It’s not news that robots will replace large numbers of human workers over the next few years. For context, a 2016 WEF study found that 5 million jobs in 15 countries could go by 2020.
But, Bill Gates recently made headlines by calling for a tax on companies’ use of these new automated workers. His thought-provoking argument:
The shift to automation will leave many out of work and without meaningful re-employment prospects. For example, U.S. retail jobs are identified as one of the most at-risk for robot replacement. This pending disruption is evident in the customer-service robots popping up around the country. For example, Lowe’s LoweBot, Macy’s On-Call assistant, Pepper’s debut in California malls, and of course Amazon's cashier-free grocery store.
The reduction of paid labor will shrink the income and social security tax bases and limit governments' abilities to help those affected – at a time when they need a social safety net the most.
Gates maintains that we should take steps to plan for this automated future by instituting a tax on robot workers. Companies could fund the tax with some of the windfall from their labor reduction. Governments could use the proceeds to support displaced workers and retrain them for positions where human skills are still needed. Gates' examples include healthcare and education, but I also see opportunities for retailers to launch retraining efforts.
The robot tax is not a completely novel suggestion. Last month, European parliament considered and rejected a similar proposal, a decision hailed by the robotics industry.
It's no surprise that some economists and policy makers opposed the idea. The challenges are complex, but the main points are these: 1) slowing tech growth to keep humans in jobs delays the inevitable and will have unintended consequences, 2) automation created jobs throughout history and may do so again, and 3) automation is not happening fast enough, limited by an abundance of cheap human labor.
Net/net, critics argue that while the effect of widespread automation will be negative for some people, the economy will be better off as a result.
With compelling arguments on both sides, how to make sense of this issue?
In my view, Gates’ position is about highlighting the vast inequality created by tech innovation.
Today, the gap between rich and poor is at record levels in most of the developed world, and the U.S. leads the pack. In this country, the richest 10% of workers earn 16.5 times that of the poorest 10%. This ratio has more than doubled (up from 7 times) since 1980.
The impending automation revolution will further deepen the divide between rich and poor. Fortune magazine stated this well:
"Some people will see their jobs become obsolete and will need to acquire new skills in order to obtain well-paying work. Robots and artificial intelligence will exacerbate economic inequality and place a burden on many workers to learn new skills."
It is on behalf of the "some people" that Bill Gates speaks. He argues, I believe correctly, that it is the duty of business and government to plan for the displacement of millions of American workers – even if the net economic effect will be positive.
By extension, I believe it is the duty of business leaders to understand and improve the wide economic inequalities that exist today and will deepen in the years ahead.
Retail leaders, in particular, can be a part of the solution by imagining the future of the automated workforce.
We should explore how human workers might work alongside robot “colleagues” to deliver enhanced customer experiences.
We can identify opportunities to retrain displaced workers for these new roles, perhaps building on programs like Amazon's Career Choice.
And, before we get completely wrapped up in automation, we should identify points of human interaction worth preserving and consider how these might create new opportunities for differentiation or revenue. This might be akin to the way some consumers pay a premium today for artisanal food. (One scholar intriguingly posits that someday the act of getting a manicure from a human might be a service for only the very rich!)
The arrival of the automated workforce is a business issue, since inequality creates social, economic and political tension that does not foster a healthy environment for commerce.
But it is a human issue as well. As tech concentrates wealth, knowledge and power in the hands of a few, it is critical to think about broadening it's positive impact in the lives of the many.