Plain and Simple: A Jobs Killer

 When I was a kid the idea of robots replacing manpower (jobs) was raised as a coming attraction. Lest I date myself, the 1964-65 New York World’s Fair showcased beguiling futuristic lifestyle and business conveniences in pavilions, featuring various mechanized fancies including TV phones. At the same time we had the Jetsons’ robot maid and a decade or so later R2D2 from Star Wars, among many other pop culture representations. And remember the fateful 1969 number one hit “In the Year 2525” where life was reduced to merely subsisting on food pills in a virtual steady state of paralysis. Happily for my appetite, we’re far from that irksome Zagar and Evans representation. But for all of technology’s wonderful efficiencies and productivity enhancements, let’s face it—it’s plain and simply become a jobs killer in the U.S of 2012. And as we have noted in this space before—commercial real estate investors are not benefited by resulting dampened tenant demand.

The recent, revealing New York Times articles about Apple’s transfer of manufacturing jobs to take advantage of China’s superior “supply lines” is the latest telling example of discomfiting trends wracking our economy. Apple folks including the late Steve Jobs claim the overseas gambit is not about wage rates, but more about access to skilled workers, which they cannot find here. But in fact it’s all about costs and labor rates. Workers in Chinese supply chains live in army style barracks (no surprise since the Army controls most industry), can be summoned in droves on a moment’s notice, work six to seven day weeks often on 12-hour shifts, and earn fractions of what U.S. workers make. And Mr. Jobs said these jobs won’t return. He’s damn right unless U.S. workers are willing to earn a lot less and work under much less comfortable conditions—in other words see considerable decline in their living standards.

But then look all around you at technology’s various impacts on jobs and in particular on opportunities for young people. Paper routes are disappearing because of the slow demise of newspapers. I was in the supermarket the other day—half of the checkout lines have been converted to self-service—no more cashiers or baggers. A new low cost hotel chain now has self-service check-in in the lobby—a machine spits out your room key when you register with your credit card like at a bank ATM. Of course, in airports, self-check in has taken over. And what will become of book sellers? We lost Borders. Now, the last bricks and mortar survivor, Barnes and Noble, is in the cross hairs. If all our books come through tablet devices, think about all the jobs eliminated along the supply chain from printers to trucker drivers to shelve stockers to cashiers. And lastly, what about the impact on retail and warehouse space—we will just need less of it.

Everybody loves the sales per square foot numbers of Apple Stores, but can they make up for the losses on all these other fronts. No way. Meanwhile, Verizon (now with I-phone devices to sell) eats into T-Mobile and AT&T market shares after their failed merger attempt—watch some of their stores close down.

And you wonder why the unemployment rate stays so stubbornly high—yeah it will all be fixed if we just cut taxes and create more green energy jobs.