Mish: JCPenney to Eliminate All Checkout Clerks, Instead Using RFID Chips and Self-Checkout; End of JCPenny? How Many Jobs At Risk?

Struggling retailer JCPenney is making some big changes that will affect customers and its clerks. The store is getting rid of its check-out counters.

JCPenney in Frisco, TX

JCPenney in Frisco, TX (Photo credit: Wikipedia)

Mish Shedlock, a prodigious talent and highly-regarded writer on international economics, is off the mark on this one.

He thinks that if JCPenney is successful with this gambit, and they remove checkout counters in all of its 1100 stores, then “we are talking about the elimination of lots of …if the move by JCPenney is successful, other stores will follow…we are talking about the elimination of 10’s of thousands of jobs if other stores follow suit.”

But this is provably false. First of all, JCPenney is trying to cut costs. If it finds that this gamble, a “bet-the-whole-company” gamble, succeeds, JCPenney will in have no further need for checkout clerks. But Mish forgets that many clerks at JCPenney are trained to do double- and man the present checkout counters when there are customers waiting. When there are no customers waiting, they attend to other duties.

If layoffs are necessary, JCPenney will no doubt attempt to find other positions to fill in their stores, thus minimizing the “thousands of layoffs” Mish fears.

But this misses the main point: what if thousands are laid off as a result of a breakthrough move that further reduces costs to consumers? Will not those lower costs leave more money in consumers’ hands to put to good work elsewhere? And will not that increased demand far exceed the temporary, albeit painful, necessity of laying off workers.

Isn’t this what has been happening for years? What about workers making typewriters (remember them?) or picking cotton (before the cotton gin?). Examples abound in history, resulting in a higher standard of living for everyone.

How unfortunate that someone as well-educated and knowledgeable as Mish is that he has missed this essential part of how the free market finds ways to bring costs down for consumers, to the benefit of everyone.

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