Last year on the eve of Cyber Monday, Amazon’s founder and CEO Jeff Bezos revealed the company’s plan to develop drones that would deliver packages to a customer’s doorstep. News of these drones spread quickly, and as a result Amazon broke its Cyber Monday record with a figure of about 426 items ordered per second. By utilizing the advertisement practice of embargoing, or holding the news about these drones until the ideal moment, Amazon was able to maximize its profit and increase sales just in time for the holiday shopping season.
Since its plan the year prior was such a success, Amazon again released news about its latest technological advance this year in the form of small orange robots. Weighing about 320 pounds, these robots are created by Kiva, a Massachusetts-based company Amazon acquired in 2012 for about $775 million. Able to lift up to 750 pounds of shelving, these Kiva robots glide across the floors by following rows of sensors to bring products to fulfillment stations, where human employees identify the specific products needed, check them for quality, and prepare items for shipment.
Currently about 15,000 of these robots are being used in 10 warehouses within the United States. Because the actual employees in these warehouses no longer need to walk down aisles to locate products, there is up to 50% more space available for inventory within the warehouses. Consequently, it is now possible to have a wider variety of merchandise and the probability of an item going out of stock is less likely. The robots have also cut down processing times for orders from well over an hour to as little as 13 minutes.
The main concern with this major technological development made by Amazon is that the need for human employment will be diminished, and since Amazon is such an influential company, others might follow suit. Dave Clark, Amazon’s senior vice president of worldwide operations and customer service, stated that despite skepticism, the company hired 80,000 seasonal workers for this holiday season. This figure has increased 14% from last year. However, it is unclear if the number of people hired makes up for the amount of employees who could have lost their job to the automated machines.
Worries that technology might soon cause a loss of jobs should be taken quite seriously. Last year, Oxford University did a study in which they analyzed over 700 careers in depth and found that 47% of US employment, about 60 million jobs, could become automated within the next two decades. Most people today are employed in generally routine and consistent workplaces, where they experience similar work situations on a regular basis. In many cases, development of machines that would be able to follow algorithms to perform similar operations that employees complete today.
Many critics point to the effect of mechanization on the agriculture industry in the US as proof that a significant unemployment problem will not be caused by an increase in automated employees. Although millions of jobs were lost due to farm workers being replaced with machines, food prices today are now cheaper and these workers were able to locate jobs in other industries. This is not as likely to be the case today; today’s information technology is general and can be utilized for various purposes such as translation of language and automatic product recommendations that are commonly used today. As growth in productivity continues to outpace growth in employment and human jobs become displaced by machines, the labor force will have to learn to adapt to the new global economy.