The job sector that some Tri-Cities residents love to hate is going through an unprecedented change and localization on a new study helps put a better face on it. It’s not a new story. Call it Version 2.0 of How Technology Drove the Tri-Cities’ Great Labor Market Restructuring.
Technology – not NAFTA – neutered manufacturing as the Tri-Cities’ leading job provider. And retail is on the way to becoming the next major sector to feel the bite. A study by the Cornerstone Capital Group, a financial services firm, predicts that use of technology in retail will put between 6 million and 7.5 million jobs at risk during the next decade. That accounts for 38% of the jobs in today’s retail sector.
Apply that locally, and you’re talking about almost 10,000 fewer Tri-Cities retail jobs. That’s 5.8% of the total regional private sector labor force. It would move retail from its current position as the region’s fourth largest jobs provider to the seventh place – just ahead of mining, logging, and construction. Ironically that sector ranked slightly behind retail as the sector that took the hardest hit in the Great Recession. April’s Bureau of Labor Statistics tables were used to baseline for the sake of the example.
Much of retail’s woes are focused on Amazon and e-commerce. But look closer and you can see other signs that are already so common they’re accepted as normal. They may not look like Optimus Prime or R2-D2, but they are robot workers all the same. Think of the self-checkout stations at Walmart and grocery stores, or the kiosks popping up on the tables at local restaurants. They are the children of the ATMs that put many bank tellers and clerks on the street looking for new jobs. It’s not really a new story. Remember telephone operators?
Anyone who reads the business news knows that retail is staggering under tectonic changes that have seen over 3,000 store closings and a growing list of bankruptcies. E-commerce and the overbuilding of retail outlets are getting most of the media’s attention as this phase plays out. But the bigger backstory is technology/automation. Here’s how Cornerstone’s head of research, John Wilson, described it for CNN “automation will drive more job losses than store closings in the next decade.”
And the bottom line should play out just as it did in manufacturing. Total output increased, but with fewer workers. That good for Wall Street and the higher ups at corporate offices, but not so good for Main Street and local economies.
It’s also bad news for women because they dominate the ranks of cashier positions, which are the most automatable jobs in the economy.
This phase of the labor force restructuring will also create some new jobs. And just like it happened in the manufacturing sector many of the newly created jobs will be of a higher quality than those they replace. But it won’t be a one-for-one trade, and the folks who get those new jobs will have to have a lot higher skills set than the retail workers that are replaced.
Retail Automation: Stranded Workers? Opportunities and risks for labor and automation.
All the talk about how retail jobs have sucked the life out of the local jobs economy is more myth than fact.
Johnson City MSA retail GDP up 29.4% – Kingsport-Bristol up 5.7% since 2001
Kingsport-Bristol, Johnson City MSA manufacturing real GDP better than it was in 2001 with a lot fewer employees
Tri-Cities business pattern shows retail trade, construction firms biggest losses since recession