
In Towns Already Hit by Factory Closings, a New Casualty: Retail Jobs - ctoth
https://www.nytimes.com/2017/06/25/business/economy/amazon-retail-jobs-pennsylvania.html
======
ChuckMcM
As the article points out the retail job crush is _exactly_ because the
Factorys closed, nothing more magical than there is less GDP so there is less
work. Previously those factory workers bought things at the store, but now
that the factory is closed they can't (or they cut back) and the stores don't
have some magical source of 'outside of market' money.

They call this out in a couple of places but they never seem to completely
connect the dots, there is _" He renovated the first floor to attract
customers from farther away, customers who might have more money to spend and
more places to go than Johnstown."_ to pull money from towns further away, or
_" But fewer people can afford his products now that the good jobs are long
gone, and Mr. Apryle has had to make adjustments."_

It's not Amazon, its not 'big box' chains, its that the city no longer has a
production base and so the fraction of GDP this space used to produce has gone
away.

~~~
losteric
It's a vicious feedback loop that arguably does involve Amazon and other
global retailers / manufacturing chains - although I wouldn't say they're at
fault.

Consumers are locally optimal buyers, we go for the cheapest goods on the
market. Over time, international imports have been undercutting America-
produced goods. At first, it was American companies that simply outsourced raw
materials... then manufacturing, assembly, service centers, and now even R&D.
All because consumers were chasing the locally optimal ROI.

Rational consumers were undercutting their employers, which in turn forced
their employers to cut labor, wages, or automate. That steadily drives down
the purchasing freedom of employees, like a frog in a slowly warming pot of
water.

In turn, consumers are even more driven to seek out the cheapest goods, which
are still international, and which continue the feedback loop that ultimately
undercuts themselves. Eventually, we end up with an economy that cannot
distribute wealth among the middle/lower classes due to large labor market
inefficiencies (such as the difficulty adults face cross-training into/between
knowledge-based fields)... All while the 1% and 0.1% continued building up
tremendous wealth, buying a disproportionately loud voice in politics and
public opinion.

Amazon and Walmart are centralized manifestations of this issue, but no one
person is to blame. This problem has been building for decades as America has
refused to publicly invest in itself.

As I see it, we need significant public investment in order to get back on
track:

* Infrastructure (water, energy, transportation esp. light rail), creating short-term jobs that improve regional economic competitiveness and reduce consumer debt

* Higher education + adult cross training, restoring an efficient free labor market and voter literacy

* Advanced R&D (incl. but not limited to space+energy), researching and commercializing new fields of industry to replace automated/exported ones

We don't need to raise taxes. Start by cutting back excessive military
funding.

For perspective, we just spent ~$17.5 billion/10 years on _one ship_ \- the
USS Gerald Ford supercarrier. Its defense ROI is questionable; counter-terror
operations and force-projection against lesser states does not warrant a
supercarrier (renovated carriers / allied regional airbases are sufficient),
and potential threats punching at our level (China, Russia) would employee
asymmetric warfare that makes carriers irrelevant (think: smart missile
barrage, fast attack submarines, or maybe just propaganda).

$17,500,000,000 could put 523,000 Americans through a 4 year private education
or 1,750,000 through public state colleges. This sum is also equivalent to 30
years of fusion research funding, tripling the Seattle Link network, and 8x
the the BART expansion to Santa Clara.

Perhaps you have better examples, but these already offer better ROI than a
war ship. There's plenty of fat that can be trimmed or reallocated from our
$598,000,000,000 / year federal military budget.

~~~
brianwawok
Just sending 2 million people to college does nothing. If you are of average
or below IQ, you still will be when you have a degree. And then what?

Every human cannot be a knowledge worker. Some will be bad at knowledge work.

