I live in the northwest of the US.  We are now the small business and start up mecca of the US.  Why?  San Francisco and Silicon Valley are too expensive.  So, folks are moving in droves to Portland and Seattle – 1/3 of the license plates in my hood are out of state.

But, there are challenges.   The cost of housing and living in the NW is now approaching San Francisco standards of 4 years ago.  The challenge is that the surplus of new folks (millennials in their late 20’s and early 30’s) moving into town require livable wage work.  So with the influx of folks into the NW, Seattle and Portland are raising the minimum wage to $15/hour.

And this is a problem of many small business owners.

THE CORE PROBLEM

We are now confronted with the law of unintended consequences.  The idea of a livable wage appeals to the politicians want votes and to millennials who need work.  The Washington Post recently had an article: A ‘Very Credible’ New Study on Seattle $15 Minimum Wage has Bad News for Liberals (June 26, 2017).

Politicians want to curry votes.  One of the best ways is to appeal to the mass of voters who are low wage workers.  This is done mainly by politicians who have never run a small business.  And, here lies the unintended consequence.

In today’s small business climate, paying $15/hour for service workers is high when retail margins are very thin.  The additional cost for service workers has to be passed on to customers who may rebel against higher cost goods/services and buy online.  Or, the retail owner must eat it and have lower margins or simply go out of business.

This is conundrum that all small business owners in the US will face as the minimum wage goes up. Either way, the options for the small business owner are bleak.  And, this is hugely critical, since small business is the major growth employer in the US and frankly in most of the world.

SO WHAT DOES THE SMALL BUSINESS OWNER DO?

I was walking to our local park a few days ago and saw the future of retail and may be all work.

I looked into the window of retail space called Kombucha SOMA Taproom.  There were a few customers sitting at various tables.  Looked laid back and friendly.

I also wanted to try Kombucha, which is a fermented black or can be a green tea drink.  I pushed against the front door to go in.  It was stuck.  I pushed harder and still was locked.

But, I sensed something unusual.  So, I spent a few moments looking into through the plate glass window  So, I wondered why could the half dozen folks inside get in.  And I couldn’t.

As well, the customers inside were waving at me.  I waved back.  Then, they pointed to read the description on the door.  This is what I read:

“Swipe your credit card to access SOMA Kombucha Taproom.  This is a self-serve, unstaffed facility.”

What was going on?  Didn’t any coffee shop, Kombucha tasting place, or retail need real people.  Folks to service.  Folks to talk with.  Folks to commiserate with.

In other words, there is no retail worker or server.  This was a totally automated retail shop.  No way…  Robotics and automation had come to my hood.

 I was stunned.  What are the implications for all those retail baristas, service workers, and others?  Could this be the future of work?

I get it from the owner’s point of view.  It’s really hard to make a profit (margin) when you’ve got to pay a $15/hour minimum wage plus benefits.  Automation really looks good, if it’s an either or. High priced labor or no margin and no business.

FUTURE OF WORK

Not good.  So, have I seen the future of work?  If so, I don’t like it.  What’s gonna happen to all the workers?

In San Francisco, they now have a robotic barista.  Driving will be automated in a few years thanks to autonomous vehicles.  Food shopping is being automated with plans for drone delivery.  What’s next?

No human assistance for government services, shopping, coffee, libraries.  It’s gonna all be automated.

But, what happens to all those workers being displaced?  Don’t know.

What I do know is that that future of work is already here.  It’s happening faster.  And, I don’t like it.

Bio:

Greg Hutchins PE and CERM (503.233.101 & GregH@QualityPlusEngineering.com)  is the founder of:

CERMAcademy.com
800Compete.com
QualityPlusEngineering.com
WorkingIt.com

He is the evangelist behind Future of Quality: Risk®.  He is currently working on the Future of Work and machine learning projects.

He is a frequent speaker and expert on Supply Chain Risk Management and cyber security.  His current books available on all platform are shown below: