It was mostly good news when, last week, Amazon announced it would be creating 100,000 new jobs in the U.S. over the next 18 months. I write mostly because while the spike in retail jobs at Amazon was positive for all the prospective Amazonians and for the online retail sector as a whole, the announcement also highlighted the loss of thousands of jobs in the old brick-and-mortar retail space.
For example, it brought back to the news the fact that Macy's is sacking 10,000 employees, Limited is eliminating 4,000 jobs, and in the past four years 200,000 total jobs have been lost in the retail sector. I also write mostly because, in the long run, the improved efficiency of the online sale vs. the in-store sale will be desirable for consumers and the American workforce alike, but in the short term there will be a lot of people in very undesirable spots.
“The economy as a whole gains from creative destruction, but we don’t put many resources into training displaced workers,” [said Lawrence Katz, an economics professor at Harvard who studies labor and technological change]. “That’s a real problem, and in practice, we need to do much more.”
The half-full glass in all of this is greater productivity—an economic force that has been otherwise lacking during the recovery from the Great Recession, said Michael Feroli, chief United States economist at J. P. Morgan.
Productivity in the retail sector, online and offline, jumped 3 percent in 2015 compared with a measly 0.8 percentage point for business over all, he said. The typical online retailer generates $1,267,000 in sales per employee versus $279,000 at bricks-and-mortar stores.
Today, Amazon employs 156,000 people in the U.S. and 300,000 total worldwide. And so, the 100,000 new U.S. jobs will significantly boost Amazon's headcount. It will also likely affect numerous brick-and-mortar retailers. And not in a positive way. That is, no doubt many more companies will be forced to follow Macy's and Limited's lead and significantly downsize due to Amazon's dominance of the retail space (and due to the general rise of the online sale at the expense of the in-store sale). However, there will be, according to Amazon, thousands of other jobs created in the process.
Amazon has said that its employment figures alone do not capture its full effect on jobs. On Thursday, the company said its marketplace business, through which independent merchants sell goods on the company’s site, sustained 300,000 additional jobs in the United States.
Presumably, a portion of these new jobs are a result of Amazon's newish Handmade at Amazon enterprise, which was presumably created to take on the queen of handmade goods, Etsy.
As for the types of positions Amazon plans on adding over the next year and a half, they include "highly paid engineers and software developers in addition to hourly warehouse workers." They also include hundreds of jobs that you can do in the privacy and comfort of your own home. These such jobs are located under virtual locations on Amazon.jobs. In addition, the new positions include hundreds of jobs and internships for new graduates and college students. Those can be found here.
There is a black cloud around this silver lining for employees and would-be employees of Amazon. And that is the inevitable rise of the robots.
The Amazon announcement comes as the company is introducing automation that could one day cost jobs. It uses robots in many of its warehouses, though it says they work in conjunction with people instead of replacing them.
Moreover, with the rise of automation, the future of once-solid trades like truck driver and delivery worker is in doubt, threatened by the likes of driverless cars and drones. And that has prompted an intense debate among economists and some policy makers about just what society and especially government owes these workers.
Look for this debate to heat up (especially in 140-character outbursts) come Friday.
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