E-commerce Is Concentrating Jobs, Not Killing Them (axios.com)

A reader shares a report: The growing popularity of online shopping has hit traditional retailers hard, culminating in a spate of retail bankruptcies and store closures in recent years. But according to a new analysis from the Federal Reserve Bank of New York, the retail apocalypse has actually created nearly as many jobs as it has killed. Though e-commerce and other non-store retailers have hired nearly as many workers as traditional retailers have cut, these new jobs are much more geographically concentrated.

Comments

not so bad

[Anonymous Coward]

See its not so bad if you look at the numbers in *just* *the* *right* way....

Nice if you already live in those areas. Not so good if you dont.

Re:not so bad

[ShanghaiBill]

Not many people are going to move across the country for a packing job in a warehouse.

Re:not so bad

[Hognoxious]

In the past infant mortality was double what it is now and if you got rust in a cut you'd probably die.

Yay past! Past FTW!

Nonsense!

[DaMattster]

This sounds an awful lot like "corporate speak." It sounds like an HR buzzword. "Oh, we're just concentrating jobs ...." I hate articles like this that insult my intelligence and assume that I have no critical thinking skills. Well, maybe they hope that I do not have critical thinking skills. With eCommerce, there are fewer people needed as it is all about automation. In a brick and mortar store, you have salespeople. In an eCommerce setup, the salesperson is totally bypassed as you do your own shopping and check out when you want. Some stores do offer a pop-up chat where you can ask questions but this person is likely a shared commodity among several eCommerce stores. This is why sometimes the person at the other end of the chat takes some times to answer you. I don't believe this study has any merit whatsoever. What happens to all of the peripheral jobs that brick and mortar stores create? There are people that needed to maintain the spaces and service them when needed. If the store is in a mall, then the stores support the various services like security, cleaning staff, and maintenance technicians.

Re:Nonsense!

[war4peace]

Not only that, but the article (the original one, not the summary slashdot copied almost word-per-word) says:

If wages are a rough proxy of employers’ demand for certain skillsets, then these two categories of jobs would seem to have different skill requirements: in 2012, the average online retail job paid slightly over $50,000, while the average department store job paid just $20,500. By 2016, the average wage for nonstore workers exceeded $59,000, while the average wage for department store workers remained roughly the same. Part of this pay gap reflects the fact that department store jobs are more likely to be part-time. Nevertheless, the difference is staggering, suggesting that nonstore retailers demand a different type of worker than department stores do. So, even if laid-off department store workers were willing and able to move to, say, King County, they might lack the skillsets sought by e-tailers.

The amount of jobs stayed the same, but the people who got axed from brick-and -mortar stores are the ones that would never be able to "switch jobs" and become e-market employees. Higher-skilled workers got more jobs, while lower-skilled workers got the shaft.

Re:Nonsense!

[Wrath0fb0b]

Indeed. At the same time this sends a strong signal to the next generation of workers about what skills are going to be needed in the future.

As a country, we need to come to terms that technological change within the timespan of a generation is going to change the kind of skills we need. The solution is not to stifle change or to throw those workers to the curb, it's going to be to accept it and to provide a social safety net so that those folks left behind can live in dignity.

Re:Nonsense!

[Anonymous Coward]

Yes but none of those people working the retail store have those skills. More, most of them do not have either the scholastic background or, in some cases, the raw intelligence to master those skills.
Some of the people who use to work in those retail stores will never find another retail, or any other kind of job. Similar to the miners and steel workers who have experienced long term unemployment and have no prospects of ever finding work they are qualified for.

Re:Nonsense!

[ShanghaiBill]

In an eCommerce setup, the salesperson is totally bypassed

That is a feature, not a bug.

I don't believe this study has any merit whatsoever.

I agree that it seems implausible, but it was done by the Federal Reserve. What motivation would they have to lie or distort?

Re:Nonsense!

[Gavagai80]

You're really complaining that low-paid jobs were replaced with higher-paid jobs? Income inequality levels and a near zero unemployment rate tell you that there are plenty of low paying jobs out there, it's those middle and higher income jobs we need more of.

Yes, in bumfuck

[drinkypoo]

The jobs are geographically concentrated in the middle of nowhere, where few people actually live, because real estate is cheap. This leads to more commuting, where retail jobs are located near where people hang their hats.