Just slapping a college degree on someone who used to work in a factory can
often be totally useless. Obviously there are some that can benefit. But many
cannot.

~~~
dredmorbius
Bingo. We're not going to educate our way out of this.

[https://www.reddit.com/r/dredmorbius/comments/1x9xpb/were_no...](https://www.reddit.com/r/dredmorbius/comments/1x9xpb/were_not_going_to_educate_our_way_out_of_this_why/)

~~~
losteric
We need quality, not quantity. Plenty of shitty CSE students graduate with
FAFSA, and plenty of intelligent adults locked out because they can't afford
the 4 years.

The answer isn't a blanket grant, but part of the answer _is_ more funding for
higher education.

~~~
dredmorbius
And this gets us back to the ideas which advanced the Stanford-Binet IQ test.

That's not a criticism, simply an observation.

I'm increasingly cognisant of the opportunities, and limits, of education.
It's not a free pass or magic. It costs some resources, though we might well
consider if overprovisioning is better than under. What is taught, and to
whom, is also a major element.

Slightly more:

[https://plus.google.com/104092656004159577193/posts/JLDZdteu...](https://plus.google.com/104092656004159577193/posts/JLDZdteujkk)

------
mc32
It's a big economy and changes take too long trickling down to those forgotten
rural towns once part of the American economic engine.

I'm pessimistic that the federal or even state governments have the will to do
anything about it -in terms of policy to effect change.

Not that top down change always works (Japan for example, has made many, many
half-hearted but ill-conceived attempts at restarting their growth engine) but
smaller nimbler economies have been able to manoeuver economic obstacles (like
Taiwan, Singapore and S. Korea) whereas others have stumbled and fumbled
(Malaysia, Mexico).

That said, we need to try something. Trump tapped into this angst but does not
look like he (or the party) will deliver in the least. Never the less, the
issue is not going away and will only become more pronounced. Someone will
have to do _something_ about it. People will get upset and more radical
elements will be elected till someone begins to take notice and does something
substantial about the economic decline of the part of the middle class which
got by on medium skills.

~~~
princeb
Do the changes need to trickle down to the dying towns?

They are forgotten because they no longer have much value to people outside
the towns. The town itself exists as a conduit through which people channel
their energies together to bring value into their lives. If the conduit
collapses, if the factories and the mills go, how can the people survive? The
raison d'être of the communities has long passed away, but the community
itself hasn't. Put them out of their misery, please!

It is only by some miracle that these towns begin to bring value to the
economy again (and not simply by the unsustainable method of spending and
consuming), but until that happens they will continue to rot. Their minds can
exist in the global hive-mind that is the internet, but their physical bodies
need physical maintenance. And yet they exist too far away and too isolated to
make it economically viable to do so.

The major cities appear to have monopolized the exercise of human labour for
value. Whereas early homo sapiens have loosely organized communities that work
to maintain a loosely comfortable life, modern cities have concentrated human
effort like a parabolic reflector in order to generate luxuries beyond the
reach of mere casual cooperation. These small towns, without the buttress of a
major industrial mill or any economic output at all, captures none of the
benefits of living in a modern world.

The consolation to the community that hopes to see the itself continue is that
these towns are surprisingly hardy, producing generation after generation of
brain-addled drug addicts. My sympathies are not with them.

~~~
kesselvon
The breakdown occurred because we no longer prevent mergers and acquisitions
on the basis of regional monopolies or impact on local economies, but on
whether consumer prices are increased or decreased.

Capital accumulates, and if you let it, it will suck everything out from the
country and suburban areas and concentrate it in the major cities. The decline
of rural America has everything to do with the flows of capital and not a lot
to do with whether small towns are sustainable.

~~~
princeb
capital goes where labour goes, and labour goes where capital goes. it's easy
to forget that capital is not simply money but everything else that is not
labour - buildings, facilities, machines, computers, etc.

this is not a central planned economy. people organize where they want to
organize and it turns out large cities are increasingly where people want to
do that. people - the ones who choose neither to move to rural communities nor
to bring custom - and not capital, are the systematic destroyer of local
communities.

mergers, like large cities, are just another symptom of humanity's
unsatisfiable desire for efficiency. competition good, cooperation better.

