A report released last month by the Brookings Institution ranked the U.S. cities most vulnerable to economic disruption due to automation. It included a handful of the usual suspects in the Rust Belt and other blue-collar strongholds.
But right there at No. 5 was the Las Vegas metropolitan area.
The explanation is obvious: Despite diversification efforts, the casino industry remains the engine that drives the Nevada economy. Many casino jobs are of the type that could become obsolete thanks to technological innovation. Dealer-less blackjack or roulette? It already exists.
The Brookings report, based on Census data, was issued last month. It has proven prescient. Last week, MGM Resorts International began the process of providing adequate notice, as required by its labor contracts, to the Culinary union that it might cut jobs and hours for bartenders and cashiers. The reason? Automation.
“The company has notified employees that it could install beverage systems that automatically measure and mix drinks at the touch of a button,” the Review-Journal reported March 5.
MGM has yet to announce when the technology will be implemented or how many workers might be affected. Yet it’s safe to say that such developments will become more and more common in the near future. This will create opportunities for some, but problems and job insecurity for others.
“Over the long run, there’s no evidence that automation reduces the number of jobs,” notes Christopher Mims of The Wall Street Journal. “Indeed, countries that automate the fastest appear to also grow their economies the fastest. But that’s hardly a consolation to people facing automation-related layoffs.”
The Culinary union reached a new contract with MGM and Caesars last year after threatening to strike. The agreement includes provisions to retrain displaced workers or find them other employment. But there’s no denying that generous wage and benefit hikes have helped put pressure on the industry to cut costs — and automation is one way to accomplish that.
Union officials may want to consider their role in hastening these job losses — and encouraging the displacement occurring in other industries.
For instance, Culinary executives have been among the most vocal advocates for piling on Nevada’s small businesses by imposing a $15-an-hour minimum wage. Such a policy cannot be imposed without economic consequences.
The Culinary and other unions can’t stop technological progress. Automation in many fields — including the casino industry — is coming regardless. But labor organizations only speed up the process when they embrace a progressive agenda that seeks to mandate higher costs on job creators.