WASHINGTON, Oct. 6 (Xinhua) -- The burgeoning online shopping has hit traditional brick and mortar stores hard and eliminated tens of thousands of retail jobs, while e-commerce has also created as many jobs in other sectors and places, according to a recent research from the Federal Reserve Bank of New York, warning the trend would enlarge geographic and income inequality.
Online sales in the U.S. have grown strongly, with their share of total retail sales increasing from 2.5 percent in the mid-1990s to around 5 percent in the mid-2000s, then doubling again to exceed 10 percent today, according to the research released on Thursday.
2012 marks the start of diverging trends of employments at department stores and nonstore retailers. Since early 2013, department stores have eliminated roughly 80,000 jobs, on net, while nonstore retailers have added roughly 100,000 jobs, the research said, emphasizing the trends show no sign of abating.
While department stores have been shedding jobs, other segments of the retail sector have been adding jobs. In other words, online shopping isn't killing jobs but shifting jobs from one industry to another. Over the past year, nonstore retailers have added almost as many jobs (29,000) as department stores have cut (32,000), according to the research.
The problem, however, is that geographic distribution of jobs is very different for online retailers versus brick and mortar outfits. Areas that are losing a lot of department store jobs may not be the ones gaining online retail jobs.
The research found that between 2012 and 2016, 75 percent of American counties lost department store jobs. While a majority of those counties did see some increase in nonstore retail jobs, four-fifths of these counties lost out on net-that is, department stores shed more jobs than nonstore retailers added.
Economists at the New York Fed explained that in contrast with traditional retailers, online sellers tend to concentrate all or most of their staff in one or a few locations. The best example is King County of Washington State, home of the online shopping giant Amazon. In 2012, King County's nonstore employment represented 1.4 percent of the total employment in the county; by 2016, that share had doubled to 2.8 percent.
Moreover, the average online retail job income exceeded 59,000 dollars in 2016, while the average wage for department store workers was only more than 20,000 dollars.
The staggering difference suggests that online shopping might not only enlarge geographic inequality but also income inequality.
