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The Link Between E-Commerce and Warehousing Jobs

July 10, 2017 by Joshua Wright

The other day The New York Times published a series of charts on the growth of e-commerce jobs and the stagnation of retail jobs. The NYT piece had several eye-catching visualizations and noteworthy data points, but it had one glaring omission. It made no mention of general warehousing jobs that have erupted because of the many new Amazon fulfillment and distribution centers.

Michael Mandel of the Progressive Policy Institute has been at the forefront of e-commerce (or is it “ecommerce”?) research over the last several years. He raised the same concern on Twitter that I had after reading the NYT’s chart-driven article.

NYT graphics on ecommerce jobs completely ignores the impact of distribution centers.

— Michael Mandel (@MichaelMandel) July 7, 2017

In March, Mandel and PPI published a paper that contended that general warehousing and storage (NAICS 49311) should be included when defining the e-commerce sector, since it “apparently contains the bulk of fulfillment centers and similar establishments.”

I was unsure about this at first. After all, the general warehousing and storage industry employed 813,240 jobs in 2016, according to the latest QCEW data from the BLS. Amazon is a behemoth, but not all of these warehousing jobs are in fulfillment centers. As Mandel told me on Twitter, however, he’s found that the change in general warehousing jobs is strongly correlated with Amazon employment by state.

In other words, a good part of the growth in general warehousing seems to be tied to Amazon swallowing up any and all warehousing space it can. Walmart is also a gigantic distribution player, of course.

E-commerce is less labor-intensive than brick-and-mortar retail, a point that the NYT made clear. But general warehousing added just under 100,000 jobs from 2015 to 2016, per annual average employment data from QCEW. That’s a 14% jump in one year.

And when you lump at least some of the 800K-plus jobs in general warehousing with electronic shopping (which employed 230,000 in 2016), e-commerce becomes a much more formidable sector than is typically portrayed.

It’s also a better-paying sector than retail. From Mandel again:

For example, production and nonsupervisory workers in the ecommerce sector, including fulfillment centers, earned an average of $17.41 per hour in 2016, compared to $13.83 in general retail—a 26 percent premium.

This is all positive, especially if you’re as optimistic as Mandel is that retail is going through an evolution, not a revolution (i.e., some retailers are closing while others are expanding). A word of caution, though: The warehousing industry is likely to see continued automation, and metros like Riverside, Stockton, and Allentown with five to eight times the number of warehousing jobs than the national average have reason to be concerned.

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