------
notadoc
It's fairly obvious that less (or no) disposable income leads to less consumer
spending, which leads to fewer jobs, which leads to less consumer spending,
which leads to.... That is exactly the ongoing story of the vanishing middle
class.

The lack of demand snowballs and branches out to impact many other things the
exact same way that a strong increase in demand spreads out to impact other
things.

With a predominantly consumer driven economy, eventually all of this will
catch up and be a significant drag on GDP at best, though it'd be easy to
argue we're already at exactly that point.

So, what happens next and what do we do about it? If only we had some sort of
large team of people who were elected to solve this kind of problem, and if
only they had some sort of historical periods of widespread prosperity to
reference and model policy on....

~~~
knz
> and if only they had some sort of historical periods of widespread
> prosperity to reference and model policy on....

Isn't the problem that no one can agree what historical prosperity looked like
especially when thinking about the consequences of the policies that lead to
the prosperity.

Was it the 1920's, 1950's, or 1980's? 2000's? Or the age of the Robber
Barron's Or some other time?

Personally I think a bigger issue is the failure of our elected officials to
deal with the things holding prosperity back -
housing/healthcare/education/childcare rising more rapidly than people can
sustain.

~~~
Retric
The social unrest of the 60's was a direct results of widespread prosperity.
Even a minimum wage job for 6 months was often enough to live on for ~1 year.
In part because there where fewer things to buy, but also because expected
standards of living where low and the green revolution drastically reduced
food prices.

The world population was also less than 1/2 what it is today which had other
benefits.

------
Theodores
The article blames ecommerce and Amazon for the latest decline. I don't live
there, however, I believe this is not to do with ecommerce, it is simply the
loss of manufacturing and what happens over time.

In the UK we had many communities thrown on the scrapheap with mines, steel
and much else manufacturing gone. Initially people invest their redundancy
money in things such as a new dog-grooming business, a cafe, a shop, perhaps a
tattoo parlour, depending on what 'follow your passion' leads to. So these
businesses go okay for a while, eventually the redundancy money runs out, or,
in rare instances, the 'follow the passion' business actually meets a genuine
need and a success story happens.

Around the time of this general decline my sister was trying to raise money to
go somewhere fancy with her group of friends. Being skint she decided to raise
some money by making things - things with beads, jewellery, that sort of
stuff. These items sold 'well' but only to her friends whom she was going to
be travelling with. There was no 'external market'. So rather than go on the
big trip to the festival they missed out on that and spent what little money
they had on beads etc. to make stuff to sell to each other. A lesson in
economics was learned the hard way.

To some extent any town/city/country that does not have manufacturing and
external markets will be a variant of my sister's schooldays model of
capitalism. If manufacturing (or mining) jobs go and retail comes along to
'fill the gap', then it cannot last forever. Tourism can't come to the rescue
either.

~~~
Animats
_I believe this is not to do with ecommerce, it is simply the loss of
manufacturing and what happens over time._

First they came for the farmers. Once over half the workforce, now 1.4% and
dropping. Then they came for the miners, now 0.6%. Then they came for the
factory workers, once 40% of the workforce, now 8.1%. Now retail, still at
10.2% and dropping. Coming up next, transportation and warehousing.[1] What's
growing? Health care and social assistance, for an aging population.

This is killing small-town America, because many small towns now have no
function. They were once support for surrounding farms, or had some
manufacturing, but that's gone.

In the early days of the Internet, it was thought that location wouldn't
matter for many jobs. Early ads for Google Fiber made such claims. With enough
bandwidth, your town could prosper again. It hasn't worked out that way. If
everything you do goes in and out over a wire, automation of most of your job
is probably not far off.

Nobody seems to have a way out of this. Education doesn't help that much;
about half of new college graduates take jobs which don't require a college
education.

[1]
[https://www.bls.gov/emp/ep_table_201.htm](https://www.bls.gov/emp/ep_table_201.htm)

~~~
petra
One strange thing about the internet though: Maintaining Eye-contact and
observing body language is critical to the formation of trust between people.
And trust is critical for business. But those capabilities are only available
in the very expensive telepresence suites of CEO's and the like, and this
breaks the key thing we know about information technology - that it is
constantly becoming cheaper. That's a bit puzzling.

