“…. A permanent restructuring is underway … traditional retail jobs may never recover.”
That’s the money quote in Michael Corkery’s new New York Times analysis, “Is American Retail at a Historic Tipping Point?”. He points out that “this transformation is hollowing out suburban shopping malls, bankrupting longtime brands and leading to staggering job losses … “The job losses in retail could have unexpected social and political consequences, as huge numbers of low-wage retail employees become economically unhinged.”
And the closings and layoffs are accelerating. Corkery estimates that since October about 89,000 of these workers have been laid off, “more than all the people in the United States coal industry.”
E-commerce, of course, is seen as the major factor in this epic change. Corkery: “… it is so easy and fast for people to shop online that traditional retailers, shackeled by fading real estate and a culture of selling in stores are struggling to compete.”
So why haven’t we consumers of news heard and seen more media attention to this in recent months?
Times op-ed columnist Paul Krugman offers this answer:
“Why does public discussion of job loss focus so intently on mining and manufacturing, while virtually ignoring the big declines in some service sectors? … One answer might be that mines and factories sometimes act as anchors of local economies, so that their closing can devastate a community in a way shutting a retail outlet won’t … A different, less credible reason is that mining and manufacturing have become political footballs while services haven’t.”
Significant relief for the many workers laid off across the country — most of them lower-income people — doesn’t appear to be imminent. Progressive attempts such as in-store training to develop employee skills relevant to the new shopping trends are not sufficiently scalable. Krugman ruefully observes that only an improved social safety net is likely to be an ameliorative: “While we can’t stop job losses from happening … we can limit the human damage when they do happen … While we can’t ensure that any particular job endures, we can and should ensure that a decent life endures even when a job doesn’t.”
Corkery captures this macro social/economic/political dilemma with this virtual dialogue:
“This is creative destruction at its best. We are downsizing a part of the economy that is uncompetitive.” – Mark Zandi, chief economist at Moody’s Analytics.
“Theoretically this is the marketplace rationalizing itself, but in the interim, how do people survive?” – Mark Cohen, former Sears executive, now director of retail studies, Columbia University.