While a large number of Americans have refused to go back to work as they are able to take advantage of COVID-19 unemployment benefits, when the handouts end in September many of those might have no job to return to because companies are increasingly replacing humans with machines, a development accelerated by the pandemic.
With the relative easing up of the coronavirus crisis situation and the reopening of the American economy plagued with constant lockdowns for the past 1.5 year, many employers have found themselves hurt by labor shortages.
That has been largely due to the administration of Democrat President Joe Biden whose American Rescue Plan worth $1.9 trillion included extended funding for enhanced unemployment payments of $300 per week.
About 1.8 million workers are estimated to have remained home because of this handout option although employers are increasingly active in seeking new employees.
What is more, some workers have even sued their state’s governors as Republican governors across the country have opted out of the federal enhanced unemployment program in order to stimulate small businesses.
Against this backdrop, however, a notable trend has been taking place: for the past year, many companies have managed to keep up their operations by shifting to greater automation, with the pandemic seemingly accelerating the pace of humans’ replacement by machines.
A recent report in The Wall Street Journal noted that businesses are increasingly learning to achieve more with less.
Thus, even though American workers did 4.3% fewer hours of work in the first quarter of 2021, economic output was only 0.5% smaller than in the last quarter of 2019 (i.e. the last full quarter before the pandemic hit).
Host Hotels & Resorts, a firm in the hospitality sector, has been doing without housekeeping staff because of the labor shortage.
According to its CEO, Jim Risoleo, the company planned to cut down on housekeeping in many of the properties that it manages.
HHR also cut the management staff of its food and beverage operations in 2020 by a whopping 30%, and has made it clear that the change will not be temporary.
Raytheon, which is the largest US aerospace supplier in terms of sales, has announced that it is not going to call back most of the 4,500 contract workers that it let go in 2020.
Its executive VP of operations and supply chain, Paolo Dal Cin, has stated that the pandemic has accelerated the company’s plans for greater automation and more digital technology in its production processes.
Amazon, McDonald’s, Applebee…
Restaurants aren’t far behind in terms of implementing new technological solutions.
One example at hand is Dave & Buster’s Entertainment Inc., a restaurant and entertainment chain.
It now has its customers order food and drink through digital tables, which reduces the number of waiters needed.
Applebee’s has also started using tables but in order to allow customers to pay their bill at their tables without having to call up a waiter.
Applebee’s parent Dine Brands Global Inc. CEO, John Payton, has called the hand-held screens a hedge against labor inflation.
Amazon is among the frontrunners in the replacement of human workers with robots, or machines.
It recently opened a store with “cashier-less checkout technology” in the state of Washington.
Customers just leave the Amazon Fresh store with their products, while its technology tracks their purchases and charges them directly to their Amazon accounts.
McDonald’s hasn’t fallen far behind as it has been piloting voice-automated drive-thrus.