“Take This Job and Shove It”
This is a country music song written by David Allan Coe and popularized by Johnny Paycheck. Perhaps you should be careful what you ask for.
Between the increasing use of automation and rising minimum wages, the potential for reduced employment opportunities may make it increasingly important to hang on to the job you have.
There has been an increase in speculation that computers and robots may be able to perform a number of jobs, particularly in the areas of manual labor, delivery and vehicle operation. Think self service, drones and autonomous vehicles.
We have already seen an increase in a broad range of self service trends such as ATMs instead of tellers, self checkout lanes at major retailers, electronic ordering at restaurants and automated boarding passes and luggage check at airports. These are all instances of business substituting technology for people in an effort to increase efficiency and control costs.
At present, most parcel delivery continues to involve a person and a vehicle. However, major deliverers of packages are actively pursuing alternatives.
Personal transportation is evolving with the rise of ride and vehicle sharing and, in the future, perhaps autonomous vehicles.
Investors should continue to assess who might benefit and who might see margin erosion. It should also be noted that as labor becomes more expensive and companies increasingly substitute technology, some workers may have more disposable income, but others may become unemployed, reducing purchasing power and increasing demands for more government support.
All comments and suggestions are welcome.
Walter Kirchberger, CFA®