Is automation creating retail jobs?

Posted Sep 6, 2017 by James Walker
Automation could be creating jobs in retail. According to a new report, the rise of ecommerce is driving an increase in employment that’s sufficient to offset industry automation. The unexpected finding has been attributed to improved service quality.
Amazon Prime Air Drone.
Amazon Prime Air Drone.
The Progressive Policy Institute determined automation might be creating more job openings after looking at labour statistics from a different perspective. As the MIT Technology Review reports, its new analysis includes segments of the ecommerce supply chain that are usually overlooked. By including jobs in places such as online fulfilment centres, a different trend in the data emerges.
According to the U.S. Bureau of Labor Statistics, 140,000 physical retail jobs have been lost since 2007. In the same period, ecommerce has opened 126,000 new opportunities, creating a shortfall of 14,000 positions. This appears to conclusively demonstrate that automation is taking human jobs.
The Progressive Policy Institute argues that this approach to the numbers offers limited insight into the true situation. Since the scores of fulfilment centres wouldn't exist if it wasn't for ecommerce, all the people currently employed in these locations can also be included. When the problem is tackled from this angle, the number of positions ecommerce has created rises to 400,000.
A member of staff pushes a trolley as she collects orders at the Amazon fulfilment centre in Peterbo...
A member of staff pushes a trolley as she collects orders at the Amazon fulfilment centre in Peterborough, central England
With permission by Reuters / Phil Noble
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Apparently, automation is creating thousands of jobs. They're also better quality positions, since fulfilment centres typically offer a 30 percent higher salary than comparable positions in brick-and-mortar stores. This leads to the intriguing conclusion that autonomous technology is driving a net increase in overall employment.
The researchers explained the finding by suggesting the simplicity of ecommerce is causing significant growth in productivity. Consumers save time by shopping online, causing them to return to digital stores on countless occasions. They ultimately invest more time and money in retail services, spurring growth in the sector. This sets up a chain of continued investment that eventually leads to increased human employment.
The report concludes by attributing the rise in paid work to the reduction in "unpaid household hours" triggered by consumer use of ecommerce. Things you formerly did for free, such as bringing items home from a store or returning unwanted items to a sender, are now completed by salaried members of the economy. Retail is expanding into a wider industry that has to be assessed alongside sectors such as transport and warehousing.
A parcel moves on the conveyor belt at Amazon s logistics centre in Graben
A parcel moves on the conveyor belt at Amazon's logistics centre in Graben
Michaela Rehle / Reuters
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"It may be surprising that ecommerce employment is rising much faster than brick-and-mortar retail employment is falling," said the Progressive Policy Institute. "Since ecommerce companies are supposedly more productive than traditional retailers, people think they must therefore employ fewer people."
"But the increase in paid employment can be best understood by considering that the economic activity "shopping for goods" actually combines two labor inputs: paid market work by retail employees, and unpaid time by households, in the form of driving to the store, parking, wandering through the aisles, checking out, and driving home."
The trend suggests automation could continue to create job opportunities until robots reach the fulfilment centres. As per the visions of tech companies, the report implies robots are succeeding in supplementing human work without replacing it. When measured against wider sectors of the economy, retail seems to be booming and humans are gaining a large supply of well-paid jobs. While it may not be an obvious conclusion, it seems we have autonomy and the Internet to thank.