Robert Reich

As online retail grows, workers get socked

Updated: 2013-12-05T00:09:47Z

By ROBERT REICH

Tribune Content Agency

The most important website last weekend and in weeks to come — on which the hopes and fears of countless Americans are focused (and the president’s poll ratings depend) — is not HealthCare.gov. It’s Amazon.com.

Even if and when HealthCare.gov works perfectly, relatively few Americans will be affected by it. Only 5 percent of us are in the private health-insurance market to begin with. But almost half of Americans are now shopping for great holiday deals online, and many will be profoundly affected — not because they get great deals, but because their jobs and incomes are at stake.

Online retailing is the future. Amazon is a major shopping portal this holiday season, but traditional retailers are moving online as fast as they can. Online sales are already up 20 percent over last year, and the pace will only accelerate. Target and many other bricks-and-mortar outlets plan to spend more on technology next year than on building and upgrading stores.

Americans are getting great deals online, and they like the convenience. But there’s a hidden price. With the growth of online retailing, fewer Americans will have jobs in bricks-and-mortar retail stores.

Amazon announced last summer it would add 5,000 new jobs to the 20,000 it already has. But not even 25,000 Amazon jobs come near to replacing the hundreds of thousands of retail jobs Amazon has already wiped out, and the hundreds of thousands more it will eliminate in the future.

To put this in some perspective, consider that retail jobs have been the fastest-growing of all job categories since the recession ended in 2009. But given the rapid growth of online retailing, that trend can’t possibly last. What will Americans do when online sales take over?

Add to this the fact that most of what’s being sold this holiday season — online and offline — is no longer made by Americans. Vast quantities of gadgets, garments and other goodies are fabricated or assembled in Asia for the U.S. market.

Online retailers are facilitating this move by having these goods shipped directly from Asian factories to distribution centers in America and then to our homes, without consumers ever having to go to a retail store. This means even lower prices and better deals. But it also means fewer jobs and lower pay for many Americans.

Some manufacturing is coming back to America, to be sure, but not the assembly-line jobs that used to be the core of manufacturing employment. Computerized machine tools and robots are doing an increasing portion of the work — which is why many companies can afford to bring their factories back here.

Get it? Technology and globalization are driving the good deals American consumers are getting this holiday season. But the same forces are keeping wages down, and are even on the verge of eliminating many of the low-wage retail and service jobs many Americans now need to make ends meet.

The biggest reason holiday shopping is especially frenzied this season is so many Americans are already so stretched that they’re more desperate than ever for bargains. Sixty-five percent of today’s shoppers are living paycheck to paycheck. That’s up from 61 percent last year, according to consumer research by Booz & Co.

The president’s dropping poll ratings are only partly due to the bumbling rollout of the Affordable Care Act. Americans are grumpy this holiday season mainly because the economy remains lousy for most people.

Technology and globalization are taking over more and more American jobs. It’s hardly the president’s fault. But the sobering reality is the U.S. lacks a national strategy for creating more good jobs in America. Until we do, more and more Americans will be chasing great deals that come largely at their own expense.

Robert Reich, a former U.S. labor secretary, is a professor of public policy at the University of California at Berkeley.

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