Re:Yes, in bumfuck

[drinkypoo]

The presence of high-tech jobs in an area drives people to live there, which bestows upon the area a thriving economy and rising costs of real estate.

e-tail doesn't create as many high-tech jobs as it destroys retail jobs. Most of the jobs it creates are in shipping, which pay just as shit as retail.

Concentration allows for more "efficiency"

[iMadeGhostzilla]

Meaning the tail of the income distribution becomes thinner and thinner. That's assuming what the article claims is true.

What's the problem with the income tail becoming too thin? The premise is that this is one nation and everyone is expected if the need arises to spill their blood for the country equally. Somehow when too many are struggling too much a different sentiment arises.

That said I believe the nation will self correct, and that we are on the path to doing so.

Very logical

[gurps_npc]

Technology doesn't kill jobs, it creates them. ALWAYS. But the new jobs require more skill, so there is a lag while people retrain.

200 years ago there was no such thing as a regularly paid professional sports. The closest we came was the roman gladiators that received endorsement contracts and occasionally a retired gladiator (usually a slave that had won his freedom) was paid large sums of money to return to the ring.

Now we pay our athletes huge sums of money. Not counting the agents and all the other related new jobs.

From the day we became farmers instead of merely hunter gathers, Jobs come from the desire for things, not the needs of society.

And human desire is boundless, not limited by a set amount of food, clothing, etc. Give us all a sex robot and we will demand two - for a threesome of course.

Rest assured, trust in human GREED it will never run out, there will always be jobs.

Not sure this is a good thing

[ErichTheRed]

This would explain Amazon's proposal to build a second "headquarters" that's been having every low-cost municipality begging for the chance to host it lately. Maybe they want to continue poaching AWS talent from Microsoft in Seattle and Google in SV, and send all the "B players" in the retail division to some cheap locale. The problem with e-commerce vs. traditional retail is that all your employment funnels up into warehouses and back-office campuses, and the jobs in every smallish area of the country dry up. And over time, those back-office campus jobs will get eliminated as well, so I'm guessing this consolidation is temporary. An example I personally know of is the company that manages my retirement account. Headquarters is in Boston, and I'm sure that's where they have all the super-smart traders, fund managers and executives. But my statements and customer service calls from from some back office in Dallas.

The problem I see in general with the labor market is that the entry level positions are being eliminated, and there's a big gap between zero experience and expert in terms of requirements for jobs. Retail used to fill that gap at the low end, and entry-level corporate work used to fill the need to soak up all the generic college students with a generic BS in management. I remember 20 years ago seeing people who partied their way to a degree doing as little work as possible just show up to group interviews senior year and get picked for some random corporate function. The world will be a very different place if the only entry level position is at Amazon's fulfillment center packing boxes 12 hours a day...in previous times these students I'm referring to would be able to become senior paper pushers, then managers and directors and have a good life. When you kill that career ladder for anyone except those who can write web front ends in Node.js, you're setting society up for a huge disruption.

Am I advocating make-work? Yes, I think I am because the alternative of massive unemployment is not something we're set up to deal with. If you live in one of the middle-tier cities (think places like Atlanta, Dallas, Charlotte, SLC, etc.) you most likely have some huge company's back-office functions located there. Drive by their campuses sometime - they probably occupy one or more huge office buildings and employ thousands of people. Each one of those thousands of people is supporting a household, buying things, paying taxes and having kids. What will we do when every one of their jobs is eliminated either due to automation or offshoring?

Re:Not sure this is a good thing

[Anonymous Coward]

Easy answer: make-work. You even said it yourself.

There's a lot of liberal hand-wringing about setting up UBI (universal basic income, a.k.a. welfare on steroids) and how difficult it is to get conservatives to agree to it.

Instead, look to a different liberal concept: UBE: Universal Basic Employment. It's been done before. These were so successful that many of the things they built are still in use today. Everything from Hoover Dam, down to those bridges that are now crumbling and old, 80+ years later, to those fancier-than-they-should-be stone signs and artfully overbuilt pit toilets in the national parks: those were all PWA, WPA, and CCC projects.

The government needs to spend its money doing things that they should be doing: protecting the country (military) and building and maintaining infrastructure (roads, communications, etc.). That's literally why money exists. The government "produces" these services (protection and infrastructure), and pays for it with fancy-looking IOU's printed on weird cloth-paper. If they need a bigger workforce to get their job done, then they should hire some employees to do it for them.

