Thursday, October 12, 2017

Jobs in the Retail Apocalypse

The year 2012 may have been the beginning of the retail apocalypse, according to a Federal Reserve Bank of New York analysis, which compares job growth over the years in two types of retail establishments—department stores and nonstore (online) retailers. Before 2012, the number of jobs in both types of establishments closely followed the ups and downs of the business cycle. But in 2012 everything changed. Department stores began to shed jobs by the tens and hundreds of thousands while online retailers have been adding to their payrolls.

To make matters worse for those laid-off department store workers, say the researchers, the stores eliminating jobs are often in different locations from the online retailers who are hiring—a geographic disparity documented in their study. Even if laid-off department store workers moved to where online retailers are hiring, they aren't likely to land a job because skillsets are different, as evidenced by average pay levels— about $20,000 a year for department store workers versus about $59,000 a year for those employed by online retailers.

Source: Federal Reserve Bank of New York, Liberty Street Economics, How Is Online Shopping Affecting Retail Employment?

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