Amazon Employs Robots So That It Can Pay Its Human Workers Much More

The sparrow robot is able to pick up unpackaged items to sort them at Amazon’s BOS27 Robotics Innovation Hub in Westborough, Massachusetts on November 10, 2022. – Nothing is a matter of chance at Amazon. The robotics laboratory of the US e-commerce giant is developing the automation of its distribution centers around the world so that customers receive their orders efficiently in the shortest possible time. Delivering the Future” is the motto of this “hub of the robot universe” that is turning the company that Jeff Bezos founded 28 years ago to sell books over the Internet into a pioneer in distribution with its own technology and “made in USA” production. (Photo by Joseph Prezioso / AFP) (Photo by JOSEPH PREZIOSO/AFP via Getty Images)

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“How important it is that the utmost care be used to guard against the loss of a minute of a workman’s time.” Those are the words of Henry Ford as he explained relentless investment in automobile factories at Ford Motor Co.

Ford did so by adding people, along with machines. Crucial about what Ford did is that the additional capital (physical and human) didn’t render existing employees less valuable, it’s precisely what made losing those employees so costly. From the latter emerged the $5 workday, and a rush of the ambitious to Detroit.

It’s useful to think about Ford alongside the evolution of workers at Amazon. Presently the U.S.’s second largest employer, the New York Times cites “interviews and a cache of internal strategy documents” to make a case that Amazon’s “next big workplace shift” will be “replacing more than half a million jobs with robots.”

Seemingly eager to bolster its efforts to cast Amazon’s enormous investment in robots in a sinister light, the Times enlisted a prominent economist in Daren Acemoglu to throw gasoline on the alleged fire. The Nobel laureate observed that “Nobody else has the same incentive as Amazon to find the way to automate.” What Acemoglu leaves out (or those interviewing him left out) is that every business has an incentive to automate…as a way to benefit existing employees.

Just as extra human hands in the proverbial factory elevates existing hands through increased specialization, stop and think what machines can do for the output of existing workers. Which is just a comment that what Amazon is doing is Henry Ford all over again. Since worker turnover is costly, Amazon continues to invest in technological advances meant to powerfully increase the productivity of its existing workforce.

Which speaks to the subtlety about Amazon’s employment of robots that is plainly lost on the reporters at the Timesand perhaps Acemoglu. Thought of in a more nuanced light, businesses are constantly looking for ways to automate what was formerly done manually not with an eye on putting employees into breadlines, but to change the nature of their work for the much better.

The Times portrays these enhancements in a dark light that foretells 600,000 innocent workers left unemployed, but the happier story is that stories of automation are invariably stories of increasing, higher-compensated employment. Which shouldn’t surprise readers one bit.

Lest anyone forget, all work is an effect of investment. And those with capital to put to work don’t direct it to businesses actively turning their backs on progress, rather capital goes where capital is treated well. Translated, Amazon’s high treatment of its existing employees with the best-of-the-best robotic investments has the Seattle innovator well ahead of the competition on the matter of arming its human employees with state-of-the-art technology. The latter, if successful, will prove a magnet for even more investment capital seeking returns rooted in human workers thriving precisely because they have so much mechanized support.

Which means the same robotic future that has given the Times reporters the vapors will, if successful, render the U.S.’s second largest workforce even more prosperous. This isn’t a speculation as much as it describes the history of work.

The more investment and subsequent automation that finds its way into the workplace, the more valuable are the workers who arrive at the workplace each day. In other words, and channeling the New York Times headline, Amazon plans to used robots to do the jobs of 600,000 workers so that those 600,000 workers can achieve quite a bit higher pay using their hands and minds much more productively.