The end of people? Amazon vs. Costco

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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When I was young, during WWII, my mother shopped in a small grocery store in which the clerks used grabbing tools to bring down items from high shelves, then type in the prices on a cash register, count out the change and bag the items.

One clerk per customer, one at a time. Costly.

Today, you walk into a Costco having very few employees per customer, select your own items, go through a checkout that scans the items, pay with a credit card and are out.  Fast and cheap.

Back in the day, we had a coin-slot phone, and once a month, a phone company collector would show up to empty out the coins, and if we had used slugs instead of coins, he (always a “he”) would charge us for the slugs. It took a lot of collectors to collect those coins, nationwide.

Today, no coin collectors for smartphones.

These days, auto manufacturers use robots instead of Henry Ford’s employee-heavy production lines. Banks use ATMs instead of tellers. And remember all those phone operators who said, “Number, please,” and after you told her (always a “her”) she made the connection for you.

The list goes on and on. Millions upon millions of jobs, lost to progress. Yet, even with our much higher 2017 population, unemployment is not at rampant, depression-style levels. Depending on your perspective, it’s not too bad at all.

How can we have lost so many jobs, and not have huge unemployment?

The Week Magazine, December 23-30, 2016
Amazon’s cashier-less grocery store

“The most disruptive retailer since Sears Roebuck and Montgomery Ward hit the scene is noodling again on something new,” said Adam Lashinsky in Fortune.com.

Amazon’s latest bid to reinvent the way we shop is a high-tech grocery store called Amazon Go, which does away with the hassle of checkout lines and cashiers.

Instead, shoppers scan their smartphone when they enter the store, pick out what they need, and simply walk out with their groceries. All the while, sensors and cameras inside the store keep track of what customers pull off the shelves, with the items automatically charged to their Amazon account when they leave.

Right now, the shop is an experiment—there’s one 1,800-square-foot location in Seattle that’s available only to Amazon employees—but the company says it hopes to open to the public in 2017. 

“This is the shopping experience we’ve all been waiting for,” said Lance Ulanoff in Mashable.com. A few people might grouse about how technology is killing off human interactions, but what exactly is so meaningful about unloading a cartful of groceries for the cashier to wordlessly scan?

The “few people” are not “grousing” about “meaningfulness.” They are grousing about lost jobs.  No, not even jobs.   . . .

. . . They are grousing about money.

Most of us just want to get in and out of the supermarket as quickly as possible. And, the grab-and-go shopping concept is ready for prime time. It uses technologies like computer vision and sensor fusion that have already been proven to work in self-driving cars.

“But what about the jobs?” asked Justin Fox in Bloomberg.com. Nearly 3.5 million people were working as cashiers in the U.S. last year, representing about 2.3 percent of total employment. If checkout-free shopping catches on, a lot of those jobs will almost certainly be destroyed, though many new ones might also be created.

And there is the key. Technology has destroyed obsolete jobs and created better jobs. That has been happening for at least a century.

When ATM machines reduced the need for bank tellers, banks actually hired more workers because the cost savings allowed them to open more branches. “Anybody can get rid of a cashier with a robot,” said Jordan Pearson in Vice.com.

But Amazon’s raison d’être has always been data. With cashier-less shops, the retail juggernaut will be able to find out all it wants to know about your shopping habits when you’re offline, which is still how nearly everyone buys their groceries.

Amazon will use that information, as it always does, to streamline its marketing, product recommendations, and supply lines. “Amazon isn’t trying to kill cashier jobs. It’s after something bigger.”

Yes, Amazon is after data, but still, it always is trying to kill cashier jobs.

Killing cashier jobs saves Amazon money, which makes Amazon competitive. And the data Amazon wants really isn’t all that rare.

When you go into your neighborhood chain store, and you pay with your credit card, the chain knows exactly what you bought, when you bought it, and what you paid.

By analyzing that data, the chain can deduce whether you have children, how old they are, how old you are, whether you live with someone of the opposite sex and, if the chain also has a pharmacy, a great deal about your health.

Further, if the store uses loyalty cards, whatever information you gave to get that card, is added to your dossier.

Amazon isn’t going to learn much that food chain stores don’t already know (although it knows more about non-food and probably is more equipped to use that information.)

Amazon wants to learn what it doesn’t already know about you, so it can combine food information with all the other information it knows. The more it knows about you, the more directed their marketing efforts can be.

When you walk through their store, it can have a better idea about what the sensor-driven shelf tags should say to you. (“Mr. Smith, you bought bread, yesterday. Don’t forget about our peanut butter special.”)

Amazon wants to kill cashier jobs, too. And that has not hurt the economy. Greater efficiency grows an economy, for efficiency takes jobs away but gives more jobs back.

Although President Trump and the labor unions (there’s an unlikely team) rail about jobs going overseas, Amazon has killed more American jobs than any company building a plant in Mexico.

Where’s the outrage about that?

Forcing business to keep jobs here requires businesses to be less efficient. Companies don’t buy or produce overseas on a whim. They do it because it cuts costs and increases other efficiencies.

Trump and the labor unions look only at job counts, not at costs and product/service availabilities. 

But jobs are not what people want. People want money, the ownership of which allows them to lead the lives they wish to lead.

Rather than blackmailing companies to be less efficient, under the false impression that less efficiency will encourage greater employment, the government should supply people with sufficient money to allow them to buy more goods and services.

This would stimulate business, which would pay more people to produce those goods and services. In short, the government should adopt the Ten Steps to Prosperity (below), which not only would grow the economy and provide better jobs, but increase the happiness and well-being of the people.

That is, after all, the purpose of government, isn’t it?

Addendum:
Contrary to popular myth, low prices are not the secret to Amazon’s success. Convenience is.

Rather than run from store to store, trying to find the items you want, you can sit at home or work, in front of your computer, or even walk the street, smartphone in hand, and shop the world.

Yet, there is a limit to what you will buy online. You still may want to see and touch the items, and of course, if you go to the store today, you can have the item today — at no extra charge.

Amazon can’t and won’t match that, despite its doomed-to-failure drone experiment.

I have no special information, but here is my hunch about Amazon Go: Amazon doesn’t give a fig about opening a bunch of little, brick & mortar stores. Amazon wants the data and the store experience to compete with Costco.

That’s where this is headed, IMO, and Costco, Walmart, Target et al, had better be aware. Amazon is coming.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY