Unrest in Retail: The “Amazon Effect” and Employment
The consumption tendencies of the millennial generation have been the subject of discussion around the country, and the world. Preferring Uber to cabs, streaming to television, and Amazon to the mall has led to significant shifts in the way companies are doing business. Online and mobile commerce have become a massive part of the modern consumption landscape. These shifts are not without reaction from the “old landscape,” however.
According to Time Money, “department stores in particular are still nowhere near figuring out how to thrive nowadays.” In short, shares of companies like Macy’s and Sears are falling, spending at these big box retailers is falling, and hundreds of locations will be closing in the next year. Sears announced 26 flagship stores would close, as well as 78 Kmarts; and Macy’s named 65 locations that will close in 2017, with plans to close 100 more in the not-too-distant future.
What does this mean for domestic American labor? Less than a year separated from an election that featured a strong focus on the domestic economy and workforce, the effects of such a forceful shift could impact politics at all levels in the nation. Why now? According to preliminary data from the U.S. Bureau of Labor Statistics (BLS), 2017 has already seen 61,000 jobs (seasonally adjusted) lost in the retail sector. This loss is the largest 3-month change in total employment since late 2009; when America was still in the earliest stages of its recovery after the Recession. Not only is this a large number of working class jobs, albeit at relatively low-wages, but this number is greater than the estimated 53,000 jobs in all aspects of coal mining, “an industry on which President Trump has been fixated,” according to Axios. While some of these jobs have been picked up by warehouse counterparts at companies like Amazon – which pay more on average – the number of these opportunities is fewer than the numbers of those losing work. As these companies move towards automation, even these alternatives are not a steady option.
With these numbers in mind, this week’s map looks back at the five year period from 2011 to 2016. Has retail been declining for longer than these graphs show? The map (below) shows the rate of decline in retail jobs over the half decade mentioned. The final numbers are the change in retail sales jobs per 1000 jobs in a state. In other words, states that lost three retail sales jobs or more for every 1000 jobs are the most saturated red, for example (i.e. California, Pennsylvania). States that actually gained retail sales jobs per every 1000 are represented by the more pale/white shades on the map (i.e. Idaho, Montana).
The map ultimately shows that this drop is far more recent than BLS’ most current state-level data provides. While most were showing cracks over the five year period studied (30 states showed a loss), many were also showing signs of growth. Nonetheless, the signs are there, and whether this coming year is accompanied by major retail job loss may shape the discussion of jobs going forward – with midterm elections on the horizon.