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January 24 2018

Cashier-free Amazon Store Opens in Nation's First $15-Minimum-Wage City

by Patrice Lee Onwuka

Amazon opened the nation’s first register-free, cashier-free, and cash-free store. The retailer is pushing the boundaries of retail by expanding the concept of grab-and-go and customers are excited. An underlying story though is what this innovation means for the future of the retail workforce.

Amazon opened this concept convenience store to the public in Seattle, Washington, where it is headquartered.

Customers with a smartphone and bank card can shop freely as sensors, computer vision, algorithms, and other technology track what they take off shelves and charges them when they exit. You never have to take your wallet out or join a checkout line.

Reporting makes the experience at the store seem fascinating and even surreal:

"It's such a weird experience, because you feel like you're stealing when you go out the door," said Lisa Doyle, who visited the shop Monday.

Shoppers enter by scanning the Amazon Go smartphone app at a turnstile, opening plastic doors. When an item is pulled of a shelf, it's added to that shopper's virtual cart. If the item is placed back on the shelf, it is removed from the virtual cart.

Not everyone can shop at the store: People must have a smartphone and a debit or credit card they can link to be charged. Amazon said families can shop together with just one phone scanning everyone in.

One shopper, Paul Fan, tested the technology by turning off his phone and taking items and putting them in incorrect spots. The app was still able to tally up his items correctly.

"It's really smart," he said.

While the store looks like most small grocery stores, it lacks cashiers and baggers. Amazon Go does rely on employees to make food, stock shelves, and provide customer service.

Amazon Go’s technology is exciting and will be great for customers. Faster shopping saves time for other activities and reduced operating costs should lead to lower prices. So far, Amazon has proven that with its fast and free – or reduced – shipping costs.

If cashier-free technology spreads throughout the grocery industry, which is likely, we may see more sweeping changes to the retail industry. According to the Bureau of Labor Statistics, there are 3.5 million cashier jobs and the median pay is $9.70 per hour.

As technology develops, such as self-service checkouts and increasing online sales, the job outlook for cashiers could change as low-wage workers are displaced – many of whom are women.

Technology becomes attractive to employers as the costs of labor rises. National analysis indicates that higher minimum wages encourage employers to automate. As activists and lawmakers pursue $15 minimum wages, they may be accelerating the technology that eventually replaces the workers they claim to help in the long-run and triggering other unintended consequences in the short-run.

Seattle, where Amazon Go was launched, was the first city to increase the state minimum wage to $15 per hour in 2014 and numerous cities have followed. The impact of Seattle’s minimum wage was to give low-wage workers a $125-per-month-pay cut. That doesn't necessarily take into account the impact of automation.

The news is not all bad. History shows that technological advances in production create new jobs and careers for American workers. Ones that we can’t imagine today 

However, as we anticipate coming changes, it’s critical that we explore how to retool the workforce with the skills and for jobs of the coming decades.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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