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Why Retail Productivity is Being Undermeasured, and Why Ecommerce Jobs are Rising

By / 7.10.2017

I have consistently argued that ecommerce is boosting employment by creating jobs at fulfillment centers. For example, over the past year, ecommerce jobs have risen by 61,000, while brick-and-mortar retail has fallen by only 7,000. That sounds like a counter-intuitive result, given that ecommerce is supposedly more productive than brick-and-mortar retail.

But the increase in paid jobs is much easier to understand if you realize that shopping for goods is actually the result of two inputs: paid market work by employees and unpaid time by households, in the form of driving to the store, parking, wandering through the aisles, checking out, driving home.

According to the American Time Use Survey from the Bureau of Labor Statistics, in 2015-2016 Americans spent .645 hours per day on average shopping for consumer goods or traveling to shopping, or 4.5 hours per week. Since there are 260 million Americans aged 15 and over, that means Americans spend approximately 1.2 billion hours a week shopping for consumer goods or traveling to shopping (that’s the equivalent of 30 million full-time jobs).

By comparison, in 2006-2007 Americans spent 4.75 hours per week shopping for consumer goods or traveling to shopping, or 0.25 more. That extra quarter hour corresponds to 64 million extra hours per week (260 million x .25). So because of the increase in ecommerce over the past 9 years, American households save 64 million hours per week, or the equivalent of 1.6 million full-time jobs.

Some of these jobs are being moved into the market sector: The fulfillment center workers do the aisle-cruising that shoppers used to do themselves, the truck drivers take the place of the consumers driving back and forth to the mall.

This also implies that retail productivity is being unmeasured, since we’re not counting the reduction of household hours. I don’t have an estimate yet, but the undermeasurement could be substantial.