And sure this is not fully a tech/biz problem, this is also about culture,
just notice how the most poverished means of communications, textual messages,
became so common in our daily life, even instead of something like video
conferencing.

But here's an experiment: take a few beautiful rural towns, with cheap land
and fast internet. offer trustful connectivity(maybe packaged in a container
form) to a few major metropolitans, and try to see if you can entice companies
to participate and some knowledge workers to migrate to rural towns.

~~~
tomjen3
Trust can be signaled in many ways. A green lock signals trust, as does logos
from trusted companies.

Also the expensive telepresence you are talking about is technology and
technology is continually falling in price.

~~~
petra
Not computer trust. Emotional trust.

As for telepresence falling in price, I remember expensive telepresence room
we're advertised as "being there" and there was specific design for eye
contact and body language, but I haven't seen that yet in those cheaper
"telepresence" systems.

~~~
whatever_dude
Interestingly this "source of trust" with a person is exactly what I normally
do not want in a commercial transaction. I want time and information to make a
decision.

For salespeople figuring you out is part of the job. Knowing how to push your
buttons to upsell pays well.

I can also build trust on a website. It's by selling quality stuff, in a
timely manner, replacing it when needed be, etc. Actual service. That's actual
trust, not being buddy buddy with a salesperson.

~~~
petra
That's true. Salespeople carry negative value in my eyes too.

But if we're talking about work mates, that emotional trust and that human
connection does carry value.

------
oneplane
This job-centric lifestyle seems to point to a problem of sustainability
rather than economics. Jobs are never endless, moving somewhere or creating a
town for one particular job or factory will always end in deserted towns and
closed factories, and not adapting to what is happening around you always ends
in tears. Nothing new here...

If you want to work, you should look for what people need rather than whatever
you did for a job 20 years ago. For example, we'll always need energy and
food, but we won't always need cowboys and coal miners. Instead of trying to
be a coal miner, try to be an energy worker.

~~~
protomyth
> For example, we'll always need energy and food, but we won't always need
> cowboys and coal miners.

Cowboys are part of the food sector. Ranching to be specific. Herding cattle,
fixing fences, and doing all the other choirs on a ranch will probably be a
while down the automation trail. Making some bad decisions like not moving the
cattle from the summer grazing area to the winter grazing area quick enough
can cost a lot of money.

~~~
Animats
"We don't fix fence, we build fence" \- King Ranch slogan.

Herding cows with a drone.[1]

I ride, and I know people who work cattle from horseback, but the number of
people still doing that is small.

Drones are becoming incredibly useful in the industries where somebody has to
check on things over a large area. From farming to power line inspection, it's
become far easier to look at hard-to-reach areas.

[1] [https://www.youtube.com/watch?v=ni-
YxR2j8-g](https://www.youtube.com/watch?v=ni-YxR2j8-g)

~~~
protomyth
> I ride, and I know people who work cattle from horseback, but the number of
> people still doing that is small.

Cowboys have been using ATVs for years. The definition of cowboy is not that
limited.

------
ctoth
This is related to [https://mobile.nytimes.com/2017/04/15/business/retail-
indust...](https://mobile.nytimes.com/2017/04/15/business/retail-
industry.html) which I posted a few weeks ago but got no traction. This is a
critical part of the story that people talking about robots taking our jobs
are missing. It's already happening, it's not just robots but also new
scheduling algorithms and frankly people just not giving two shits about
retail workers.

