
Uniqlo cut 90% of staff at one warehouse by replacing them with robots - prostoalex
https://qz.com/1419418/uniqlo-cut-90-of-staff-at-one-warehouse-by-replacing-them-with-robots/
======
liquidise
Modern societies are going to have a very real problem to grapple with as this
replacement goes from newsworthy to the norm. This could result in significant
worker displacement with massive bottom-line ROI for companies in the next
decade or two, particularly as minimum wages rise.

I'm not of the opinion that this automation will create an equal number of
jobs for the ones they replace. Even if they do, it is unlikely those new
positions will employ the same degree of skilled worker.

Assuming a net unskilled job reduction due to automation in a couple of
decades, what happens as this becomes pervasive in a society?

~~~
nerdponx
The source of the problem is simple. Real societal value is generated through
this activity, but it is reaped entirely by Uniqlo and its stakeholders.

Yes, consumers are also a stakeholder, but your typical consumer will receive
very little or no direct benefit from this change. Eventually, yes, the
profits will be reinvested, but the impact will be so diluted as to be a
noticeable. Some small fraction of it will probably also go to tax evasion,
being expatriated or sequestered by wealthy upper management.

Meanwhile, a whole lot of people are suddenly out of work, imposing
significant negative externalities on them and their families. This could
conceivably ruin a marriage, or turn a good parent into a raging alcoholic. It
may well be that the negative gain to society (in the form of laying off so
many employees) has severe follow-on effects, and in terms of net welfare this
could do more harm than good.

The effects of leaving the workers out of the profit-sharing is more than just
a matter of equity. Without redistribution of the welfare created by
automation, it's perfectly conceivable that the net welfare gain is negative
due to the negative second-order effects outweighing the positive second-order
effects.

This is the stuff they don't teach you in Econ 101, but it's how things really
work.

~~~
ColanR
The other thing they don't teach you in Econ 101 is that treating corporations
as obligated to keep and preserve jobs prevents them from creating societal
value, and treating workers as entitled to a job disincentivises the invention
of new methods of creating societal value. It causes stagnation of the
economy.

~~~
knieveltech
And what is Econ 201's solution to pervasive unemployment, or lack of spending
power due to underemployment? Is that also classified as "societal value"?

~~~
stale2002
I'm not sure if you have noticed, but unemployment is at a multi decade low.

We are not seeing pervasive unemployment, we are seeing the opposite. A
situation where there are too many jobs, and not enough workers to fill them

So econ 201 would say that there isn't any societial problem right now.

~~~
eli_gottlieb
Then why are wages so stagnant?

~~~
prostoalex
Because wages are a small part of the total compensation package - leaving out
bonuses, health, dental, vision insurance policies, 401k (with matching),
employee stock purchase plans, stock options or stock units awards, access to
food and on-site services, company cars, etc.

They’re also not stagnant [https://tradingeconomics.com/united-states/wage-
growth](https://tradingeconomics.com/united-states/wage-growth)

~~~
zaccus
If my employer's group health insurance is considered part of my compensation,
should I not be glad that health care costs are rising, since that drives up
my total compensation?

------
dvcrn
I love uniqlo doubling down on tech.

One thing I found really interesting is that inside the labels are small rfid
(I think?) chips. At the cashier, the person just folds them nicely, puts the
pile of cloth on a metal pad and the system tells you how many items and how
much it is. No manual code scanning!! The first time I noticed that I felt
like a kid again discovering something magical.

The next step was to have person-less cashiers with the same system which
works great too. So a completely autonomous store was just the next logical
way to go.

~~~
bostonvaulter2
Do those tags stay on the clothes afterward? Or are those external to the
clothes?

~~~
dvcrn
The staff told me it’s inside the price label so I’m guessing it stays on

------
imagiko
I have wondered at what point will job cuts start affecting the overall supply
demand equation as more and more people get out of work and will have less
spending capacity. Who will buy more 'stuff' and how? We don't know at what
rate the jobs will be replaced, if at all. What will be the equilibrium point
then?

~~~
GoToRO
If everything will be automated then "time with a human" will be really
expensive. Why work 8h/day when you can buy everything with very little money
(automation)? You will work 1h/day and ask a full salary for it.

