I just read an article from Reuters [1] that confirmed my earlier fear months ago, while sitting at a Borders bookstore in Town Square: “public places such as this one, will become a distant memory in 25 years.”
I was hard at work on my term paper at the time, sitting at the coffee shop and momentarily pausing to reflect on my next thought, when suddenly my attention was diverted towards the clerk working behind a counter, encouraging patrons who passed by to consider buying an eReader. As an engineer who designs/works with embedded devices (an eReader being a classic example of one) I couldn’t help but listen in on her sales pitch. Convincing as she was and as fully enamored as the customer was by the device she gently held in her hands, I felt something eerily wrong with the situation unfolding in front of me. Here is an employee who is being told by her management to work behind a counter and sell a device that will ultimately lead to the demise of her position. It’s a classic example of how technology evolves the industry in a progressive manner that benefits the consumer and the producer, but ultimately kills the middle-person (the employee).
We’ve seen examples of this: Supermarkets now have self-checkout lines to help expedite the purchase of goods, by removing the cashier who mans a single station. By having one cashier monitor five stations, the bottom-line starts to improve, while the pockets of the newly unemployed bottoms-out. The expectations, that some might argue, is for these newly unemployed individuals to develop a new craft or find ways to improve their life rather than expect a lateral shift into another position within the company. Yet, the assumption is that these people, who are not fully trained or educated for higher level white-collar positions, are somehow welcoming to the barrage of bad news that comes with layoffs , and that they should appreciate the opportunity to possibly find themselves in something “better.” Well, frankly I think that’s nonsense, because a majority of us find a level of content and stick with it. Not all of us are looking to ascend to new heights, and some might find solace in being at one level for the remainder of their working years. It’s called consistency, and as of late, we’ve noticed only one consistent figure from our corporate entities: upward trend in job displacement.
From 2001-2008, 2.4 million jobs were either lost or displaced to China [2] by corporations and the hardest hit sectors were in technology. What’s worse about this figure, is that not only does it lower the ceiling, hence crowding the unemployed white-collar level and increasing competition, but those who lose jobs in positions that don’t require a four-year college degree, that are supposedly “motivated” to move into better paying positions, are finding it hard to wiggle in with those that are currently standing in line. Even worse, competition with low-wage workers from less-developed countries, has also driven wages for other workers in manufacturing and reduced the wages and bargaining power of similar workers throughout the economy [2]. That means, if you’re not willing to improve your status quo and you insist on making the lateral shift without a four-year degree, which is about 70% or a 100 million people, then you’ve witnessed a $1400 downgrade in your pay in just one year alone (2006 according to Bivens 2008 see [2]), but I digress.
The news about Borders, and potentially 150 of their 500 stores closing, bothers me. It’s indicative of poor management practices but it’s also part of a grand scheme to eliminate the overhead that corporations must endure by keeping store fronts open. It’s no longer ideal to have the front end (the store) but rather having the backend(the warehouse). Distribution centers are the heart of online stores, and customers are always a click away from getting the items they most cherish, but remember, sometimes the things we cherish are the ones we often overlook. The front end provides a place for people to meet, socialize, drink coffee, read magazines, stare intently at a guy picking his nose while reading the latest copy of Harry Potter. It’s seeing people work, it’s breathing in the environment and experiencing all the senses we as humans sometimes take for granted.
If technology is to be blamed for the displacement of jobs, then by no means is that technology worth having. Early indications show that Internet usage is preferable as a shopping medium than purchasing something in-store. It’s not a fair assessment to say that eReaders are the ultimate cause of Borders stores closing down and driving the company on the brink of bankruptcy, because the technology is still in it’s infancy. However, all signs point to a sharp incline in eReader use within the next year [3]. That trend is expected to be on an upward climb for North America till at least 2014 as it is a key market [3]. We’ve already seen the effects that e-commerce has had on computer stores such as CompUSA, Circuit City, and mom and pop shops. The point I’m trying to make here, is that the demise of Borders and Barnes and Noble is inevitable and it wouldn’t surprise me if the closure or further minimization of stores is timed. My guess is within 10 years.
-kor
References:
[1] http://news.yahoo.com/s/nm/20110201/ts_nm/us_borders
[2] http://www.epi.org/publications/entry/bp260/
[3] http://www.informationweek.com/news/storage/portable/showArticle.jhtml?articleID=228800014
