirely. Why? Because those self-serve lanes are typically slower then the human-staffed checkout lanes. Because the machines aren’t particularly user-friendly… and of course, the customers don’t always know the difference between a granny smith and a delicious red apple… and customers are easily confused… which means that the customers themselves oftentimes slow the system down to ridiculously slow levels. Bottom line: until the masses are competent enough to interact with artificial intelligence (or even, basic machines), then we’ll still need competent people to help move the system forward in an expeditious manner.
Besides: it’s still impossible to joke around with a computer. Human interaction will always have intrinsic value, no matter how smart/useful/helpful/whatever the machines become…
Hi Bud,
Some people are going to lose jobs, some are going to get them. That’s the way it’s always been as technology changed/advanced. And we probably can’t imagine exactly what form that change will take. One thing I will tell you- the robots and the software that governs them are going to get better. Just like the self-serve grocery checkouts have. And, just like with the grocery checkouts, some of us will choose to use them and some will not. Those who do will figure out the idiosyncracies of the system. I agree with you about the intrinsic value of human interaction. But remember that we’ve been willing to give it up in certain circumstances. Online shopping comes to mind. In other cases, like with banking, we’ve been “encouraged” to as technology has made economic sense. I mean, it’s not like robots (cash machines?) haven’t taken away some jobs before now. While I think it’s going to accelerate, it’s hardly new.
Thanks for the comment!
J.
Jeff,
Its funny you bring this up since I just recently just had a big discussion in one of my MBA classes about the economic effect of raising minimum wages. From my understanding of the minimum wage law (my own personal opinion, not trying to validate just rationalize) which became public policy in the 1930’s during the great depression, it was designed simply as a starting point for a person entering the workforce for the first time with no developed skill set. Minimum wage was never meant to provide enough income for a single worker to support a family, buy a house live the full American Dream etc. While raising the minimum will will undoubtedly cause some to lose their jobs, it also has some positive benefits. America, being a Capitalist economy, uses minimum wage increases as a means to increase production cost thus forcing companies to seek out cheaper alternatives i.e. Robots in our “race to the bottom.” Without this driving force do you think we would have half the technology we do today? Debatable.
However, I don’t necessarily believe robots will ever replace retail employees completely since many shoppers like that human interaction a sales representative provides such as “what do you think of this dress?,” “do you like it in this color?.” That is a sales representatives added value and it may just be enough to help some of them keep their jobs, at least in the foreseeable future. Indefinitely, I’ll let someone else be the judge of that.
Just some added economic thought.
Cheers,
Hi Nate,
Don’t expect robots to completely replace people either. What I do know is that history tells us that new technologies or ways of working cause some jobs to go away, and some new ones to be created. It’s often a surprise, and usually resisted. I’ve already seen automation being used for ordering in some restaurants, and I’d be worried if I were a long haul truck driver, just to name a couple. And cash machines have cost lots of bank tellers their jobs, but we don’t quite think of those machines as being robots because they don’t look the way the Lowes robots look.
Good history of the minimum wage. I think the same transition would happen whether there was a minimum wage or not, though the timing and speed might be different. I think the minimum wage is a band aid. It doesn’t address the issues of improving productivity and competitiveness that are the longer term keys to higher living standards and income.
Thanks for the comment,
J.