Slopulism is taking over America

Summary

The article argues that 'slopulist' policies—well-intentioned but economically illiterate populist proposals—often achieve the exact opposite of their stated goals. Specifically, legislative efforts to protect retail jobs by mandating discounts for self-checkout will force low-margin grocery stores to raise baseline prices and mathematically incentivize them to accelerate the replacement of human cashiers with automated systems.

•Rhode Island enacted the Restrictions on Self-Service Checkout Stations Act (effective Jan 1, 2027), requiring one human cashier for every three self-checkout stations during peak hours.
•Similar anti-automation retail legislation is being introduced or considered in New York, California, Massachusetts, Connecticut, Washington, and Ohio.
•A proposed New York bill mandating a 10% discount for self-checkout aims to compensate consumers and protect jobs, but would effectively make human cashiers prohibitively expensive for stores to maintain.
•Grocery store profit margins are extremely tight, historically ranging between 1.5% and 2.8% according to the FMI, meaning stores cannot absorb mandated discounts without raising baseline prices.
•Because the grocery industry is highly competitive, stores that attempt to retain human cashiers and charge higher prices would be rapidly undercut by competitors aggressively deploying self-checkout.
•The author defines 'slopulism' as policy scams that sell well due to public economic ignorance, categorized into accidental misunderstandings and dangerous ideological maneuvers.

Read time 6 min

Length 6,373 chars

Category macro

Ideas

Noah Smith Economist; ex-columnist, Bloomberg Opinion

The article highlights a growing wave of state-level legislation (RI, CA, MA, CT, WA, OH) aimed at restricting self-checkout and mandating human cashier ratios, which threatens the already thin 1.5-2.8% profit margins of major grocery chains by forcing higher labor costs. Risk: Stores may successfully pass these mandated labor costs onto consumers through higher baseline prices, neutralizing the margin impact.

Noah Smith Economist; ex-columnist, Bloomberg Opinion

Rhode Island's new law restricting self-checkout stations to a 3:1 ratio with human cashiers, alongside similar bills in multiple states, represents a direct regulatory headwind to retail automation vendors and self-checkout deployment. Risk: If states instead pass 'discount' mandates rather than hard caps, the economic incentive for grocers to fully automate actually increases, which would be bullish for self-checkout vendors.

Ideas

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