Why e-com­merce cre­ates more jobs

Mon­day, Oc­to­ber 30, 2017 Growth has re­quired new ware­houses, de­liv­ery sys­tem


When the ro­bots came to on­line re­tailer Boxed, dread came too: The fa­mil­iar fear that the ma­chines would take over, leav­ing a trail of un­em­ployed hu­mans in their wake.

Yet those fears didn’t come to pass. Rather than cut­ting jobs, the com­pany added a third shift to keep up with rapidly grow­ing de­mand.

What hap­pened at Boxed sug­gests that wide­spread fears about au­to­ma­tion and job loss are of­ten mis­placed. Au­to­ma­tion has ac­tu­ally helped cre­ate jobs in e-com­merce, rather than elim­i­nate them. By ac­cel­er­at­ing de­liv­ery times, ro­bot­ics and soft­ware have made on­line shop­ping an in­creas­ingly vi­able al­ter­na­tive to bricks-and­mor­tar stores, and sales have bal­looned at on­line re­tail­ers.

The surge in e-com­merce has re­quired the rapid build­out of a vast net­work of ware­houses and de­liv­ery sys­tems that in­clude both ro­bots and human work­ers. Even if the ro­bots re­place some peo­ple in each ware­house, the pro­lif­er­a­tion of new ware­houses should still gen­er­ate hiring for years to come.

Jobs have been lost at store­front re­tail­ers, which have suf­fered un­der the e-com­merce on­slaught. But wor­ries about a “re­tail apoc­a­lypse’’ wip­ing out many of the na­tion’s 16 mil­lion re­tail jobs have missed a more im­por­tant trend: E-com­merce ac­tu­ally leads to more jobs by pay­ing peo­ple to do things we used to do our­selves.

When peo­ple shop on­line, tasks that con­sumers once did — driv­ing to a store, search­ing through aisles for a prod­uct, bring­ing it to a cashier and pay­ing for it — are now done by ware­house em­ploy­ees and truck driv­ers. Michael Man­del, an economist at the Pro­gres­sive Pol­icy In­sti­tute, cal­cu­lates that the num­ber of e-com­merce and ware­hous­ing jobs has leapt by 400,000 in the past decade, eas­ily off­set­ting the loss of 140,000 brickand-mor­tar re­tail jobs.

Ama­zon ac­counts for much of the ad­di­tional em­ploy­ment. Yet it’s also at the van­guard of au­to­ma­tion. Since 2014, Ama­zon has de­ployed 100,000 ro­bots in 25 ware­houses world­wide. At the same time, it’s nearly tripled its hourly work­force, from roughly 45,000 to nearly 125,000.

On­line gro­cery shop­ping is also cre­at­ing more jobs. Wal­mart is ex­pand­ing its on­line gro­cery pickup ser­vice to 2,000 stores, dou­ble the 1,000 where it is now avail­able. The com­pany has cre­ated a new class of work­ers — “per­sonal shop­pers” — to fill all the or­ders.

All these trends have been helped by au­to­ma­tion’s abil­ity to hold down costs.

And even with au­to­ma­tion, there are still jobs at all ware­houses for peo­ple to do.

Bar­bara Ward, 56, is a packer at Boxed, and like all her col­leagues, she writes a thankyou note for each or­der she pack­ages.

At Ama­zon’s ware­house, em­ploy­ees called “stow­ers” are needed to stock the shelves that are car­ried by ro­bots. And that re­quires human judg­ment: Soft­ware sug­gests to work­ers where each item should be placed. But it’s an em­ployee’s re­spon­si­bil­ity to make sure the shelves re­main bal­anced.

Cranes crowd the Mon­treal sky­line as a strong econ­omy and po­lit­i­cal sta­bil­ity are fu­elling a con­struc­tion frenzy through­out the down­town core and be­yond. Although tame by Toronto and Van­cou­ver stan­dards, de­vel­op­ers in Canada’s sec­ond-largest city are in­vest­ing bil­lions of dol­lars in new con­do­minium and of­fice com­plexes, along with retrofitting older build­ings. Mayor De­nis Coderre said, “there is right now 150 cranes rep­re­sent­ing $25 bil­lion of in­vest­ment in Mon­treal.’’ He said rel­a­tively low condo prices and the lack of a for­eign buy­ers tax make Mon­treal an at­trac­tive place to in­vest.

CoN­struC­tioN boom De­vel­op­ers iN­vest­iNg iN moN­treAl

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