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Businesses The Almighty Buck Technology

E-commerce Is Concentrating Jobs, Not Killing Them (axios.com) 105

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.
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E-commerce Is Concentrating Jobs, Not Killing Them

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  • not so bad (Score:2, Insightful)

    by 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.

    • Not so good if you dont.

      Well that settles it then. We'll just have to try to put the genie back in the bottle. As we all know it's basically impossible for people to move to where there are jobs available and we know from American history that such a thing has never previously happened. Besides, the Constitution probably forbids it anyways.

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

        • In the past, plenty of people moved across the country just to pick lettuce, when their existing job evaporated with no hope of return. Go read "Grapes of Wrath", Steinbeck.
          • 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!

      • by naubol ( 566278 )
        Yes, you too can know the joys of a watered down vote by virtue of living in a densely populated area! Time to share your two senators with many more people! And be gerrymandered so your reps have no interest in what you say.
      • As we all know it's basically impossible for people to move to where there are jobs available

        "Impossible" is hyperbole, but retraining and moving for a job is a substantial sudden expense, especially for someone with a social skills disability. Is it better to move before finding the job or vice versa?

        Besides, the Constitution probably forbids [moving for a job] anyways.

        Correct. It grants the Congress power to set criteria for allowing immigrants to work in the United States. This affects someone who resides out of the United States but whose job was "concentrated" to the United States.

      • Seriously... the jobs are not stable.

        One of the articles reporting on Amazon jobs (for example) is retirees living in RV's traveling seasonally from amazon job to amazon job. It's good for Amazon- the jobs are not part time and have no benefits. It's good for the RV owners- they were going to migrate anyway and have retirement incomes so it's extra cash. It's not really a sustainable model long term.

        And Amazon is working on packing robots now. They are funding it. Amazon is a very short distance from

    • "lies, damned lies, and statistics"
      - possibly by benjamin disraeli by way of mark twain.

    • Not even so nice for most who live in those areas. An elite few get high-paying jobs, everyone else ends up on the catching side of gentrification.

  • Nonsense! (Score:5, Insightful)

    by DaMattster ( 977781 ) on Friday October 06, 2017 @01:29PM (#55323149)
    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! (Score:5, Informative)

      by war4peace ( 1628283 ) on Friday October 06, 2017 @01:37PM (#55323239)

      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.

      • 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.

        • That certainly won't happen in the USA, where the only time that someone actually care about their neighbour is when both houses have been destroyed by a hurricane.

          Remember, social assistance just makes people lazy and more likely to use drugs (or whatever bullshit politicians have invented recently).

        • by HiThere ( 15173 )

          Sorry, it sends a strong signal about what skill are currently needed. There's nothing permanent about those requirements.

          E.g., currently there's a strong need for truck drivers of various different types. in 5-10 years, 15 at most, we can predict that there will be a strong oversupply in that market. But don't think truck drivers are unique, they are only one of the larger segments that will be affected.

      • 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.

        • Not complaining (I'm not affected :)) but stating that the study ignores the fact that people who got higher paid jobs are DIFFERENT from the people who lost the lower paid jobs. i'm glad that some people found higher paid jobs in e-commerce, but at the same time I realize that some of those who lost the lower paid jobs are now living on benefits and that reduces economic development.

      • >Higher-skilled workers got more jobs, while lower-skilled workers got the shaft.

        good.

        The only thing missing is UBI

        • by HiThere ( 15173 )

          It seems to be saying that, and it's also saying there are the same number of workers, just in a different location. This seems unbelievable.

          The reason it seems unbelievable is that this would means costs would increase, and companies don't work that way. The most likely reason is that this study is bullshit. Probably there are a large number of people who lost their jobs that weren't counted for some reason or other. There are other possible reasons, but none that I have thought of have made me trust t

    • by zifn4b ( 1040588 )

      This sounds an awful lot like "corporate speak." It sounds like an HR buzzword. "Oh, we're just concentrating jobs ...."

      With all new, concentrated e-Commerce power! It couldn't possibly be related to this [youtube.com].

    • Re:Nonsense! (Score:4, Interesting)

      by ShanghaiBill ( 739463 ) on Friday October 06, 2017 @02:16PM (#55323599)

      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?

    • It sounds like an HR buzzword. "Oh, we're just concentrating jobs ...."

      It's a valid meaning. Concentration, as in ~ camp.

    • Your error is in believing that we _need_ brick and mortar stores because They told you that you need instant access to all the mass-produced consumer garbage that They tell you to buy. They create jobs you say, but all those jobs serve no purpose but to facilitate consumerism and funnel money up the pyramid away from the lower and middle classes. It's a waste of human potential. Let the brick and mortars die, tax the e-tailers, and implement a universal basic income.
  • Yes, in bumfuck (Score:4, Interesting)

    by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Friday October 06, 2017 @01:30PM (#55323155) Homepage Journal

    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.

  • Yes, they're concentrating them in the Amazon warehouses, and then they're going to replace them with robots due to economy of scale.
    • by DogDude ( 805747 )
      They're concentrating in the Amazon warehouses in the first place because most people are unabashedly selfish, and simply don't give a shit where they spend their money.
      • Not exactly. Those of us who live in rural environs tend to shop online for things we otherwise cannot get without spending 2-3 hours behind the wheel.

