How Ecommerce Creates Jobs and Reduces Income Inequality

By / 9.5.2017

The expansion of ecommerce is a significant plus for the income and living standards of high-school educated workers, not a minus. That’s welcome news, as demonstrated in our latest paper, “How Ecommerce Creates Jobs and Reduces Income Inequality:”

We estimate that ecommerce jobs in fulfillment centers and ecommerce companies rose by 400,000 from December 2007 to June 2017, substantially exceeding the 140,000 decline of brickand- mortar retail jobs. We explain this job growth by showing that households are saving 64 million hours of week of shopping time because of ecommerce, and some of these unpaid household hours are being shifted into market work. One consequence is that productivity growth is being underestimated.

Based on a county-by-county analysis, we estimate that fulfillment center jobs pay 31% more than brick-and-mortar retail jobs in the same area. This suggests the shift to ecommerce jobs is reducing income inequality by raising the wages paid to high school graduates.

This research was cited in today ‘s Greg Ip’s Wall Street Journal piece, “Workers: Fear not the Robot Apocalypse”.  Read the paper here.