How Ecommerce Creates Jobs and Reduces Income Inequality

By / 9.5.2017

The last retail revolution, the rise of the big box store, was not a good thing for the typical sales clerk or cashier.

“Warehouse clubs” and “supercenters” started popping up everywhere in the late 1980s. Retail productivity as measured by the government doubled from 1987 to 2007, as this new retail format was more efficient than traditional department stores and mom-and-pop operations, many of which were pushed out of business. Nevertheless, average real wages for
retail workers actually fell from 1987 to 2007, and the pay gap between retail workers and the rest of the workforce widened.

Now comes the ecommerce revolution. Given the bad experience of workers with the last retail revolution, it’s only natural to worry that this one will have an equally bad effect. As of the new first quarter of 2017, ecommerce has less than 9% of retail sales. What will happen to brick-and-mortar retail workers as 10% or 20%of sales move onto the Internet? Are we facing
a retail “apocalypse” that will destroy jobs that employ 15% of the American work.


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