The rise of Amazon (and e-commerce more generally) has led to fears that retail employment is going by the wayside. That could be a problem: more than 10% of US nonfarm payrolls are found in retail jobs. But as the chart below shows, the share of Americans working in retail relative to total employment has been trending lower on a secular basis for almost 30 years after peaking at 12.2% in 1989. In other words, even if e-commerce is hurting retail jobs, it would be in the context of a labor market that was already shifting away from that kind of employment for two decades before online sales started to eat into demand for retailers.
As you’ll note in the chart above, retail employment has recently hit a rough patch. Below we show the two-month change in retail employment over the last ten years. As shown, the 60,600 job losses in retail for the last two months ending in March are the worst for the industry since the last recession. We would note, however, that Nonstore retailers (the category of monthly retail sales which capture the online-only e-commerce industry, including Amazon) are up to 35% of total “traditional” bricks and mortar retail sales. When comparing them, we stripped out categories less vulnerable to Amazon: food, eating/drinking places, auto and auto parts, and gasoline. The traditional retail industry has been dealing with an onslaught of competition for years without a significant impact on job creation. So is Amazon to blame for the last months of retail job destruction?
It’s not clear to us that traditional retail is responding only to losing market share. For instance, as shown in the chart below, the categories we consider “traditional” retail are still seeing YoY sales growth; true, that sales growth weakened dramatically through December of 2016, and that could be in part responsible for the weak jobs numbers the last couple of months. But it’s hard to imagine an industry seeing growing final demand (as indicated by the sales growth) just up and slashing workers. There’s no way to be sure, but at this point we think blaming Amazon for the most recent two retail industry jobs prints is a bit unfair. More likely: weather effects, random statistical noise, tighter labor markets, better opportunities in other industries, and a struggle to find high productivity workers led to the last two prints.