
E-Commerce as a Jobs Engine? One Economist’s Unorthodox View - prostoalex
https://www.nytimes.com/2017/07/10/business/dealbook/e-commerce-jobs-retailing.html
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Spooky23
This sounds to me like reading statistics without understanding them, or
finding a gap in BLS numbers.

I worked at CompUSA in the mid 90s, which was a big box format computer store
similar in size to a Bed Bath and Beyond or Staples. We had like 75-100
employees, 5-7 were salaried, and only 15-25 were full time. Most part-timers
worked 25-28 hours a week. (They wanted to avoid state health insurance
requirements which kicked in at 30)

I don't think that Amazon is replacing those manhours 1:1. I'd guess that they
need 1/5 of the manhours. Most of the supporting people (UPS, FedEx, LTL
freight, soda machine guy, cleaners) are a wash between retail and ecommerce.

The retail->logistics displacement hurts a lot of marginal workers like kids,
single mothers and others. It also creates a permanent underclass of temp
workers who as contractors will always be treated worse than employees. There
isn't much of that in retail.

~~~
heisenbit
There are lies, dammed lies and then there are statistics... If online is
cheaper then online can not pay higher wages when selling the same volume of
goods in the long run. It is that simple.

We are undergoing a huge change. It makes no sense whatsoever to look at
distribution centers and retail stores and weight jobs against each other as
we are in a transition period. A lot of retail these days is loosing money and
the jobs in these businesses may go away. There is a glut in retail space
(particularly in the US but also elsewhere) but asking rents take a while to
go down. At the same time real estate in general still moving up or at least
sideways. The new distribution centers may have a fair number of well paying
jobs but how much of it is transitory too? At the moment this is where the
investments flow but a lot may well be one-offs.

Retail is revolutionized. Online has reached a market share where there is
material impact on brick-and-mortar stores and the ecosystem around them.
Shop-floor salespeople and rents are for many products too expensive to
compete with online on price. Companies are also moving more towards direct
sales to customers cutting out middle layers to be able to control pricing
better and protect the traditional shop - although that only works for
products with clear USP. Traditional shop use has to change and provide more
value than just transactional selling. Some are distributing directly and
combine it with services (Apple) or are may be only showing stuff (Tesla).
Showing tangible products is still important but unless it is so important
that manufacturers are willing to pay for it then it won't happen anymore. I
suspect a lot of space is going to be freed up the coming years and one can
only hope new constructive uses will be found.

~~~
remline
> If online is cheaper then online can not pay higher wages when selling the
> same volume of goods in the long run. It is that simple.

Real estate, profit, and salaries/bonuses to executives are all diminishing
the wage/quantity of workers in retail and can more easily be cut in online
markets where independent merchants need low capital. So independent merchants
might be making more money from their own direct labor than the corresponding
retail workers.

~~~
Spooky23
Independent merchants are hard to measure because they are captives of Amazon
and eBay, and only the platforms really know what is up.

They rarely amount to much more than jobbers.

------
azemetre
E-commerce has added 178,000 jobs since 2002 while department stores have lost
448,000 in the same period according to the US Bureau of Labor Statistics. I
haven't read the paper the article is reference but it appears to be very
liberal with how the author wants to define Ecomm jobs.

[https://www.nytimes.com/interactive/2017/07/06/business/ecom...](https://www.nytimes.com/interactive/2017/07/06/business/ecommerce-
retail-jobs.html)

The job parity isn't the same, I don't honestly believe the rhetoric of "other
jobs will be created over time in new sectors." You can do so much more with
less and it's only going to get worse for rural and suburban communities
because it appears Ecomm is mostly growing in large metro areas.

~~~
deepnet
Neither have I read the referenced paper[1] yet, but in contrast to department
stores shedding jobs e-commerce I offer these observations.

E-commerce has enabled many small 'boutique' or 'mom-and-pop' style shops to
survive in locations without sufficient footfall.

The combination of small business bricks and mortar engendering trust with
e-commerce supplementing footfall and enabling the tourist dollar to be spent
after the holiday has helped many small town artisan and craft stores.

[1] 1st Q 2017 ecommerce US census report
[https://www.census.gov/retail/mrts/www/data/pdf/ec_current.p...](https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf)

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hn_throwaway_99
I'm skeptical. As pointed out in the article, automation at fulfillment
centers will ramp up quickly. Warehouses are pretty easy to make into "clean"
environments, and automating them should be a lot easier than, say, driverless
cars or fruit picking.

