Is e-commerce a job builder or killer?
While the loss of retail jobs caused by shifts to online selling has become a regular news story, one economist believes the growth of e-commerce is adding net retail jobs, and at better wages to boot.
According to Michael Mandel, head of the Progressive Policy Institute, the problem with the government’s tally of e-commerce jobs is that it ignores jobs in fulfillment and distribution centers. Analyzing job statistics on a county-by-county basis, Mr. Mandel estimated the e-commerce industry created 397,000 jobs in the U.S. from December 2007 to May 2017 versus job losses of 76,000 in the traditional retail industry in the same period.
The e-commerce jobs also paid 30 percent more than those at brick-and-mortar stores and are often full-time and come with benefits. Finally, the lower-skilled jobs involving the building and managing of fulfillment centers are showing up in “places you haven’t heard of in a while” and thus supporting economically-challenged regions.
Some question Mr. Mandel’s math since it assumes a high proportion of jobs in “general warehousing” are associated with e-commerce.
Speaking to The New York Times, Mr. Mandel said there are equal risks that he may be underestimating job growth as overestimating. For example, Amazon.com has said it has 12,000 employees in Kentucky while the Bureau of Labor Statistics reports that state has only 2,640 e-commerce workers and over 23,000 general warehouse workers.
Beyond supporting retail jobs, the time saved through e-commerce is supporting overall job growth, contends Mr. Mandel. By his calculations, the shift to e-commerce over the past nine years has saved American households roughly 64 million hours per week in reduced shopping time, the equivalent of 1.6 million full-time jobs, he wrote in a blog entry on the institute’s website.
The “unpaid hours of household labor” involved in driving to the store, searching for parking, walking store aisles, etc. are shifting to the market sector “as fulfillment center workers and drivers took over the tasks that consumers used to do.”
- E-Commerce as a Jobs Engine? One Economist’s Unorthodox View – The New York Times
- Why eCommerce Will Create More Jobs Than It Kills – PYMNTS
- Amazon, Whole Foods, and the Simple Arithmetic of Household Time – Progressive Policy Institute
- Package-Delivery Jobs Rise as More Consumers Shop Online – The Wall Street Journal
DISCUSSION QUESTIONS: Does it make sense that job growth at warehouses, delivery firms and around other online functions are offsetting losses at traditional retail? Are the majority of online-related jobs better than traditional ones working in retail?