A friend just returned from vacation and described her stay in Europe at a new hotel. CitizenM. She’s a lady of some refinement and not easily impressed so I did a little research on the company. Their business model is to streamline and automate as many hotel processes as possible and radically reduce the number of in-house employees. All guests reserve rooms via the interwebs using transparent dynamic pricing. Each day is priced according to demand so a Saturday in New York might be twice as much as a Tuesday. The more flexible you are the more you can save – or splurge. Self check-in at an automated kiosk in the lobby takes one minute. Check out is thirty seconds. There are no bell hops and no room service, but there are free movies and high speed internet.
The rooms are small, but very well designed with only one standardized configuration on offered. The public space – the “living room” – compensates for the lack of private space and supports sociability with 24 hour food and drink. There’s minimal differentiation between the staff so any “ambassador” is able to help any guest need from bartending to concierge service. I poked around Glassdoor and found the usual rift between management and staff, but that’s an ancient dynamic. The folks with hospitality graduate degrees from Cornell are unlikely to feel equal to the plebes in logo uniforms. And the cleaning staff is entirely outsourced.
My curiosity about how this new hotel chain is organized goes back to my expectations about the future of employment. If a boutique hotel with 250 rooms can run on five in-house human workers per shift that says a lot about where most industries are heading. We see this in gas stations and supermarkets and everywhere else now. The low skilled humans are going away. I’m reminded of an old article from the satirical newspaper The Onion proclaiming Congress Passes Americans With No Abilities Act. In theory people are being liberated from mindless positions and freed up to do more meaningful productive work. Are you charming? Attractive? Ambitious? Flexible? Passionate? Skilled? Great! Or are you a lethargic middled aged curmudgeon with bad hair, a weight problem, and an associates degree in underwater basket weaving?
I came across this ad for an automated telemedicine center manufactured by Philips and Athena Health. This device is part of a larger trend. The proposed mergers between Walmart and Humana as well as CVS and Aetna suggests the American health care system might just sorts itself out in the absence of unified coherent federal leadership. We’re only a few more mega mergers away from a de facto single payer system. Perhaps some day soon we’ll all find ourselves wandering in to our local big box store to sit in a white plastic tube and get virtual care from a doctor broadcasting from Chennai or Manila – until the artificial intelligence gets good enough to diagnose our ailments without a human. There will be lots of high paying jobs developing and building these machines and overseeing the associated computer programs. And then there will be a few positions for people who wipe up the vomit and blood in the plastic tubes. All you art history majors. I’m talking to you.
In 1971 I went to nursing school but during training a 300 lb still groggy from surgery patient fell on me and I decided my interest in medicine would be better served by going into medical transcription. I enjoyed a fairly low paying but ‘modern’ – telecommuting – job for several years before my hospital medical records department bought a $1 million MIT designed transcription software package. It was originally going to be ‘for vacation coverage and overage’ but within 3 months they could lay off 80 people, it was so good, mostly. Learned accents and voices after only a few hours exposure to every individual dictator – with a 1% error rate. We were a union shop and so everyone got a generous buyout, and I retired, but the younger women went to other situations where only the dregs were available for transcription – first generation immigrant doctors with thick incoherent accents. Much slower, more difficult work – for the princely sum of 7 cents a line, or if you’re very skilled, fast or don’t give a damn, $15 an hour, usually with no benefits.
I wonder how ‘Merica!’ would feel if they knew their medical records were being typed by Alexa, or overworked slave laborers, often in third world countries, or that those exact same medical histories were zipping around the world wide web with dubious security standards.
Just came back from Tokyo, where the street trees are pruned meticulously and Metro stations employ multiple people to make sure the doors on the trains close properly.
The US obsession with getting rid of labor costs isn’t universal.
Um, I may be entirely missing your point, but isn’t cheap energy the only thing that can and has replaced labor? Will our supply of cheap energy continue to increase the way it has for the last several hundred years? Has something been found to replace high quality, highly concentrated fossil fuel?
