Oct 16, 2019 - Economy & Business

A crisis for retail jobs

Outside a Target in Pembroke Pines, Florida. Photo: Joe Raedle/Getty Images

A collision of forces — automation, e-commerce and stagnating wages — is squeezing retail jobs in the U.S.

Why it matters: With more than 15 million jobs, the retail industry is America's biggest employer. A hit to this sector would reverberate across the economy.

Driving the news: Led by Amazon, several big American retailers are raising their wages to around $15 an hour. But stores are slashing workers' hours, and robots are supplanting people.

  • "Close to 30% of America's ... retail workers worked fewer than 35 hours a week last year, according to the Bureau of Labor Statistics. Nationally, 17% of workers work below 35 hours a week," reports CNN's Nathaniel Meyersohn.
  • Meyersohn spoke with current and former Target employees who said they struggled to pay rent or buy food due to shrinking workweeks.

Some jobs that have existed for decades — like taking inventory or cleaning aisles — are being automated away.

  • In April, Walmart added nearly 4,000 robots that can mop floors, unload trucks and scan shelves.

And retailers are adding part-time and temporary workers to staff the holiday rush as they cut hours for full-time employees.

  • Close to 40% of Walmart's workforce are part-timers, per CNN.
  • Target has announced plans to hire 130,000 temps for the holiday season.

The bottom line: "It's a much slower process to eliminate people than you might think," says J.P. Gownder, an expert on automation at Forrester. But in retail, "in the longer term and at scale, the economics favor automation."

Go deeper: The inexplicable decline in retail sales growth

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Why it matters: Over the past few years, experts warned of a retail apocalypse and a massacre of malls that hasn't really happened — at least not the way they said it would. While the retail bastions of the 20th century, like Sears and Macy's, are hurting, America's big malls and shopping centers are still alive and finding new ways to get people through the door.

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Why it matters: "The notion that there's gonna be a jobs apocalypse has been with us for the last decade, but the data shows that's not coming to pass," says Rob Brown, VP of Cognizant's Center for the Future of Work.

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Why it matters: The U.S. job market held up in the final month of 2019, but heads into the election year with a slowing pace of job creation and wage growth.

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