Talk about the unintended law of consequences.
Activist investing is becoming very popular. Many are discussing the idea of companies looking to benefit all stakeholders instead of just profits for shareholders.
This all sounds good in theory yet could be turning out much different in practice.
As activists concentrate on workers' rights, we see the old model clashing with the new. This is something that is bringing about changes in ways not thought of.
It is an undeniable fact that we live in a corporatocracy. Corporations are what run things, providing Wall Street with enormous power.
COVID-19 brought an issue such as worker safety to the forefront. Many are starting to question company's practices regarding the safety of the workers. To offset this, many are starting to implement measures to ensure that employees are safe.
The challenge with this is that all this costs money. For the time being, companies are willing to spend it since, not to do so, would be a PR nightmare.
We could see this being a short-lived solution.
Automation is upon us. People are going to quickly realize that companies have an ideal solution to worker safety: get rid of workers. It is a process that will likely accelerate over the next 12 months.
The Gap is an example of a company that accelerated its implementation of robots in its warehouse. These robots can assemble orders, effectively replacing 4 people. What was billed as "working in conjunction" with humans will rapidly move to replacing them.
At the top of the list, serving as the poster child for worker safety attacks is Amazon. The situation has gotten to the point that even its own shareholders are starting to get active in this endeavor.
What is ironic is this discussion is targeting the one company that is openly trying to automate its entire operation. Amazon seeks to be an end-to-end retailers where the entire process, from order to delivery, is done without humans. Their entrance into the grocery business via the Whole Foods acquisition shows their mindset. Amazon Go stores are already open, using technology as opposed to checkout personnel.
Some are already estimating that more than 1/3 of the jobs lost will not come back. With the first time claims over 42 million in the United States, that is a lot of jobs gone forever.
Obviously, the idea of "profit no matter what the cost" is a path that ends badly. We have seen the fallout from this. However, sometimes another solution is equally as detrimental. In this instance, the activist investors' intentions could result in unintended results that are equally bad for workers.
Nationally, unsafe worker conditions cannot be accepted. Yet, widespread, massive unemployment brings about its own set of problems.
For years, technological unemployment was discussed and it is something we are starting to see come to fruition.
Unfortunately, the activism of investors might just be speeding the process up.
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Posted Using LeoFinance