To quote William Gibson, “The future is already here, it’s just not very evenly distributed.”
I completely understand the Peak Oil concept. I also understand that several things can occur simultaneously. Currently Dubai and Syria both exist. New Zealand and Bangladesh. Canada and Venezuela. A billion people will go to bed hungry tonight. Another billion are entirely too fat.
It’s possible that a sharp decline in energy supply – or a rapid increase in fuel prices – could accelerate automation and technological unemployment just as easily as putting people back to work doing manual labor. We just don’t know…
Humans are 25% efficient at converting biomass to mechanical energy. A steam turbine is over 50% efficient, and can burn all of it, not just the edible parts. On the other hand, humans aren’t horses – you can’t send them off to be turned into glue when you have an excess of them. On the third hand, if the market decides biomass is more productive used to produce electricity rather than to feed humans…
On the fourth hand, automation makes humans cheaper to employ, and starvation makes them desperate for work.
We should be burning the human bodies rather than burying them in prime land. Ever notice how the cemeteries have the best views?
Why shouldn’t the permanent facility be nicer than the temporary one? The ancient Egyptians sure thought that.
Many of those that are “entirely too fat” are that because they can’t afgord to access proper food. Or, Poverty has taught them short term thinking.
No, cheap energy isn’t really needed. It’s already cheaper than human energy, which is expensively supplied by eating. What is missing is computational power. The amount of energy needed by industry has been falling per unit output for decades, in line with the labor costs.
We’ve been grappling with this for over a century now. Labor is less and less important in getting us all the goods and services that traditionally took work to provide. The only decent solutions involve some excuse for providing and allocating those goods and services without requiring all that much work. This goes against traditional attitudes which demand that almost everyone work hard, ideally for little pay. I said “almost” because every society has an elite class that doesn’t have to work.
The elite get their goods and services without all that much labor, let alone unpleasant labor. One answer might be to put most people in the elite class, except maybe for a few years when they have to do some work. The problem is that when the elite class gets too big, it brings down society with elite class competition that destroys civil order leading to all sorts of really bad things. A more stable solution might be an elite class that is isolated from actual production, but only able to compete in a limited, safe space.
I think the “traditional attitude” is simply that work is good for us. It is healthy for us to work and unhealthy not to do so (physically, mentally, and spiritually).
This reality has been dragged down to the materialistic level by the modern world and work has been equated with nothing more than earning an income or “getting ahead” in status and/or title. The modern ideas surrounding work are extremely dehumanizing and at the root of much of our society’s dysfunction.
The “Player Piano” plays on. And so it goes.
I personally despise this trend and avoid “self” anything (checkout, etc.) as much as possible. Honestly, no good is coming from it and it is a part of a modern mindset that is prizes efficiency but is dehumanizing.
I should have watched the video first (propaganda is propaganda, but…). I have a slightly higher view of this now but not too much. I did find myself wanting to see the showers, which weren’t shown, and I wonder at how much food gets wasted. It’s difficult to make a fully informed decision without experiencing it first-hand but I better understand what they are trying to do.
Thankfully, everybody hates each other and nobody is having kids anymore. Should go a long way in alleviating the joblessness.
Oh, ZING! That gave me a chuckle. But you are right, I look at those pictures of the hefty female plebes in their yoga pants (there oughta be a law…) and the hefty male plebes in their camo gear and I am reminded that I “hate” the majority of people I see in public spaces. I don’t actually hate them, I just wish my daily interactions could be less depressing. Maybe we can’t all be gorgeous people as in TV-land, but how ’bout we all dress up a bit so as to offer others a slightly less dreary public experience?
