Before Replacing Jobs With Machines, Ask These Questions

For one, what’s the objective -- to improve service, save money or both?
October 2017
(Alex Marshall)
Alex Marshall
By Alex Marshall  |  Columnist
Senior Fellow at The Regional Plan Association in New York City

When I travel abroad, particularly to poorer countries, I see people doing jobs that in the United States have been mechanized or eliminated, such as washing clothes by hand or cutting hay with a scythe. But during a recent trip to Europe, I saw the opposite: machines doing jobs that I was used to seeing people doing in America.

In Stockholm, for example, you can reserve a rental car through Hertz online and then pick it up at a parking lot using a little machine similar to an ATM. You put in your credit card, the machine spits out some keys, you take the keys to the car and drive away. No human in sight.

At the city’s beautiful main library, you can return a book only after first scanning it into a machine. I’ve seen automated checkout in libraries in the U.S., but never automated check-in. And even relatively nice restaurants, with well-composed dishes and waterside seating, often have no wait staff. You order and pay for the food at a counter.

Moving on to the Netherlands, a large hotel outside Amsterdam has vending machine-sized boxes where a lodger can check in without talking to a human. As with the Stockholm rental car system, you put in your credit card and out comes a key for your room. The same hotel has a cigarette machine that scans your identification card first to see if you are old enough to buy tobacco legally.

I have not seen any of these things in the United States, where for the most part humans still handle car rentals, check in hotel guests, manually log in returned library books or card a tobacco purchaser. Why is this? Why are these areas of Europe apparently more automated than the United States, and is it a good thing? And what can public officials here learn from it?

The why is probably because hotel desk clerks and car rental staffers in Holland and Sweden earn more than people who do those kinds of jobs in the United States. It’s decidedly easier in Holland or Sweden to make a life with such jobs, particularly given that government provides or requires health care, family leave, vacation time, pensions and other benefits. It’s also true that hiring is “stickier” in those countries because, thanks to laws and widespread unionization, you can’t fire someone easily. This gives businesses a particular incentive to replace people with machines, or at least to provide less human-centered service.

Not everywhere in Europe is as automated as Holland and Sweden are, and the reason, again, is probably relative wages. In less-wealthy Italy, at Venice’s Marco Polo Airport, it was the more tedious, familiar routine at the Hertz counter: clerks filling out stacks of paper for each customer, then sending them to another counter outside, also staffed by humans. Clearly, this was a different universe than Hertz in Sweden.

Having a machine replace a human seems cold, but it’s actually the definition of getting richer as a society -- doing more with less. Economists call it productivity growth. That, of course, is of little comfort to someone whose job has been automated away. Yet, keeping in mind that cross-country comparisons of employment are not precise because countries count it differently, it’s hard to see a definitive impact from these new forms of automation. Sweden’s unemployment rate in June was 6.9 percent, well below the average for the European Union. Holland’s jobless rate was 4.9 percent, just a half-point higher than that of the United States.

Will we see this cycle of automation repeat itself in the U.S.? Almost certainly. Will the machines take away all the jobs and not give any back, leaving us all out of work? Or, to reframe it more positively, are we entering into a “post-scarcity” society, where if we structure things correctly we will all live longer and work less? Maybe.

But that doesn’t mean we necessarily ought to rush to embrace all automation. There are questions that a local government official in the U.S. can and should ask. What is the objective in deciding, say, whether to install automated book check-in at the public library? Is it to improve service, to save money or both? If a lot of people are out of work in your town, maybe this isn’t the right moment to automate another job.

And there are larger considerations. Sweden, for example, has accepted large numbers of immigrants from Syria and other parts of the Middle East. The country may want to work to slow or reverse the pace of automation as it absorbs this presumably less-skilled population into the workforce.

In my view, replacing people with machines is good, but only if the benefits of automation are spread widely and not just to the owners of the machines, such as the Hertz company. That’s why tax structures, worker benefits and employment policies should be part of the discussion, not just the number of jobs. We have better things for people to do than be parking lot attendants, to name a job you generally don’t see in the richer parts of Europe. Being a parking lot attendant, while perfectly honorable, is a job better left for a machine.