Corporate Hopes of Higher Worker Productivity Accompany Increased Wages

Traditionally lower-wage jobs across the U.S. have experienced a marked jump in hourly rates this year—retail workers hourly pay “rose 4.3 percent in November from a year earlier”—according to an article in The Boston Globe. In a sales-focused, direct-to-consumer world, however, companies know that customers won’t passively accept price increases and will seek out competitors. For companies looking to preserve their profit margin, then, the answer is two-fold: increased technology and higher productivity from employees.

“[U]nless companies are willing to eat all or part of their higher labor costs, they need to increase their workers’ efficiency. A company’s wage increase of 10 percent can be offset if its employees produce 10 percent more,” the article said.

“Walmart employees can now use mobile devices to check whether an item is in stock and avoid trekking to distant storerooms,” according to the article, with the phones also sending alerts for restocking and price changes. “And in a cluster of stores, Walmart has deployed robots that monitor stockpiles and can send photos of empty shelves to employees’ phones,” the article said. This process reduces the number of workers needed to unload shipments, according to the article.

According to the article, Target has introduced “specialized assembly lines” that minimize worker movement needed to package goods, and similarly, Mooyah Burgers has introduced a pivot system so that line cooks “do everything without steps,’’ said Michael Mabry, Mooyah’s chief operating officer.

Read the full article here.