Online shopping now accounts for over 10% of all retail sales in the US, and it’s no secret that it’s affecting retail jobs across the country.
Department stores, which have been declaring bankruptcy at an alarming rate, have been one of the hardest-hit segments.
According to a new report on the Federal Reserve of New York’s Liberty Street Economics blog, jobs at department stores — such as salespeople and cashiers — have fallen to their lowest levels in decades.
At the same time, non-store retail jobs — like back-office functions and warehouse employees for companies like Amazon — are at record levels.
While the overall jobs situation in the US is doing relatively ok — the unemployment rate was 4.4% in August — this seismic shift in retail isn’t exactly equitable, the Fed says.
“Why should this be a concern? One reason is that the geographic distribution of jobs is very different for online retailers versus brick-and-mortar outfits,” New York Fed researchers Jason Bram and Nicole Gorton wrote. “In other words, areas that are losing a lot of department store jobs may not be the ones gaining online retail jobs.”
Department stores are almost universal. They have incentive to be located wherever their customers are. E-commerce companies, like Amazon, tend to be much more concentrated in a few hubs, rather than spread out across the country. As a result, places losing department stores may not be replacing those jobs.
There is hope, though. The bank says that the shift to non-store retail jobs will actually open up some other industries to job growth.
“It is important to remember that the labour market effects of online retailing go well beyond the retail sector,” wrote the Fed.
“A more thorough analysis would consider the indirect effects of e-commerce on warehousing, local freight trucking, and couriers and messengers–three industries that have seen fairly robust job growth in recent years.”