Robert Reich: 'While Amazon adds 5,000 warehouse jobs it destroys 50,000 retail jobs.'

[onehandle]

Last edited Tue Jul 30, 2013, 12:40 PM - Edit history (2)

'Progress on jobs front? While Amazon adds 5,000 warehouse jobs it destroys 50,000 retail jobs.'

https://twitter.com/RBReich/status/362010641613066243

On edit: He's talking about the Walmart effect.

Walmart has been killing small businesses for decades, by consolidating shopping and low paying jobs in one big building.

Amazon is finishing the job of killing locally owned businesses.


Amazon spent almost three million dollars lobbying Congress last year. Boehner's teabagger Congress.

[Lizzie Poppet]

1. For better or worse, brick-and-mortar retail is destined to shrink.

I very much doubt it will disappear entirely, but it is giving ground to online sales. I use Amazon for certain types of purchases like lightweight, cheap-to-ship electronics and such. Never for books, as I live a few blocks from Powell's (duh...), but for the sort of gadgety stuff you'd look to a big box for. Picking one soulless corporation over another, basically...but it's really hard to find mom-and-pop stores that have those things any more. Which is part of Reich's point, really...

[bunnies]

2. Is there an actual article that goes with this?

I cant seem to find one.

[onehandle]

4. He's talking about the Walmart effect.

Walmart has been killing small businesses for decades, by consolidating shopping and low paying jobs in one big building.

Amazon is finishing the job.

[bunnies]

6. What if Amazon kills Wal-Mart?

Kinda sweet irony there.

[BlueStreak]

55. It is happening already, to a degree

Yes, it is ironic. Wal*Mart used to operate smallish stores in mostly rural areas that were not already covered by K-Mars, Sears, etc. That also happened to be in their "Made in America is good" phase. But since then, they have been driven by nothing but clinical efficiency. They keep making the boxes bigger and keep squeezing employees and suppliers harder and harder. They really have reached the breaking point. They could remain at this level, except for the Amazon factor.

Amazon senses this opportunity and that is why they are back into the same "grow now, worry about profits later" mode as when they started in the late 1990s.

They have already crushed the bookstore industry and they are well on their way to crushing Wal*Mart. But we should recognize that the Amazon customer is not exactly the Wal*Mart demographic. For one thing, you do need a credit or debit card -- i.e. some banking support. So Wal*Mart is in a spot. They really don't have much room for growth, other than in the lower demographic (and CostCo is hammering away at the higher demographic Wal*Mart customers.)

About the only good to say for Amazon is that they do have a marketing model that includes independent businesses, so they haven't crushed every little business along the way. And then there is NewEgg, which is following the Amazon model and growing quickly.

[BumRushDaShow]

9. Amazon made a hiring announcement

ahead of the President's visit to Tennessee where Amazon wants to expand distribution.

http://abcnews.go.com/Technology/amazon-announces-7000-jobs-ahead-president-obamas-warehouse/story?id=19802895

And Reich is truly being Reich pointing out this type of online business model's impact on the local cottage industry.

[bunnies]

11. Thanks.

I was just really curious to know how he arrived at that figure and where exactly the jobs were coming from. I only use amazon for things I cant find anywhere close to me. But then again, there are very few locally owned shops around me anymore. OTOH, If Amazon is taking jobs from wal-mart, I couldnt care less.

edit: clarity

[onehandle]

13. There are hundreds of locally owned businesses between me and the closest Walmart.

Amazon is not taking jobs from Walmart, they are assisting Walmart in killing small business.

Dunno where you live. Is there nothing but a bunch of empty businesses and a Walmart near you?

[BumRushDaShow]

30. Most of the stuff that I get IS from small businesses

Amazon will indicate that the item is "fulfilled by" say, "Blah blah Corner Store" in Wooha, CA, and when I get delivery, I usually have a handwritten thank you note from the store owner right there on the invoice.

The reason why I use them is because I have spent countless hours slogging through local stores and malls looking for certain items, in certain sizes, colors, etc., and it's just not available.

Most of the department stores around here are gone (and that happened way before the web came into existence, let alone when Amazon appeared). Walmart moved in after multiple recessions took out discount mini-chains like Woolworth's, Clover, & Caldor. I avoid Walmart.

The sad reality is, supermarkets replaced the butchers, fish mongers, many bakeries, fruit stands, and even the milkman (that I remember delivered milk and butter to my household when I was young), etc., so this is nothing new.

[Mojorabbit]

41. I get a lot of my stuff from small businesses who sell thru Amazon.

It is hard to pick through this information to find out exactly how they are figuring the numbers out.

[bunnies]

45. Lots of bars and restaurants where I live.

Other than that we have a wine shop, an organic yarn shop, a hallmarky type shop, a couple gently-used clothing boutiques, a new-age metaphysical shop, two barbers, a few salons, a high-end kids toy shop, a couple of gyms, a yoga studio, a used book store, two hardware stores, a hobby shop, a junk shop, and a couple beer and cigarette stores, a smoke shop, 3 or 4 tattoo parlors, several jewelry shops and one small local grocery store. Oh, and a paint store. We used to have a photography store too but...

Because we have mostly food places, we dont have a lot of empty stores downtown. The strip malls a little way up the road are a different story. Wal-Mart is less than 5 miles from where I live, and two towns over from me is a barren downtown.