      • by RobinH ( 124750 )
        I buy a lot of stuff from Amazon and Aliexpress now. All the products in the local stores are made in China anyway, so it's all the same manufacturers. Now I pay $8 on Amazon with 2-day prime shipping for stuff that's $11 in the local store, and I only pay $3 if I buy it from China, free shipping, if I'm willing to wait 6-8 weeks. The local store's paying less than $3 for the same item anyway, in volume. Yeah it's hurting local stores. Good riddance.
        • And people forget that stores only tend to carry the "popular" items.

          For example, wife and I buy unlocked smart phones so we are not locked to a single carrier. We have bought our phones from Newegg and Amazon and gotten our cases from there too - we didn't necessarily want whatever Apple/Samsung/LG and the carriers were pushing.

  • If you don't happen to live next to Amazon's new distribution center and work in retail? Too bad for you.

    Eventually we are going to really miss that corner store and rue the day we decided that next day deliver works just fine.

  • by Anonymous Coward

    The folks who lost the jobs where they aren't now concentrated.

    They still have the problem of finding new work in a poorer economic setting because profits from these work concentration sites are not flowing to small towns.

    And geographic options are decreasing for people who remain employable.

    I want the progress. I also want to see us take care of each other while we make progress. Greater acceptance of telecommuting will help. Maybe we still need better tools for getting connected (the Jedi hologram room w

  • by iMadeGhostzilla ( 1851560 ) on Friday October 06, 2017 @01:51PM (#55323367)

    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.

  • by gurps_npc ( 621217 ) on Friday October 06, 2017 @01:52PM (#55323383) Homepage

    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.

    • Entertainers leverage technology and are able to reach millions using it. They don't use a small stage anymore.

      If the basic needs are met, what I would consider shelter, security, food and water, I do agree that entertainment is a bottomless pit of money however; you can only wear so many Rolexes at once. The jobs that form the basis of entertainment can not possibly sustain a substantial workforce on their own because they themselves work on the principle of entertaining as many people as possible already.

    • by q_e_t ( 5104099 )

      human desire is boundless

      That doesn't seem to be backed by psychological studies, or even a basic study of humanity. If it was boundliess then rich people would spend all their money on gold drinking bowls for each of their 500 pets, but they don't. And desire it also limited by morals and laws.

  • Do the new jobs pay as much as the old jobs?
  • by ErichTheRed ( 39327 ) on Friday October 06, 2017 @01:55PM (#55323419)

    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: (Score:3, Informative)

      by 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 [wikipedia.org] been [wikipedia.org] done [wikipedia.org] before [wikipedia.org]. 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 t

  • by Kjella ( 173770 ) on Friday October 06, 2017 @01:56PM (#55323425) Homepage

    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.

    • 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.

      That's not really surprising, what you are seeing is a productivity gain. They generated more revenue with fewer man hours of work. It's tempting to think of productivity from the perspective of "I can do the same work for less money". But business don't really think like that, they are looking to grow and expand not maintain the status quo. Business look at this as "I can generate more profit for the same expense". So the steady state is probably going to have more workers in total, but fewer workers per d

      • by Kjella ( 173770 )

        That's not really surprising, what you are seeing is a productivity gain. They generated more revenue with fewer man hours of work.

        Which is essentially the opposite of what the article said which was that work moves from retail to e-tail, jobs more or less remain.

        It's tempting to think of productivity from the perspective of "I can do the same work for less money". But business don't really think like that, they are looking to grow and expand not maintain the status quo. Business look at this as "I can generate more profit for the same expense".

        Obviously, but generally they think of their business or their business model. Netflix wants streaming media and themselves to grow, they don't give a shit of broadcast or cable TV is in decline. If you go broad enough companies can rarely expand the market much, if you're talking about he whole *tail market the real wages are stagnant and most people can't spend more money th

  • E-commerce Is Concentrating Jews, Not Killing Them

    Look, I'm not saying E-commerce is literally Hitler but I don't like where this is going. ;)

  • by oldgraybeard ( 2939809 ) on Friday October 06, 2017 @02:04PM (#55323503)
    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 ;)
  • If mail order isn't getting things done with less labor, then you wouldn't expect the prices to be any better. And if the prices aren't better, then the reason consumers are choosing it must be convenience or some other quality.

    Hmm. Yeah, actually, I can believe that. Fits my experience, anyway. Score 1 anecdote point.

  • In the end, employees lose anyway because more people in a certain area means more of the salary must go into the home, which is probably less desirable. Furthermore longer commutes means less personal time and time for family.
  • by JenovaSynthesis ( 528503 ) on Friday October 06, 2017 @02:59PM (#55323909)

    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.

    • by DogDude ( 805747 )
      You might want to try shopping at retail that isn't Best Buy. I don't know why you'd expect a Big Box store to be a good shopping experience.
  • It also means the death of small retail business - the way that most people rise up in society, from being a worker/slave to having their own business and accumulating some wealth.
  • Working in an Amazon distro center is much worse than Manning a cash register...
  • The summary didn't seem to mention anything about wages vs. cost of living in the jobs replaced vs. the jobs created.

    And that's assuming I believe their study.

  • I wonder if the conclusions are the same for US and wordwide

    Many big e-commerce businesses are US based and they sell goods offshore. Did we replaced non-US brick-and-mortar retail jobs by US e-commerce jobs?

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