The only problem are changes that come too fast and people have no time to
adapt. Exactly what startups try to do, to disrupt stuff.

------
kpil
Well, Parkinsons law seems to be intact so we will all work in middle
management in a few decades, all responsible for requesting service level
agreements from each others legal department AIs.

------
excalibur
How about instead of selling robots to companies to replace their laborers, we
sell robots to the workers to do their jobs. You keep getting paid as long as
you keep your robot running.

~~~
cbowal
Are the workers putting up the capital to purchase the robots?

~~~
excalibur
There would probably need to be rental services/financing options for those
who can't afford to buy one outright.

~~~
jrowley
Uber and others offer leases to drivers now. I'm sure the same could apply.

------
apercu
I worked in a warehouse for a summer in school because the hours fit around my
other job and the pay was little higher than some other options (retail). But
the Teamsters union ran the show and it was so political that I went back to
the food/beverage service business.

All that said, it's too bad that warehouse work isn't going to be an option
for many people. There are fewer and fewer jobs for a lot of people.

Note: I support Unions and wish we had more. That union, however....

~~~
briandear
> That union, however....

Exactly. All unions become "that union" when given enough power and influence.

~~~
lexs
That's a gross generalisation and I would strongly disagree, this boogeyman of
the evil union gets trotted out every time in tech forums like hackernews.

------
nopinsight
There will be a great deal more demand in the healthcare sector all over the
developed world in the coming decades. Japan is leading the way with the
oldest demographics among large economies. Its demographics leads Western
Europe by a decade or so and perhaps a couple more for the US.

We should start training people for jobs like homecare assistance, nursing
home care, etc and developing institutions and solutions for funding them. An
apprenticeship program complemented by some classes might work better than
college for these jobs.

The jobs do require some skills but they are skills most people can acquire
with good training. The latent demand is enormous and the work is potentially
more fulfilling than moving stuff around a warehouse.

~~~
new_guy
By the time they're trained up the robots will have taken their jobs too.

[https://www.theguardian.com/world/2018/feb/06/japan-
robots-w...](https://www.theguardian.com/world/2018/feb/06/japan-robots-will-
care-for-80-of-elderly-by-2020)
[https://www.dailymail.co.uk/health/article-5014079/15-000-ro...](https://www.dailymail.co.uk/health/article-5014079/15-000-robot-
look-elderly-Southend-care-home.html)

I love technology, but honestly I find this terrifying. People aren't just
going to be unemployed, they're going to be unemployable.

This how workers must have felt during the first industrial revolution, I'd
say we're in the second one now.

~~~
nopinsight
Home assistance and nursing assistant jobs require competence in a large
number of highly varied tasks and many require human-style intelligence which
is among the hardest to automate from our experience with AI research. (See
Moravec’s Paradox.)

It will be at least a couple decades, likely longer, until we can really
automate those jobs _cost effectively_ , which gives us time to reconfigure
socio-economic systems to suit the burgeoning new industrial revolution.

Check out the following predictions by a noted roboticist and former director
of MIT’s CSAIL

[https://rodneybrooks.com/my-dated-predictions/](https://rodneybrooks.com/my-
dated-predictions/)

Example from the page:

Dexterous robot hands generally available. NET (Not Earlier Than) 2030

It will take at least a decade and often longer for a hardware product to
become affordable to the masses. So we are talking about 2040 or later when
most of home caring jobs will be at risk.

Even then, the need for human interaction will still be there so it is unclear
if most elderly would not want human services if it is accessible to them.

------
somberi
Surfacing it from the POV of retailer's reality. Uniqlo's net profits(2) at ~
20% are higher than what is mentioned below for American Retailers (2)

From: [https://www.newyorker.com/magazine/2013/08/12/the-pay-is-
too...](https://www.newyorker.com/magazine/2013/08/12/the-pay-is-too-damn-low)

In 1960, the country’s biggest employer, General Motors, was also its most
profitable company and one of its best-paying. It had high profit margins and
real pricing power, even as it was paying its workers union wages. And it was
not alone: firms like Ford, Standard Oil, and Bethlehem Steel employed huge
numbers of well-paid workers while earning big profits. Today, the country’s
biggest employers are retailers and fast-food chains, almost all of which have
built their businesses on low pay—they’ve striven to keep wages down and
unions out—and low prices.

This complicates things, in part because of the nature of these businesses.
They make plenty of money, but most have slim profit margins: Walmart and
Target earn between three and four cents on the dollar;

(2)
[https://www.japantimes.co.jp/news/2018/07/12/business/corpor...](https://www.japantimes.co.jp/news/2018/07/12/business/corporate-
business/fast-retailing-net-profit-23-5-brisk-uniqlo-sales-u-s-china-trade-
spat-impacts-limited-cfo/)

------
zawerf
I've heard the argument that this situation is unique to japan due to their
aging population and low birthrate.

They don't have cheap teenagers to exploit at minimum wages which is why
automation is even financially worth it. The amount they are spending ($887
million) can hire 60,000 years of labor at $15,000/yr.

