Tyler Cowen points today to David Deming, who is alarmed at the decline in retail jobs:
The final labor market trend we uncovered was a very rapid decline in retail sales jobs, show in the figure below. Retail sales hovered at around 7.5 percent of employment from 2003 to 2013 but has since fallen to only 5.7 percent of employment, a decline about 25 percent in just a decade. Put another way – the U.S. economy added 19 million total jobs between 2013 and 2023 but lost 850 thousand retail sales jobs. The decline started well before the pandemic.
I don't find this alarming at all. Take a look at it this way:
Retail employees today generate about $39,000 in sales each month. Adjusted for inflation, this is up 32% since the year 2000. In other words, retail employees are more productive than they used to be.
Now take a look at the economy more broadly:
Each person in the US generates about $86,000 in GDP. This is up 32% since the year 2000. We are collectively that much more productive.
It is not just normal, but good, for economies to become more productive. Likewise, it's good for individual sectors to become more productive. This is a favorable sign for retail, not a bad one.
How can you, Cowen, and Deming talk about the decline in retail jobs, and increased productivity in retail, without mentioning the Internet's impact on bricks-and-mortar stores? That, added to the continued spread of big-box stores, seems to me to be the reason we don't need as many shopkeepers or clerks.
This is a few years old, but yep
https://www.retaildive.com/news/e-commerce-could-kill-30k-stores-and-half-a-million-jobs-by-2025/570950/
Not to mention self-checkout lines and the increasing share of the pie going to stores like Costco and Aldi, which put things out in shipping boxes, rather than using labor to shelve things all pretty.
And for those who have worked retail, it's not a bad low-wage job as they go, but it's the kind of job that rarely leads anywhere in terms of increasing skills or anything... so the less of these sorts of jobs, the better.
Also we do need them. Stores and understaffed so everything is a mess you have to go on a treasure hunt to find someone to ring you up and they gave up on theft.
I was in retail long enough to know the Little Shop Around the Corner Days of family owned small businesses, with decades-long employment for clerks and managers. WalMart drove all that out of existence.
These days you only see that at hardware stores--small ones, not the Megalo Mart.
https://youtu.be/AtjWHolens8?si=pQpLlV4fwHtTLuQe
But that's what people want.
I've been checking out my Brooklyn neighborhood on Street View of 1940s New York. Some New Deal project took photos of every building in NYC. One small mystery solved: the first floor of typical houses and smaller apartment buildings are about five feet above ground level, but there are some individual apartments and offices around here that are right at ground level. Turns out they were storefronts. There were no supermarkets, even in 1940. Little stores all over the place.
No doubt a higher overhead way of doing business with higher prices than a supermarket. Basically every store was a convenience store.
Retail sales have been getting more efficient (= higher sales per employee) for well over a century.
Back before 1900 a clerk might find each item you want on the shelf or in a bin, weigh it and package it. Then write the prices on a paper receipt and add up the total manually. Then self service and cash registers, then bar codes so the price of each item didn't have to be keyed in individually plus inventory and ordering automated. Self check out is the same as all those other innovations improving productivity over the years.
Department stores combined a bunch of shops, and before cash registers (and long after) they used vacuum tubes to send invoices and money to the office and receipt and change back so no money changing and cash register reconciliations all over the store.
Big box stores like Home Depot also combine a bunch of what would have been smaller stores. Big box stores depend on people having cars so they can go farther to buy stuffand buy more at a time.
The business that first innovates makes more profits, then in a competitive market others catch on and eventually prices as dictated by supply and demand come down.
Continual increase in productivity is the main reason we have an above peasant level per capita income. But almost all the wealth generated from increased overall productivity in the economy started to be directed to the wealthier classes with Reagan instead of across the board after a long time of all classes being in lockstep.
Average wages for all non-supervisory and production workers, who are the majority of workers, is still below the level of 1972:
https://www.skeptometrics.org/BLS_B8_Min_Pov.png
but retail has fallen far behind. The nature of retail salesperson has changed - it used to be a fairly well-paid white-collar (or dress) job. Big-box stores, fast-food, etc. have made these jobs less important. More jobs in direct retail will be replaced by those in warehousing and delivery for etail.
However much they sell, being a retail worker is no longer a good job on average and jobs in retail will get more scarce. This is how the economy works sometimes.
Economic writers on the whole (not to mention people who comment on economic matters in blogs) need to make up their minds about whether there are and will be too many or too few workers. If there are too few workers - in any area - wages should be rising. Is that happening?
Fewer employees on the floor and the C-suite geniuses can't figure out why shoplifiting is increasing?
Many of the jobs haven't gone away. The former sales person who served you in person is now serving you over the phone and is called tech support.