Amazon’s PrimeAir drone will not eliminate thousands of jobs

If you happened to watch CBS News’s “60 Minutes” this weekend, you will have been amazed at just how Amazon is innovating the marketplace. Unlike the United States government that uses drones to spy on the American people or to shoot men, women and children overseas, Amazon is hoping to use drones to deliver packages as fast as possible.

Amazon CEO Jeff Bezos, who said the company hopes to start testing drones within the next five years, described the small, unmanned aircraft called “Amazon PrimeAir.” These drones could possibly deliver packages that weigh up to five pounds (2.3 kilograms) within nine miles (16 kilometers) of Amazon’s distribution centers. Each drone would be autonomous and would be programmed to fly based on the GPS coordinates.

The goal is to have a half-hour delivery time.

“In urban areas, you could actually cover very significant portions of the population,” Bezos said. “It won’t work for everything — we’re not going to deliver kayaks or table saws this way. These are electric motors, so this is all electric. It’s very green. It’s better than driving trucks around.

“The hard part here is putting in all the redundancy, all the reliability, all the systems you need to say — look, this thing can’t land on somebody’s head while they’re walking around their neighborhood.”

With further advancements in technology, goods and services, the economic myths are already being uttered by the economic illiterate.

For instance, Neera Tanden, the president of the Center for American Progress, tweeted Sunday: “When Amazon’s drones eliminate thousands of jobs, there will be fewer people to buy Amazon goods #downward spiral.”

This is simply untrue due to the fact that, according to the Austrian Theory of Economics, all unemployment is temporary, the labor market simply experiences a shift and other labor resources are allocated to different segments of the economy. An example would be that with a paucity of demand for mail and package carriers there will be a higher demand for those involved in the science, technology, engineering and math sectors and those positions would need to be filled with high pay.

Historical data has not shown that new technologies eradicate employment for millions. All what new technology does is create a larger pie (or a brand new pie) for everyone to enjoy. For instance, today’s average computer may have eliminated jobs of the past but how many new jobs did the PC create? What about Microsoft Office, social media and smartphones? All of these advancements generated new employment opportunities.

Think about consumers, too. ATMs have decreased the need for banking tellers, but now since financial institutions have increased their profits and made their operating costs more efficient, customers, whether for personal or for business purposes, can enjoy lower monthly fees.

Just because Amazon – and numerous other companies across the globe – has introduced a new technology to the marketplace, it doesn’t mean thousands of jobs will be lost and no one will have money to purchase goods and services. It’s economically fallacious.

In today’s world, it’s adapt to the market or get left behind by complaining about innovation and cost savings.

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Comments

  1. say what??
    “Technology creates a bigger pie”. its true technology will create new jobs, but a bigger pie no way. What it does do is concentrate more wealth in fewer hands. All these new jobs where are they?.Have a look in china mart (walmart) nothing is made here anymore, you must be blind. Factories are closing for good, and those were high paying jobs. ATMs didn’t make things better, but it did get rid of a lot of workers. I remembered the friendly teller and the interest I got. Now its service fees, and I have to do all the banking myself. Selling Chinese made Iphones wont turn the economy around either. Who do you think is going to make this new wonder chopper’s American workers, I think not. Austrian Theory of Economics, can only work when we are all playing by the same rules and that’s not the case anymore. What I’m going to say will go against your grain, but what is needed is fair trade not free trade. North American content rules have kept the automotive sector here. What it means, is a certain amount has to be made here, otherwise they too would relocate (china)our jobs too.

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