Is Unemployment Amazon’s Fault?


(This post originally appeared on Forbes)

The U.S. Bureau of Labor Statistics will announce April’s unemployment rate this Friday and expectations are that it will be at or near the 5.5% it was last month, a significant and positive change from the 10% level it was back in 2010. This is good news. However, many economists argue that the official unemployment rate doesn’t give a true picture of those that are truly unemployed. A report last year said that 92 million Americans were still not participating in the workforce and the U6 unemployment rate, which expands the unemployment rate’s definition to include “discouraged workers” (people without jobs who have given up looking for work) and “marginally attached workers” (people without jobs who would like to work but have not sought employment recently) is around 11% – well above its levels from before the last Great Recession. Why? Some blame government policies. Others point to a slow world economy or weather or sluggish U.S. growth and these are certainly factors.

But I blame Amazon.

Well, not just Amazon. Amazon is a great company that’s added hundreds of thousands of jobs since it began business. But quietly, yet steadily, Amazon and other companies both big and small are adopting technologies that are replacing people.  ”Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing,” aid Bill Gates last year. “Technology over time will reduce demand for jobs, particularly at the lower end of skill set. … 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”

Want some examples? These are just a few innovative companies that are employing technology to replace people.

Amazon. The Internet giant has already killed thousands of jobs previously at brick and mortar chains that could not keep up with the trend towards online sales. But that’s only the beginning. The company wants to use drones to replace its drivers both internally and at its shipping partners. More dramatically, Amazon is undergoing a transformation of its warehouse management systems, deploying 15,000 robots at ten of its fulfillment centers which are designed to pick-up and deliver entire warehouse racks and unpack inventory.  The robots are making the warehouses more efficient, and cutting back on…people.

Microsoft.  Recently the software giant teamed up with robotics manufacturer KUKA to introduce a “lightweight robot that is able to sense its way around a complex task and perform precise automation movements safely and securely” like performing the complex and delicate action of threading a tube into a small hole in the back of a dishwasher. The machinery is using Microsoft’s cloud based Azure technology to deliver data and updates for humans to monitor. Microsoft is investing heavily in Internet of Things technologies and developing software to help machines talk to machines and robots to perform tasks that were previously performed by….people.

Capital One Bank. Gone are the days of depositing and cashing the weekly paycheck in your local bank branch. Branches are disappearing. We can now make a deposit simply by taking a photograph of a check. That, of course, is for those who are still receiving checks – many of us are getting paid and paying our bills electronically and managing all of our banking online. For those that do need the services of a branch, banks like Capital One are combining the experience of banking with the corner coffee shop at their 360 Cafes, staffed by baristas and only a couple of bank employees who can take care of just about anything on their trusty tablets. The popular branches are not only using technology to transform their branches into more a community center, but also reducing a key cost….people.

WASP Barcode. This maker of barcoding technology is the one behind the scenes, helping its clients implement the latest systems for their manufacturing and inventory management (WASP is a client of my company). What’s the future of bar-coding? Specially designed “self-scanning tunnels” where your purchases at a supermarket are scanned quickly from any direction and “image barcodes” that can pick up information about an item from a picture on the label. 2D barcodes, which can store 7,000 characters of data will soon replace the current 1D barcodes that can only store 85 characters providing more information for machines to automatically check on inventory and order more product.  Soon, most of our retail transactions from food to clothing, will be done without the help of…people.

Olive Garden. Following in the footsteps of Applebee’s and Uno’s, the Italian eatery chain announced last month that it will deploy tablets made by Ziosk at its 800 locations around the country. Soon, you will be able to have a delicious meal by simply ordering and paying it for at your table without any interaction with a waiter or waitress. You can even play games and gaze at advertisements while you wait for your food. Restaurant chains around the country, always looking to squeeze a few more pennies from their already tight profit margins, are jumping on the self-service tech bandwagon in order to cut their overhead (translation…people).

These are just a few examples in the limited space I have. I’ll accumulate more in the future. Because this is the future. This is reality. This is about companies who are using technology to do things quicker and better. And so the next time you hear about the number of unemployed in this country you may want to stop blaming the government, the weather and other countries and instead consider just how many less people have jobs today versus a decade ago because technology has taken the work away from them.


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