Yeah, that made me laugh too, but it’s ironic that this column should appear the same day as the Wall St Journal ran on its front page an article about an increasing demand for workers in the midwest and shortage of people to hire. Companies will always try to find a way to do more with less labor, the very definition of increasing productivity. What’s important is to have an environment where people (shall we call them entrepreneurs) try to figure out new businesses to start that might need some of that labor. You never know what they’ll come up with, but they have a long track record of coming up with something.
There are long articles and many studies claiming that in the industrial heartland of the Midwest (Indiana and Wisconsin lead the nation in “percentage of jobs in manufacturing”) suffers from “skills mismatch”, that employers are not able to find employees with the right skills…as if it’s a “supply side” problem.
The real problem is wages, which at the median haven’t budged here for 20 years, and actually fell during the Great Recession.
It really irks me. The same free-marketers who believe in “creative destruction” and all those other techno-libertarian buzz words fail to grasp that they might just have to pay more to people to get them to take hard jobs, or jobs with significant disadvantages (shift work, weekend work, etc.). If you aren’t getting qualified applicants, you aren’t paying enough. Period.
Exactly what Wharton management professor Peter Cappelli contends in his book ‘Why Good People Can’t Get Jobs’ and related articles. Companies are too picky, don’t pay enough, and won’t train or develop employees. While expecting perfectly experienced workers to just fall into their lap like manna from heaven. So the mythical skills gap is a convenient excuse for companies to avoid examining their own hiring deficiencies.
I studied (and even learned a bit about) management and economics at Wharton, before Cappelli was there. When I graduated…I joined a corporate training program, when such things existed. Most of my classmates did the same, regardless of field. No one expected 22-year-olds to know enough to function well on their first day, so companies invested in even well-educated people.
In those same years, my dad was paid well for running training programs for factory assembly workers, teaching Deming principles LONG before ISO9001.
Then, financial engineers and buyout artists took over the manufacturing capacity of the US. People’s salaries are a cost to them, never an investment.
I have been fortunate enough to work at two companies that did/do hire new grads and get them up to speed. They are engineering companies, and everyone knows that an engineering new grad is reasonably smart and has a pretty good knowledge baseline but may know zilch about whatever engineering discipline they’ll be working in. They are hired for potential.
However, that one shot at joining up is reserved for new grads. An older person would never be accorded the same opportunity unless they were also a new grad. A non-grad coming in must have relevant experience. That is why we have tiger parents – they understand that one shot.
All of these articles have saved me a lot of heeahcads.
I’m curious. In what way?
Unskilled factory wages have stagnated because of the law of supply and demand, not American management practices. Over the last 30 years, we dropped or eliminated import barriers globally (think WTO), which created in essence, a single global market. And, over a billion low-wage but hard-working Chinese and Indian workers entered the global manufacturing workforce, and drove American manufacturers to either automate (expensive and cuts jobs) or outsource (cheap and cuts jobs) to stay competitive and in business. Add in cheap logistics, high domestic business taxes (recently changed) and self defeating tax rules (i.e. lack of fast depreciation), and its a surprise we’re still have as big a manufacturing base as we do.
I recommend reading “Glass House” by Brian Alexander to understand a bit about how American management practices (disinvestment, financial engineering, and wage cuts) have contributed to the present situation.
But you really do not see the same problems in Europe as you do in America.
Unions and legal protections for workers are stronger in Western Europe.
But even there one now reads about complaints of cheaper workers from the eastern EU countries migrating within the bloc.
That is why the claim that automation has eliminated more jobs than globalization is so specious. Offshoring drove way more automation than supposedly high cost domestic labor.
It’s an “and” not an “or.” The short term offshoring process (“short” as in… the last forty or fifty years) has driven down domestic wages and the bargaining power of increasingly disorganized labor. At the same time the cost of labor in places like Japan, Korea, and China has increased significantly as each nation moved up the value chain and got rich. Labor in the Midwest is now at par with China since the new industrial global wage has reset somewhere in the middle. China is automating faster than anywhere else – and offshoring to Wisconsin and Pennsylvania.