~~~
mschuster91
The point is, it's introduced there because it's profitable even if the robots
suck but are more productive as a human. The experiences gained, though, will
lead to the robots becoming cheaper and cheaper until the robots are on par
with Western wages, and then hell will break loose.

Japanese society right now is paying the R&D and the western countries,
especially the US, will suck up all the profits.

The one question that remains, though: who will buy all the products when
large swaths of the population don't have a job to feed themselves?

------
acd
The Question is if Robots should pay income tax? Robots replaced humans that
paid tax. The society still needs income.

Tax wise do you replace the replaced workers with zero tax robots or do you
tax robot workers?

When a company do not pay tax or pay lower tax they do not pay for schools and
roads. That is not cool. We still need roads and schools to build a future
society.

Ie the bigger question is that of income distribution. Do you give all the
money gained from the robots to the very few percentage who owns the store?
What if a majority of worlds work are automated by robots.

How do you tax for the global warming that the store new low cost labor
produces? In other words as products starts to almost cost zero to consume but
we are having global warming. How do we price so that we do not over consume
cheap meaningless stuff?

~~~
why_only_15
The money saved gets taxed twice: as corporate income and then when
distributed to shareholders again as individual income. It likely gets taxed
at a higher rate, actually, because the income tax rate of the workers this
replaces is probably very low but the rate of the company + the individual
could easily be 60%.

~~~
lexs
Could you break down how you get to "easily" 60%?

~~~
why_only_15
If the money is passed back in dividends instead of share buybacks, it's taxed
as income. The people who are receiving this income are probably quite
wealthy. Let's lowball it and say that they were making $200,000 per year
before receiving the dividends. I live in Louisiana, so I'll use a Louisiana
income tax calculator [0]. At $200,000 per year, the marginal tax rate is
39.4%. The whole income is not taxed at this level, but any income you earn
past $200,000 (e.g. dividends) is.

Uniqlo is a Japanese retailer, so they would be paying Japanese corporate tax
rates. I can't pretend to be an expert in Japanese corporate tax, so my
estimate of their marginal tax rate is just going to be their profit divided
by their tax paid for the latest financial year I can find. We can find these
data from their 2017 financial statements [1]. In 2017 they paid $584,025,000
in income taxes out of a total of $1,751,484,000 income before taxes. This
gives us almost exactly a 1/3 marginal rate (33.345%).

Combining the personal and corporate tax rates gives us 1 - (2/3 * (1-.394)) =
59.6% tax rate. I may have underestimated the easily part, but in most states
income tax would be slightly higher than in Louisiana, which would push us
over the 60% threshold.

For comparison, an average worker in a warehouse might be making $30,000 per
year. At that income, the total tax burden is $5,578 = 18.59%.

[0]: [https://smartasset.com/taxes/louisiana-paycheck-
calculator](https://smartasset.com/taxes/louisiana-paycheck-calculator) [1]:
[https://www.fastretailing.com/eng/ir/library/pdf/ar2017_en_1...](https://www.fastretailing.com/eng/ir/library/pdf/ar2017_en_17.pdf)

