Job losses are not at the robotic automation companies but at the companies they are killing

The Washington Post notes that robotic warehouse automation at an eCommerce company meant more jobs with a third shift at a company called Boxed. They happily note that the robotic warehouse ecommerce company is hiring. The job losses are at the companies the ecommerce companies are killing.

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 brick-and-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.

Its use of robotics has shaved the operating costs for a warehouse by about 20 percent, according to a report by Deutsche Bank. Such savings, in turn, have lowered the cost for Amazon to open new facilities—and hire more workers.

It would seem though that if Amazon and the like swallow retail then going from $200,000-400,000 of sales per employee to $1.4 million in sales per employee will mean job losses. It will just take a while. Other retailers get less profitable per employee and then they go out of business and there will be less hiring at the ecommerce companies overall.

The National Retail Foundation expected that online retail would grow 8-12% in 2017, up to three times higher than the growth rate of the wider industry. This suggests e-commerce sales are poised to fall between $427 billion and $443 billion, based on Census Bureau data. That’s right on target with BI Intelligence’s $436 billion US e-commerce estimate. For context, brick-and-mortar retail, which still comprises the vast majority of sales, is expected to grow at just 2.8%, slower than the average rate of growth for the overall industry.

Between 2001 and 2016, jobs at traditional department stores fell 46%, according to Labor Department data.

By Ocotber 2017, there have been more store closings announced in 2017 than any other year on record. Since January 1, retailers have announced plans to shutter more than 6,700 stores in the U.S., according to Fung Global Retail & Technology, a retail think tank. That beats the previous all-time high of 6,163 store closings, which hit in 2008 amid the financial meltdown, according to Credit Suisse (CS).

Dollar General makes $350,000 in sales per employee.

Payless Shoesources makes $235000 in sales per employee.

Radio shack had about $127000 in sales per employee.

Amazon makes $1.38 million per employee.

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