Mid-Week and ‘The Walmart Effect’

April 16, 2014

3882076720_9d90ef4ca5_z1copyOvercast, some ground fog and really quiet this Wednesday morning on California’s north coast — the environment typical for this area.
Yesterday about the same. Fog in the morning, clearing with bright sunshine in the afternoon, but coupled with a strong, chilly wind.
All’s normal on the Lost Coast.

Surfing the news sites this morning is not exciting. The same stories, the same old, tired people running their yaps about one thing or another and I’m just sick of it all.

(Illustration found here).

One small item did pop out me — the business I’m in now (liquor store manager) via retail sales seems to be in a flux downward as more and more of these low-paying jobs are disappearing.
Via The Atlantic:

The business of selling stuff is becoming much more efficient.
Sales-per-employee have gone from $12,00 to $25,000 in the last two decades.
That means that even as consumers spend more, we need fewer workers to stock shelves and process orders.

One reason retail has become so efficient is that more of it is happening across Internet cables rather than across registers.
E-commerce is gobbling up one percentage point of total sales every two-and-a-half years.
Call it the Amazon Effect.
And then there’s the Walmart Effect.
As I’ve reported, one Walmart worker replaces about 1.4 local retail workers, so that a county sees about 150 fewer jobs in the years after a Walmart opens its doors.
Combined with the Amazon effect, this has dramatically reduced our need for retail workers to sell things, and so retail’s share of the labor force, which peaked in the late 1980s, has been declining ever since.

According to data obtained by The Atlantic from EMSI, the retail industry gained about 49,000 jobs between 2001 and 2013, which means it grew by exactly 0.32 percent. Which means it didn’t grow.
But the major action is at the bookends of this graph below, which shows employment growth in the largest retail subcategories.
Department stores, like JCPenney, lost more than 200,000 jobs this century.
But supercenters like Walmart, which operates in more than 3,200 domestic locations, added half a million (often lower-paying) jobs.

Retail is already a famously low-income industry.
According to the Fed, real hourly earnings for retail workers has actually decreased since 2007, the year the recession struck.
The upshot is that we’re seeing a large industry stricken by the rise of the Internet, which is growing fastest into supercenters like Walmart that pay regularly low, if not minimum, wages to its employees.
For consumers, there’s never been a better time to buy stuff.
It’s not such a happy story for the people on the shopping floor and behind the counters.

And it won’t get any better soon. Smokes and booze, though, will always be happenin’.

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