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Robots Displacing Clerks

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In economic theory, labor combines with capital to produce goods. In normal language, that means people work with machines to make stuff.

Labor and capital (people and machines) can be subsituted for each other. If the backhoe breaks, we can dig holes by hand. Or, if hiring workers becomes too costly, someone will develop machinery to do the job:

Automation — long a force in agriculture and manufacturing — is accelerating in the retail sector, a trend that could hamper efforts to bring down the nation's stubbornly high jobless rate.

In an industry that employs nearly 1 in 10 Americans and has long been a reliable job generator, companies increasingly are looking to peddle more products with fewer employees. Shipping and warehousing workers are being replaced by robots that can process packages more efficiently than humans. Virtual assistants are taking the place of customer service representatives. Kiosks and self-service machines are reducing the need for checkout clerks.

Machines are not perfect subsitutes for people. It’s hard to program a robot to react to all the unexpected situations to which a human worker can easily respond. But also, a robot does not call in sick, plot to steal, or go on strike.

Minimum-wage laws make labor more costly. Making change on the purchase of a pack of gum is not skilled labor, and is simply not worth very much. When the market for gum sellers is distorted by law and politics, gum sellers wind up unemployed. Even if the politicians had the best intentions to give low-skilled workers a better life.

The market cannot be fooled by good intentions. And buying from a live human clerk will increasingly become a luxury. Even for luxury goods:

Meanwhile, business is looking up at AVT, the Corona vending machine maker. The company posted revenue of $4.2 million through the first nine months of 2010, up 71% from the same period a year earlier. It also squeezed out net income of $50,000 after losing nearly $250,000 in the first nine months of 2009.

Some of the company's kiosks look more like automated retail stores than traditional vending machines. What they sell is different too. Merchandise includes high-end electronics and cosmetics, available 24 hours a day in locations such as airports and hotels. The displays cost a fraction of brick-and-mortar stores. They also reflect changing consumer buying habits. Online shopping has made Americans comfortable with the idea of buying all manner of products without the help of a salesman or clerk; ATMs and electronic ticketing have reinforced the desire for instant gratification.

"We want things when we want them, how we want them, and we want them now," AVT's Arcement said.