~~~
lexs
That's a very close eyeball to 60% actually! I was more surprised that it
would be taxed as normal income not at the lower capital gains tax (in your
example 15% instead of 39.4%), you seem more knowledgable though.

~~~
why_only_15
It turns out that you are right most of the time on the dividends and as it
turns out I was wrong. The distinction seems to be that if you hold the stock
for a long time, then dividends count as capital gains. If you hold it for a
short time, it's taxed as income [0].

[0]: [https://smartasset.com/taxes/dividend-tax-
rate](https://smartasset.com/taxes/dividend-tax-rate)

------
throw2016
Technology is not stoppable and if jobs are going to be lost they will be.
Ultimately all tech has been absorbed into society.

But many also cynically use 'threats' of technology to scaremonger and try to
keep wages low. This is incredibly exploitative. For instance this story
itself is thin on details and talks up 90% without mentioning the actual
numbers or details of the automation. Amazon bought Kiva and while the robots
are used they continue to hire aggressively.

If McDonalds or anyone else can use robots efficiently today they will. No
company is employing workers out of goodwill but because they need them. If
one must worry current trends show the environment may create far more
disruption than automation.

------
woodpanel
Actually sad since manual laborers are wonderful robots. It's just that they
get pricier ever since.

Things that make them less advantageous to robots are (e.g):

\- the used up demographic dividend of China (with no real replacement in
sight)

\- western population decline

\- western population aging

\- west's much better off population, uninterested in manual labor (at least
as mid/long term job)

\- rising minimum wages

\- rising costs of employment

\- tightening immigration laws

etc.

------
lsy
This article needs a lot more detail before it can even _begin_ to be used as
an indicator of impending rapid mass technological unemployment.

The huge, mostly mechanical system pictured in the Japan News article doesn't
visually differ much from AS/RS systems that have been developing for fifty
years. And according to the linked Reuters article, Uniqlo doesn't appear to
be benefiting from AI or breakthrough tech, but is merely attempting to deploy
automated warehouses, a relatively old technology, globally.

Barring new details, this article doesn't describe the beginning of an
avalanche of robot workers, but an established $XXm custom build process
entered into by the latest company with sufficient scale, margins, capital,
etc to make it worth the investment.

------
kmlx
Japan has always embraced automation, is a staple in robotics and overall
could prove to be a good model to have instead of the constant fear mongering
about automation in the west. It’s not like this sort of change hasn’t happend
before; it’s just that now we have the internet which amplifies our fears (and
there’s also lots more of us on the planet).

~~~
cloudbubble
I remember I read an article about how in Japan, they see robots as their
friend, as something innate with spirit because in Shinto everything has a
spirit, so they embrace them much more easily. Whereas we in the west see
robots as our enemy, something to compete against.

~~~
mschuster91
Japanese companies generally have a better employee relationship. Granted,
some parts of it are exploitative, but at least workers are treated like
family and not like exchangeable cogs like in Western cutthroat capitalism.
There's respect and decency shown, whereas in the US it is common and legal to
be fired on the spot, in some states even for no reason.

------
bamboozled
It would be good to see some actual figures here, how many staff were
replaced? It says it’s a new warehouse, so why would there have been staff in
the first place ? The trouble with percentages is they can easily be
misinterpreted.

Having spent my fair share of time in Japan, I’d bet there are still plenty of
people working st that warehouse and around the clock.

------
pg_bot
I will remind the doomsayers in this thread that someone _getting_ a job is
not mainstream news.

You should not treat humans as machines that are only capable of performing a
single task. We are not left to the dustbin of history if replaced by
machinery.

Humankind's desires and creativity seems to be limitless which gives me
optimism when thinking about the future.

------
m3kw9
For those who are making a big deal out of this here, please disregard any
factories that use machines.

Just because the machines were there first doesn’t make it different, they
could have hired workers in place of the machines.

------
jumelles
This will likely be the new norm as the technology gets cheaper and cheaper.

------
harlanji
Any word about their severance packages? That’s what determines if I keep
shopping there. Salary for a reasonable job search period and I can’t hold it
against them.

------
zeuslawyer
How are people going to pay for things if they're not earning income? Who are
the customers going to be if not employees of organisations?

------
taneq
It's OK, the staff will just find new jobs as electronics engineers and
machine learning researchers. /s

~~~
ry_ry
Strictly playing devil's advocate, but is the lifelong employment of their
staff uniqlo's problem?