That said, one thing that makes sense to me is warehouse workers are a highly
efficient use of labor, and as such it makes sense that it pays better than
retail. Pretty much all of their time is spent doing something in service to a
customer, while in retail there is a ton of standing around doing nothing, or
worse, pestering customers with lots of "Can I help you with anything?"

~~~
Jabanga
Automation at fulfilment centres will drive down prices, which will increase
the volume of goods ordered online. Given labour is the only major scarce
input to production for most categories of goods, the decrease in prices (and
by extension, the increase in number of goods shipped) should be roughly
proportional to the decrease in labour hours needed per good, resulting in no
net change in labour utilisation.

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jondubois
The only real progress brought on by technology so far (in terms of human
happiness) is in medicine.

Other than that it has mostly served to give people options that they don't
really need.

If technology is not freeing up people from their jobs, then I think it isn't
delivering the real progress that humanity needs.

Personally, I feel that the jobs have gotten worse especially in the last 5
years. I used to be an all rounder software engineer and these days I find
myself more and more being either a front-end developer or a back end
developer depending on the company... And the job is becoming increasingly
tedious; that's why I change jobs every 6 to 12 months. I get paid more but
the job gets more boring.

Most people in the West shouldn't need to work but instead of coming up with
UBI and taxing rich shareholders more, the government prefers to invent
increasingly narrow and meaningless jobs to keep the masses busy.

I think that's why Bitcoin is so valuable, everything in our system has become
so extremely inefficient and low in value that now the only thing required for
something to actually have value is the fact that it can get people's
attention.

If something can get people's attention and keep them busy, then wealthy
people and big companies will poor some of their infinite money in it.

~~~
a_imho
_Most people in the West shouldn 't need to work but instead of coming up with
UBI and taxing rich shareholders more, the government prefers to invent
increasingly narrow and meaningless jobs to keep the masses busy._

Reminds me of David Graeber On the Phenomenon of Bullshit Jobs. It strikes a
similar chord [1]

[1][http://strikemag.org/bullshit-jobs/](http://strikemag.org/bullshit-jobs/)
(need to click 'here' to access)

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mozumder
Probably a better way to figure out the real employment numbers behind
eCommerce is to trace the economy behind an average persons yearly consumption
with and without Ecommerce. If the average person is spending more with
eCommerce then you're going to have more employment due to the bigger economy
behind it. (Assume $1000 spent by the average person in both cases result in
equal employment.)

You can then trace second order effects by comparing where the employment is
occurring and in what industries.

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moomin
Sounds like he's not comparing like with like: he's taking the greater reach
of the tech industry and comparing them with a more restricted reading of the
previous industry.

That isn't even the worst thing with this reading: we know that the
availability of decent jobs is going down. If, as he says, e-commerce is
pushing them up, he needs to demonstrate a previously unidentified force that
is large than the development of e-commerce pushing in the opposite direction.
I find it highly likely that such a force exists.

~~~
jstanley
> we know that the availability of decent jobs is going down

Do we know that? Are we sure it isn't just that people are being created
faster than jobs?

~~~
moomin
Well, that's trivially true but you should still be worrying, since the US is
growing at a historically unprecedentedly low rate.

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zeckalpha
Key point near the end of the article:

> To Mr. Mandel, it’s not that e-commerce jobs are directly replacing
> traditional retail jobs. Rather, he describes a world in which some of what
> he calls “unpaid household labor” that we all do when we drive to the mall,
> park, shop and bring the goods home has been transferred into the labor
> market.

So sure, if you only look at the paid jobs, under an e-commerce regime we have
fewer paid jobs than under big box retail. But if you factor the previously
unpaid labor, we're netting more jobs.

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baybal2
Americans never bought into eCommerce.

Just like US lagged with smartphone and mobile internet adoption, until Apple
came with its smartphone, US will be off reach for the industry until
eCommerce will get its "iphone moment"

~~~
SomeStupidPoint
Two out of three US households have Amazon Prime [0]. So I'm not sure what you
mean by the US never buying into e-commerce (or what an "iphone moment" would
mean in this context).

[0] [https://www.forbes.com/sites/shephyken/2017/06/17/sixty-
four...](https://www.forbes.com/sites/shephyken/2017/06/17/sixty-four-percent-
of-u-s-households-have-amazon-prime)

~~~
baybal2
Compare how much average American spends online vs average Chinese or Russian.

~~~
SomewhatLikely
The old infrastructure is still in place and has advantages in some cases.
Those countries never built the same level of retail infrastructure, so it
makes sense they would buy more online. Similar trajectory happened here with
landline usage vs cell phones, credit cards vs phone payments, cars and road
infrastructure vs transit. We will see it with other disruptive technologies
going forward as well. We will probably be among the last to transition the
majority of our vehicles to electric because of huge existing infrastructure
in gasoline distribution. If self-driving cars become reality, transitioning
parking lots, parking garages, traffic lights, etc. will take some time while
cities that will be built after that disruption can avoid that infrastructure
cost.

