Raises for Retail Workers Won't Protect Them From Automation

Walmart Inc. inched closer to a $15 minimum wage last month, drawing tepid praise from even some of its strongest critics. The largest US employer joined Macy’s Inc., CVS Health Corp. and Target Corp., all of which have raised starting wages in the pandemic era of labor shortages and soaring inflation. While $15 (or $14 in Walmart’s case) is just enough for a full-time worker with no children to live in the US county with the lowest cost of living, these are moves in the right direction.

Still, a crucial element missing in conversations around minimum wages and the retail industry is automation. Already in motion before the pandemic, automation has kicked into high gear since, with retailers turning to self-checkout, robotic sorting machines and automated customer service to run their businesses at a lower cost. For companies, that’s good news. But for retail workers, it’s complicated.

Short term, fewer low-paid workers will be needed because of cheaper and more efficient robots. And while starting wages may increase for those who remain, fewer hours will be available as companies look to control costs, which won’t necessarily translate into increased income. As the country recovers from the economic devastation of the pandemic, companies and policy makers have a long-term opportunity to invest in reskilling service workers rather than treating them as a cost that needs cutting and forgetting.