Economic Perspective: E-Commerce and Retailing

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MARY WALDEN:

“Today’s program looks at e-commerce and retailing. Mike, there’s a large shift occurring in the buying behavior of consumers. A greater share of sales is now being done using online buying, also referred to as e-commerce. How is this impacting employment opportunities in the retail industry?”

                                                               MIKE WALDEN:
“We can clearly see the shift in the job numbers. In the last 15 years, the number of e-commerce jobs has increased 334 percent while the number of jobs in traditional retail, particularly department stores have actually gone down by 25 percent. Now, if you look at those two percentages you might say, ‘No problem. Whoa, we’re seeing e-commerce jobs go up over 10 times faster than department store jobs are going down. So there must be no problem.’”

“Well, this is where you have to be careful with statistics because those statistics translate into numbers in terms of 178,000 more e-commerce jobs added, but 448,000 department store jobs cut. So clearly in the overall retail area we’re seeing decline in retail jobs, and this is because e-commerce jobs are less labor intensive. You’re pairing an individual with technology. You’re not needing people to greet folks on the store floor et cetera.”

“So I think we need to be careful here about, perhaps, thinking that well there’s no big change in the number of total employees in retail and there is. And it’s likely to go down. One upside of this however is that the data shows that average e-commerce job pays more than the traditional retail job.”

Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook, and public policy.