~~~
themodelplumber
Education is going to be absolutely crucial for those who are currently
performing retail work. I recently attended training by my church on this
topic and one of the key focii at present is helping people get the education
they need in order to become self-reliant, in any way that works for them.
This has never been emphasized to this degree in the past, and the initiatives
have enlarged scope from developing nations only to now include the US and
Canada. Bachelor's degrees in e.g. web development from an accredited private
religious university are offered for around $8K; courses in starting
businesses and improving job prospects are offered on demand, etc. It is clear
that there is a lot of need right now and the impact of the changing flow of
business is being felt heavily.

~~~
mistermann
Training in what though, everyone can't be a web developer?

If everything is manufactured overseas or by robots, retail is largely locked
up the a handful of giant corporations who can bankrupt competitors, in many
places the former middle class spends all their disposable income on housing
and can't afford new services, and the 1% largely don't spend their money. And
on top of it, the utopia promised by diversity is actual splitting societies,
right when we most need cooperation and unity.

To me this is start to look like an near unsolvable problem.

~~~
Moshe_Silnorin
A nice old-fashioned world war should solve it.

~~~
geofft
The neat thing about world wars is that they involve a _huge_ amount of
government-directed spending of taxpayer funds on things that make very little
economic sense, but the merely directing that spending does wonders for the
economy and the country's prosperity, assuming you win.

Apart from the fact where you're killing people for no reason, it's not very
capitalist at all.

~~~
qubex
That's ’just’ Keynesian economics: the government finding an excuse to boost
aggregate demand by borrowing money to spend into the local economy. War has
the relative advantage of constantly depleting the assets invested in and thus
demanding re-investment, whilst the moral clime enhances the population's will
to lend money to the state to fund such an endeavour (”Buy war bonds to fund
our battleships! Help us defeat the Hun!”) Investment in infrastructure, on
the other hand, generates return on investment for the local economy. War
efforts often involve lots of infrastructure work too to support the
industries that need to build the weapons (ports, railroads and highways to
move goods, _& cetera_).

------
withdavidli
Worked in a mall for a decade. As money moves out so do retail stores. Small
mom and pop shops barely sustain because of little to no labor cost. Small
businesses that do have to hire employees close down fast because labor cost
becomes unsustainable due to low margin business. Worse is when big box stores
moves out, they tend to be the attraction that drove people to the mall in the
first place, and smaller stores got business from being "discovered" along the
way in high traffic locations.

------
ctoth
One more piece if anybody stumbles across this:
[https://morecrows.wordpress.com/2016/05/10/unnecessariat/](https://morecrows.wordpress.com/2016/05/10/unnecessariat/)

------
matt_s
I wouldn't consider any retail job (e.g. cashier), a middle class job. Nobody
wants to think of themselves as lower class but clearly there is a delineation
somewhere? Are you still considered middle class if you are unemployed and the
industry you worked in left town?

Similar things will happen to small towns along trucking routes if tractor-
trailer driving becomes automated. You will have less need for restaurants,
small hotels, truck-stops, etc. if an automated truck is passing through at
3am.

I don't see solutions to this other than people leaving these towns or
learning new skills.

~~~
whatnotests
When I worked retail (1996-2001) as a manager in an outlet mall, I could
afford rent and food, but not much else, and this was in Colorado.

I can't imagine calling retail "middle class" since it pays so little.

------
bluedino
Well, if there's a bright side it's that the good retail jobs are long gone. I
had friends whose parents made decent livings selling suits or appliances at
Sears and JCPenny. You used to make 40k/year as an assistant manager at KMart.
Now it's almost impossible to make $10/hr in retail. There are no benefits or
even full-time hours. And the only stores hiring work you like a dog with two
people per shift like Dollar General. You have to stock, clean up, and play
cashier.

------
Mz
Sort of a TLDR of the piece:

 _Rural counties and small metropolitan areas account for about 23 percent of
traditional American retail employment, but they are home to just 13 percent
of e-commerce positions._

 _Almost all customer fulfillment centers run by the online shopping behemoth
Amazon are in metropolitan areas with more than 250,000 people — close to the
bulk of its customers_

 _“I’m thinking about what’s next,” he said. “We’re essentially thinking of
Johnstown as an economic development laboratory.”_

