According to their research, workers’ employment, hours, or wages haven’t fallen. But wages have risen less rapidly than overall economic growth, with owners getting an increasingly large share. Autor suggests this trend could continue as automation increases. “No, the robots will not take all of our jobs,” he says in a Brookings video. “The concern should not be about the number of jobs, but whether those jobs are jobs that can support a reasonable standard of living.”
Walmart has been criticized for years for its low pay and skimpy health benefits. The company is also known for its obsession with holding down costs, a factor in its drive toward automation. “We’re maniacal about expenses,” said Brett Biggs, Walmart’s chief financial officer, at an investor conference in March. “I think we have lost some of the edge on that over the last year. You can feel it coming back.” Biggs told attendees a nostalgic tale about arriving at Walmart and experiencing his first “supplies roundup,” when he and his coworkers dug office supplies out of their desks and dropped them in a central location so they wouldn’t have to order more. Then he explained that Walmart employees recently got excited about figuring out ways to reduce the length of a receipt tape.
Still, in January, Walmart—benefiting from an enormous corporate tax break under Donald Trump’s tax reform—said it would raise its starting hourly wage to $11 (around $19,000 a year for 34-hour weeks), hand out bonuses, and provide more benefits to full-time employees. Low-wage workers seemed to be gaining power amid a tight labor market.
In fact, as its strategy unfolds, it seems that Walmart may cultivate a relatively smaller, better-compensated core of employees who are supplemented by automation and a flexible cadre of gig-economy workers. Ten years from now, “there will be fewer associates in the Walmart store ... and we will see the wage rate continue to go up,” Walmart’s chief executive Doug McMillon told The Economic Club of New York in November. “What we would love, not just for Walmart but for retail, is to earn a better reputation about the jobs themselves.”
Given high turnover in retail, McMillon said, Walmart expects to eliminate jobs mostly through attrition. As it automates tedious tasks, such as finding inventory in the back room, it expects to offer jobs that pay more, such as customer service and merchandising.
In all of this, Walmart is trying to adapt to the rapid growth of Amazon, which reported almost $178 billion in revenue last year—about $315,000 per employee. Walmart is much larger, with $500 billion in annual revenue, but because it employs about four times as many people, that revenue amounts to just $217,000 per employee. (According to the Wall Street Journal, Walmart is in early talks with the insurer Humana about possible business relationships such as an acquisition, which would be a way to diversify away from the retail business where it competes with Amazon.)