business news in context, analysis with attitude

Yesterday we took note of a Bloomberg report that Walmart “is rolling out 360 autonomous floor-scrubbing robots in some of its stores in the U.S. by the end of the January, it said in a joint statement with Brain Corp., which makes the machines. The autonomous janitors can clean floors on their own even when customers are around.” The story noted that the robots, “which look like a cross between a miniature Zamboni and a motorized wheel chair, already scrub floors at airports in Seattle, San Diego, Boston and Miami.”

Unsurprisingly, labor forces criticized the move.

My comment:

I’m sympathetic to the labor argument, except that it is almost a certainty that Walmart is having trouble hiring enough workers … because almost everybody is having trouble hiring enough workers.

Of course, at some point there were will be an economic downturn. Workers will be plentiful. It’ll be a buyers’ market once again. And those same robots will be scrubbing the floors.

MNB reader Howard Schneider wrote:

It’s amazing how an anti-immigrant policy/atmosphere, plus a roaring economy = a tight labor market. When it’s hard to find workers, companies will increasingly find non-human ways to fill their labor needs. Keeping folks out “to protect American jobs” will ultimately reduce the number of available jobs permanently – especially for those without higher or technical education.

From another reader:

File this one under- jobs Americans don’t want to do. Many overnight floor crews, especially outsourced, are made up of foreign labor. Similar to slaughter houses or picking in the fields, Americans will not do these jobs because of pay, the hard work required, conditions, or perceived status. Wait until autonomous trucks hit the road, the outrage will be immense. The future is here.

And from another:

Add this to McDonald’s near automated ordering process. Both are responses to the minimum wage movement. As the minimum wage goes up, the cost of substituting capital for labor goes down. It simply doesn’t make sense to pay someone $15 per hour for a job that is only worth $10 an hour. So, bring in the robots!

MNB reported yesterday that a a federal court has scheduled a hearing for later this month at which CVS will have to justify its already-completed $68 billion acquisition of Aetna … and if they can’t, he could order them to keep their operations separate.

I commented:

Hard to imagine that it makes sense to combine operations if the government can then make you unravel them … but I’m not an M&A expert. I’m just a simple country writer.

I do have to wonder if in this case, as in others, the government is applying old-world competition metrics to a new-world deal. That would be a mistake, though a common one.

Prompting MNB reader Rich Heiland to write:

Totally agree with you that it is highly likely that regulatory agencies are well behind the retail and service curve ala CVS-Aetna.

However, wouldn’t it be interesting to see a new system like Medicare for all, or some such, then let retail, service, etc respond to that new world? I have faith in savvy providers to work in any system - they do in Australia for example.

I know anti-big government folks will howl, but personally I think a major overhaul of our system, beyond the ACA, is inevitable. At some point our current system will collapse under the economic burden it places on the general population.

KC's View: