US dealers hope higher wages will buy more efficient workers

FILE – In this November 16, 2018 file file, employees show how air cushions work at a packaging station in the back room of a Target Store in Edison, NJ. For many retailers who have raised salaries to attract and retain workers, another challenge has arisen: Making employees productive enough to justify the bigger payouts. (AP Photo / Julio Cortez, File)

WASHINGTON – US dealers, struggling to fill jobs, have increased their wages to try to keep and attract enough employees. Now, some stores want something in return: A more efficient worker.

To this end, retailers, fast food restaurants and other lower wage earners are increasing investments in technology and rebuilding stores. Walmart automates truck loading to require fewer workers to load docks. Kohls uses several handheld devices to increase the speed of outlets and storage shelves. McDonald's is increasingly replacing cashiers with self-service kiosks to free up workers for table service.

Retailers, but relatively low paid, have had some of the best wage gains in the past year. Their hourly wage rose 4.3 per cent in November from the year before – much faster than such higher wage industries as production, where wages rose 1.8 per cent.

Walmart increased the starting fee to $ 11 an hour this year. The goal's minimum is $ 12, with plans to make it $ 15 by 2020. The Amazon's starting salary jumped to $ 15 in November. And more than 20 states have increased the minimum wage over federal $ 7.25 an hour.

Even as they have absorbed higher labor costs, most dealers remain reluctant to transfer them to customers in the form of price increases. US consumers have grown more and more at bargain prices – in part a Great Recession hangover, partly a function of online price comparison tools.

So unless the companies are willing to eat all or part of their higher payroll costs, the efficiency of the workers must increase. A company's 10 per cent wage increase can be compensated if its employees produce 10 per cent more.

"We need … meaningful improvements" in productivity, says Greg Foran, CEO of Walmart's US Division. "Pricing generally doesn't go up. It's going to come down as the competition intensifies."

Walmart employees can now use mobile devices to check if an item is in stock and avoid trekking to remote storage rooms. The phones also send alerts when an object needs a price change and leads workers to these items.

And in a cluster of stores, Walmart has distributed robots that monitor stores and can send pictures of empty shelves for phone calls. The information is sent to a transport system that scans boxes that are unloaded from trucks. The workers then organize the boxes for delivery to the sales floor. The system has slashed the number of people needed to load trucks.

Jaana Remes, an economist at McKinsey Global Institute, noted that after the big recession, wages stagnated reduced the incentive for employers to invest in labor-saving technology. Now it begins to reverse.

Remes pointed out that labor-saving technology is more common in countries where payment is higher.

"When did you see grocery stores in Europe?" Remes said. "We still have them in the United States."

But maybe not too long. For this year's holiday season, some goalkeepers started using mobile devices to check out shoppers. Under pressure from online stores, Target, also invests in technology to change its stores to shipping hubs to reduce costs and speed deliveries.

And Kohl sets up the use of mobile technology to help employees store shelves more efficiently and equip something with iPad devices for faster check-out.

It is unclear whether dealers' efforts will be enough to increase overall productivity of the US workforce, which has become widespread in anemic growth since the great recession. Productivity – production per hour worked – is crucial for increasing living standards. An economy can only expand as quickly as the population of the working age and the growth of employee productivity.

Although productivity in the US has increased slightly this year, it grew only 1.3 percent in the July-September quarter of the year before. It is only about half the pace of the 1990s and early 2000s.

Mooyah, a hamburger chain of 80 restaurants mainly in the South, responds to higher salaries by reconfiguring their new restaurants so chefs can act as basketball players – turning to one foot when needed, but most remain in place. During peak hours, this system is meant to enable five employees to do work that now requires up to nine. (Mooyah is owned by the private equity firm Balmoral Funds.)

"They need to do everything without steps," said Michael Mabry, Mooyah's chief executive.

All this affects most workers is not quite clear.

Eric Hoffman, who worked at Walmart distribution centers for 13 years, is far too familiar with a darker side of companies looking to increase productivity. Hoffman, 33, used to enjoy his job on a freight bridge to Walmart, most recently in Winter Haven, Florida.

But over the past year, he said leaders increased quotas and shortened time available to perform tasks. And there was also an increased pressure: The management told Hoffman that they had to "hit Amazon."

"You won't be like Kmart," his bosses said.

Hoffman completed the job five months ago to take an apprentice to an electric company, installing equipment that pays about $ 10.50 per hour.

In response, Walmart has said that there has been testing of ways to increase production in the face of increasing competition, online demand and higher labor costs.

"We're focused on making our business more efficient and efficient, while innovating to make work easier and more engaging for our employees," said Michelle Malashock, a spokeswoman, who refused to address Hoffman's specific complaints.

Transitions to New Technology and Business Processes, noted Remes, can be difficult and disruptive to employees.

"The good news is that technologically-enabled productivity gains help make workers' time more valuable and can lead to wage gains," she said. "They also encourage companies to invest in labor skills and open up better opportunities in the future."

___

D & # 39; Innocenzio reported from New York.