If you found a cheaper supplier of milk, would you feel obligated to reimburse
your milk man? (may be a misplaced cultural reference, but in the UK 20+ years
ago a chap delivering you milk to your door every morning on a rolling
contract basis was the norm - generally they do other stuff now)

~~~
natchiketa
When I read a story like this, I'm not faulting a Uniqlo for choosing
progress. It's logical and extremely profitable. I think the alarm is
precisely because of how much sense it makes.

Enough incremental progress has been made for us to arrive at this threshold,
after which a company like Uniqlo can lay off 90% of their workforce by
investing an amount which is, if I'm not mistaken[0], considerably less than
what they profit in one year.

That's not incremental. It's unprecedented.

[0]
[https://www.fastretailing.com/eng/ir/financial/summary.html](https://www.fastretailing.com/eng/ir/financial/summary.html)

~~~
ry_ry
Absolutely, if I were in a position where my job were easily automated I would
be terrified.

I suspect the majority of HN readers are in a less precarious position, so we
have the privilege of a little detachment in our horror at the prospect of
huge swathes of automation.

What to do though? There is very little we can do to stymie the inevitable
unemplocalyspe without ripping up society's rulebook altogether.

I fear unionization may have been the answer 30+ years ago but that particular
horse has well and truly bolted. Universal basic income failed in Finland as
far as I can remember (I could be wrong on all counts there, it's still
early!), and let's be honest - any government legislation would just lead to a
global race-to-the-bottom as nations prostitute their labour laws to attract
companies priced out of traditional locations by taxation and fines. Trade
tariffs would only drive companies to diversify into new markets and if
consumer demand was there, a thriving grey market would emerge...

Perhaps 'hand packed' will just join 'organic' 'sustainable' and 'free range'
as desirable things to have on your packaging? Check out these hand-picked
shoes!

Uniqlo are an interesting example, they compete primarily on price anyway
(Heck, I'm wearing a pair of their cheapo selvage jeans) so they will
absolutely push this as far as they can.

Well worth keeping an eye on them over the next couple of years to see how it
plays out - will likely form the template.

------
cwkoss
Seems like folding the clothes and placing them onto displays might be the
hardest task to automate.

------
flerchin
Automation has never been more prevalent, and total employment has never been
higher.

------
DrNuke
You do not need to be a socialist to understand there is something inherently
going badly wrong for the masses here.

~~~
endtime
Wouldn't a socialist be happy that the laborers are no longer being exploited?

~~~
DrNuke
The masses still need to eat or are we just letting them starve?

~~~
endtime
Socialists generally tend to favor starvation, I believe.

~~~
mschuster91
I'm a socialist and yet I believe that neither Stalin's Gulags nor Mao's mass
hunger deaths are something that should be repeated. Authoritarian socialism
has been proven to not work, what the world desperately needs is
liberal/libertarian socialism.

We can learn from history - ok, those who openly fly the Nazi flag not, but
majority of society can see the problems like homelessness, drug epidemics and
exploding rents.

~~~
refurb
Libertarian socialism? So a minimal govt that owns all the means of
production?

My head just exploded.

~~~
fucking_tragedy
The word libertarianism originally referred to a socialist school of
thought[0].

> _Traditionally, libertarianism was a term for a form of left-wing politics;
> such left-libertarian ideologies seek to abolish capitalism and private
> ownership of the means of production, or else to restrict their purview or
> effects, in favor of common or cooperative ownership and management, viewing
> private property as a barrier to freedom and liberty. In the United States,
> modern right-libertarian ideologies, such as minarchism and anarcho-
> capitalism, co-opted the term in the mid-20th century to instead advocate
> laissez-faire capitalism and strong private property rights, such as in
> land, infrastructure, and natural resources._

[0]
[https://en.wikipedia.org/wiki/Libertarianism](https://en.wikipedia.org/wiki/Libertarianism)

------
cloudbubble
It's not just cutting out jobs that it is a problem, it's also the over-supply
of clothing and 'fast-fashion' which is creating extra garbage. Auto-mating
these things and making it cheaper and easier to move clothes around is only
beneficial to those at the top of the capitalism chain - it's not particularly
great for the planet.

~~~
hikarudo
The people buying those clothes are doing so because they see value out of
doing it, so it's beneficial so them as well.

Your point about externalities is still valid, though.

