Hy-Vee has installed automated checkout kiosks in several of its Missouri stores this year. | Zhihan Huang/Missouri Business Alert

What the spread of supermarket self-checkout might mean for jobs, say about Missouri’s minimum wage



Hy-Vee has installed self-checkout counters at six of its 28 stores in Missouri this year and plans to bring the technology to more locations in the coming months.

The Iowa-based grocery chain introduced automated checkout to Columbia and Springfield stores in mid-July, while others in Kansas City have had the technology since February. A Hy-Vee spokeswoman said she hadn’t heard of any current plans to install the machines at every store, but she couldn’t confirm there were no plans to install the machines everywhere in the future.

Automated checkout at Hy-Vee and other stores is just one example of machines taking over human roles in the economy. But just how much does this shift in supermarkets impact low-wage workers? And does Missouri’s rising minimum wage have anything to do with it?

According to economist Brian Phelan, who has researched labor and automation for the Federal Reserve Bank of Chicago, the answer is yes and no.

“There is a fair amount of evidence that minimum wage hikes do tend to be associated with the expedited automation of low-wage jobs,” Phelan said.

But that doesn’t mean that all is lost for cashiers. In fact, cashier jobs will experience modest growth both in the short term (2018 to 2020) and long term (2016 to 2026), according to the Missouri Department of Economic Development.

Phelan explained that automation of repetitive jobs like that of cashier is generally offset by increased employment in other low-wage jobs.

Many of the jobs people find after being replaced by machines will be associated with interactive tasks and personal communication — things Phelan said machines aren’t good at. For example, Phelan said, Hy-Vee will need people to teach customers how to use the new self-checkout as it cuts down on the number of cashiers.

Christina Gayman, Hy-Vee’s corporate head of public relations, said the chain has no plans to lay off workers as a result of this technology, but that workers could be assigned to new tasks in different capacities.

She did not elaborate on what types of tasks those would be.

“Store directors have the autonomy to decide that,” she said.

Phelan cautioned against taking the offsetting of jobs as doctrine, noting that his analysis was both short-term and historical. At some point, he said, everyone will learn how to use self-checkout machines and teaching attendants will become superfluous.

It’s unclear what will happen at that point. Phelan said low-wage workers will not be the hardest-hit demographic because the wage cuts they’ll face as a result of automation won’t be that steep.

Phelan’s research suggests that it won’t be particularly difficult for a displaced cashier or fast-food worker to find new work in a position that pays the same. Therefore, the short-term job loss won’t necessarily cause a loss in wage.

“Because minimum wage is a wage floor, there’s only so far you can go down,” he said.

It’s a different story for mid-wage laborers such as assembly line workers making $20 or $25 an hour. It may not be as easy for these workers to find jobs paying similar wages, so there’s a higher chance of major wage cuts in the case of job loss, Phelan said.

In November, Missouri voters approved a minimum wage increase of 85 cents per year until 2023, when the $12 per hour wage will be indexed and adjusted according to the Consumer Price Index. Other states like Illinois have approved raising future minimum wages to $15 per hour by 2025. Illinois’ minimum wage remained stagnant at $8.25 for nine years before this year’s law was passed.

Phelan said it’s hard to study the effects of essentially doubling the minimum wage because it’s never been done before. Minimum wages across the country have historically risen by small amounts, so it’s hard for Phelan to predict what will actually happen when cashiers and fast-food workers start making $15 an hour.

Bill Bishop, a longtime researcher and consultant focused on the retail food industry, said although $15 minimum wages “unquestionably” hasten their installation, automated checkout machines are inevitable regardless. He predicts they will be in almost every grocery store within the next decade.

The main reason? They’re convenient, Bishop said, which appeals to consumers.

“All retailers interested in being competitive are going to do that,” he said.

Over the past 20 years, automated checkout machines have grown more effective at decreasing lines and hassle for grocery shoppers, Bishop said. As this continues and the technology gets better, the the market for the machines will grow larger.

He sees supermarket automation happening in three forms.

The first form is the fixed checkout, or what Bishop calls the “base level” of self checkout. The Columbia Hy-Vee’s machines are fixed checkout, where customers manually scan their groceries when they finish shopping.

The second level Bishop sees stores adopting is the “scan-and-go” self-checkout model. In this case, consumers will use either a store-supplied scanning device or an app on their phone to scan their groceries as they place them into their carts. At the end of their shopping trip, they can scan a single code and be finished on the spot instead of needing to wait in a line as all their groceries are scanned.

The third level of self-checkout, initially realized by Amazon, involves grocery store cameras and sensors that detect customer movement. This technology notes what items are added to carts and automatically bills customers when they leave the store.

“You have three types of technologies, all of which are designed to make the shopping experience better,” Bishop said. “That’s not eyewash or rationale. One of the biggest objections (to grocery shopping) is waiting in line.”

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