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Greg Hutchins

Innovation

I’ve Seen the Future of Work

And I don’t like it

Published: Thursday, September 7, 2017 - 11:01

I live in the Northwest of the United States. We are now the small business and startup mecca of the country. Why? San Francisco and Silicon Valley are too expensive. So, folks are moving in droves to Portland and Seattle; one-third of the license plates in my hood are out of state.

But there are challenges. The cost of housing and living in the Northwest is now approaching the San Francisco standards of four years ago. The surplus of new folks, mainly millennials in their late 20s and early 30s, moving into town require livable-wage work. So with the influx of these folks into Seattle and Portland, the cities are raising the minimum wage to $15 per hour.

And this is a problem for many small-business owners.

The core problem

We are now confronted with the law of unintended consequences. The idea of a livable wage appeals to politicians, who want votes, and to millennials, who need work. One of the best ways to curry votes is to appeal to the mass of voters who are low-wage workers. This is done mainly by politicians who have never run a small business. And here lies the unintended consequence.

The Washington Post recently ran an article titled, “A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals.” In today’s small-business climate, paying $15 an hour for service workers is high when retail margins are so thin. The additional cost for service workers must be passed on to customers, who may rebel against the higher cost of goods and services, and buy online. The alternatives are for retail owners to cope with the lower margins, or simply go out of business.

This is a conundrum that all small-business owners in the United States will face as the minimum wage goes up. Either way, the options for this section of the economic pie are bleak. It’s also hugely critical because small business is the major growth employer in the United States and frankly for most of the world.

So what does the small-business owner do?

I was walking to our local park a few days ago and saw the future of retail, and maybe all, work.

I looked into the window of retail space called Kombucha SOMA Taproom. There were a few customers sitting at various tables. The place looked laid back and friendly.

I wanted to try kombucha, which is a fermented black or sometimes green tea drink. I pushed against the front door to go in. It was stuck. I pushed harder but still was locked out.

I spent a few moments looking through the plate glass window, wondering why the half-dozen folks inside could get in, but I couldn’t. As well, the customers inside were waving at me. I waved back. Then they pointed to the description on the door.

This is what I read: “Swipe your credit card to access SOMA Kombucha Taproom. This is a self-serve, unstaffed facility.”

What was going on? Didn’t any coffee shop, kombucha tasting place, or retail space need real people? Folks to deliver service. Folks to talk with. Folks to commiserate with.

But at SOMA Kombucha Taproom, there is no retail worker or server. This is a totally automated retail shop.

No way… automation had come to my hood.

I was stunned. What are the implications for all those retail baristas, service workers, and others?

I get it from the owner’s point of view. It’s really hard to make a profit (margin) when you’ve got to pay a $15/hour minimum wage plus benefits. Automation really looks good, when you’re struggling with an either or: high-priced labor or no margin and no business.

Future of work

San Francisco now has robotic baristas. Driving will be automated in a few years, thanks to autonomous vehicles. Food shopping is being automated, and there are with plans for drone delivery. What’s next?

No human assistance for government services, shopping, coffee shops, libraries. It’s gonna all be automated.

But what happens to all those workers who will be displaced? Don’t know.

What I do know is that that future of work is already here. And I don’t like it.

Used with permission of the CERM Academy.

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About The Author

Greg Hutchins’s picture

Greg Hutchins

Greg Hutchins is an engineer, certified enterprise risk manager, and the founder of the Certified Enterprise Risk Management Academy, Made in the U.S.A., WorkingIt.com, and Quality + Engineering.