Now, it'd be mighty nice of them if they'd just guarantee that if you couldn't get a job anywhere else, you could always get a job with the government doing public works and/or public defense. The public defense part already works this way. So set up a non-military civilian service organization that is run like the military to do the public works side of the government's product line. Now you have UBE, and with it, UBI-but-only-if-you-work-for-it. As a bonus, the bill setting this whole process up could probably dangle a conditional carrot in front of private industry: no more minimum wage. Because who's going to work for private industry for lower wages than UBE pays? It'll only be by choice, not through necessity. And you can get Republicans on-board by shouting from the rooftops how it reduces regulation on private industry, even though it applies much more stick than carrot.

Strange use of statistics...

[Kjella]

If you look at the first graph from 2012 to 2017 e-tail went from ~30 to ~45 billion USD while employment went from ~440k to ~570k. That's 50% growth with 30% more employees. And that's in a booming business sector where lots of new systems are being designed and rolled into production, what happens when you go more steady state? It would be interesting to ask Amazon how many they'd really need for a skeleton staff that did nothing but fill deliveries of existing products using current systems. And where it's going in 10-20 years, I mean you don't expect radical changes at the tipping point because if you waited that long you're way too late to the party. You begin at the tipping point or even before the tipping point because you'll have the biggest snowball when it starts tumbling downhill.

FYI I work with small e-comerce clients

[oldgraybeard]

I have clients scattered across the US, some live in metro areas some in rural areas.
Their servers are located god knows where in some data center. Only 3 live in the same state I do.
I do a majority of my work remotely, from my home office or my office/work shop that is 2 miles from my home.

It is true, Amazon is having a large effect on things. And they are really hurting most small e-commerce sites, since Amazon skims 8%-15% off the top of every invoice total, which really hurts the smaller operators since Amazon takes a large chunk of what little margin there is on most items plus in order to get real visibility on Amazon you must use fulfilled by Amazon and they also charge an inventory management fee if you do that.

But if Amazon gets the sales volume up enough an Amazon store can work. But their user interface for managing your store truly sucks. And their master inventory system is a complete mess. And it is a constant battle with them as they re categorize your products from 8% commission groups to 15% commission groups and you spend a week or 2 arguing with them to get them changed back to the proper group. Then next month they will move some other inventory items to the 15% group. It is a mess, but a mess that is forced on more and more small e-commerce sites.

BTW That is why Amazon supports Internet Sales Taxes, They want to force small e-commerce sites to switch to Amazon Stores so they get first shot at skimming profit off the top of all sales.

Now getting back to how this relates to the article. These e-commerce sites need technical individuals to help them wade through the technical complexities if they really want to be successful. So there is a niche for tech outside of the high cost of living hubs. But it takes a different approach and a lot of work.

Now in the end Amazon "WILL/HAS" win/won. And individuals like me will need to find other niches that allow us to live where we want. But that is just the way of things ;) Change is a constant ;)

Retail is Killing Itself

[JenovaSynthesis]

No, Amazon isn’t killing retail. Retail is slitting its own throat and has been for over a decade now. They pay their workers minimum wage for the most part and wonder why they don’t get quality people (in other words they’re getting what they’re paying for). They over work their good employees to the point of burnout or they cut hours on employees forcing them to get jobs elsewhere to make ends meet. And they wonder why they can’t get or keep anyone.

Look at their “marketing” too. It’s all about sale after sale after sale and coupon upon coupon upon coupon. On top of that is the attempt to chain you in with a high interest store charge card too (because they get a kickback from the bank). Nothing of course about how their stores are well stocked and constantly replenished. Nothing about the friendly, ever-present sales staff available to help you, etc.

But Amazon has just become a scapegoat for retail’s own failures. Sure Amazon has more inventory and a bigger network of shipping/warehousing than most stores, but that advantage is negated by the fact that in a more urgent cases Amazon simply cannot deliver. Fixing dinner and the appliance you need dies? Can’t run out to Amazon.Com and buy a new one but I can at a retail store. My Bluetooth headphones died the other day and I needed a pair for today so I went to Best Buy and got a pair because Amazon wouldn’t have been able to get a pair delivered to me before tomorrow.

You know what drives me to Amazon? When I walk into a store and they don’t have what I need. Oh sure they’ll order it for me but it’ll take a week to get there versus the two days Amazon can get it to me (and this was before Prime). A while back the video card on my computer died so I went to Best Buy’s site and all current generation GeForce cards were online only even though it was 6+ months after release. My local store did not have them nor any store within a 50 mile radius.