[BumRushDaShow]

16. Agree about Walmart!

The downside is Amazon and unions and that is a valid point, although there is heavy pushback going on worldwide. One could argue that most Mom and Pop stores aren't unionized either so IMHO it's 6 on one side, half a dozen on the other.

[frazzled]

23. But they're not saying what salary & benefits are attached to these "jobs"

I should assume it's hardly a great wage or benefit offering. This is not an answer to income inequality in America. These are low-level minimum subsistence jobs.

I use Amazon as little as possible. I used to order my printer toner from them, because it was considerably cheaper. But it meant that if I did not want to wait 5-7 days for the standard shipping, I'd have to pay a fee which made the savings less attractive. Last time the printer toner went kaput, with little warning, we used a $15 coupon we had from Office Depot, got the toner the same day (I was in the middle of a project and needed it), and the price difference was minimal.

Lately, I've noticed that companies are catching up to Amazon: I always do research before I buy something, and often find I can get a better sale price on an item from a store or from the company that manufactures the product itself.

For books ... well, I'm lucky to live in a city that has an excellent independent bookstore. It has to be really arcane or unavailable for me to order it from Amazon.

I do on rare occasion use the "My Habit," a fashion/home decor sale site connected to Amazon. But quite rarely. Mostly when I have to get a present and don't want to go out and shop. Recently, I bought a baby present at considerable sale price, from a US maker (a California brand). Adorable little outfit that would have cost $95 in a store, which I got on sale for $32. I hate shopping for children's gifts (as much as I used to love it.)

I often use Amazon for research on products, but buy elsewhere, either in store or directly from a manufacturer. I almost never buy myself clothing online. I just need to feel the fabric and try it on.

[GreenStormCloud]

50. Amazon also gives local cottage industries a national outlet. N/T

[snappyturtle]

56. Absolutely! I've read of small shops who have had to close

for a variety of reasons. One being, Walmart coming into their town.
Soooo, they became a vendor on Amazon. Now have built small
warehouses and hired workers to process orders, and do packaging
and shipping details. Walmart does not let independents sell through
their website to my knowledge.

edit: And, like you say, some with store fronts still intact have
expanded sales with their geographic reach.

[MADem]

3. I suppose I am part of the problem. I use Amazon a lot.

It's just convenient. I use them, and I use the "marketplace" which is great for finding strange stuff that one can't get in a local store.

If my local retailer would deliver stuff to my door -- heavy stuff, oddball stuff, stuff I use on a recurring basis--then I'd use them, but they don't.

I have to stop what I am doing, leave my home, get into my car, burn gasoline, find a place to park, tromp up and down aisles, maybe/maybe not find what I am looking for (even if I have called ahead) and wait in line to check out.

When I am in a remote location, it's especially convenient. I won't stop using them unless retailers can compete with them--it's the new paradigm for a lot of situations.

I'll put on my flameproof suit and wait for the angry barbs, but that's the honest truth. And if I am willing to pipe up and admit it, you've got to figure I'm not the only one.

[BumRushDaShow]

12. I am also a big user BUT

the one thing that I rarely see mentioned here is that I have been able to support many many small businesses (whether they directly participate through Amazon's site or are pointed to from Amazon), that may offer products that I can never find around here and that don't have the level of sales locally, but can get sales nationally.

Amazon is basically a centralized electronic mail order service and yup, they get their cut for managing the transactions. However oncce I get a good product from a participating business, I often go back to that business directly vs using Amazon (if they have their own website).

[enough]

21. I've wondered about this. I live in a rural suburban neighborhood with a not very

diverse set of retail establishments. Through Amazon I am able to buy things I could never get locally, all sorts of things including ethnic cooking ingredients, odd specialized gear, etc etc etc. So it seems to me it is a benefit to those small specialized businesses that can expand beyond their local markets, besides being a benefit to me.

And like you, I often deal with the business directly once I have made the contact through Amazon.

[ecstatic]

15. +1.

As someone who hates shopping, Amazon has been a godsend. Can't beat the 2 day shipping or 1 day shipping for an extra $3.99.

Also, I don't use local stores as showrooms prior to making a purchase--sometimes I'll actually pay extra to buy on Amazon because I do not want to step foot in the disorganized, poorly managed stores in my area.

[spin]

22. Often the people who work in the Big Box stores have little knowledge...

on the products they sell and could care less. I often get the feeling that when I ask them a question they consider me to be a pain in the butt.

I can look at a product on Amazon.com and read the reviews and have a better chance of picking the item I want than if I went to a Big Box store.

[tabbycat31]

20. I use Amazon a lot too

More than I should, but I am a Prime user and will take advantage of their free shipping. I've bought both big (iPod, Kindle Fire) and small ticket items there. And I'll be honest about books, with my travel schedule (currently on the road through 1/31) it's much easier to read on my Kindle than to pack a suitcase of books. (I use the public library and the Kindle lending library, as well as download freebies).

The one thing I won't buy on Amazon is clothes. I prefer to buy those in person and try them on.

[spin]

24. I buy both clothes and groceries from Amazon. ...

I have never had to return any of the clothes.

[SoCalDem]

28. I use them as well, because I like finding EXACTLY what I am looking for

and being able to compare prices from a variety of places...and having items delivered to me. I also sometimes get the urge to shop at 4AM.

Modernity has just changed commerce forever.

I also DO support local merchants whenever I can, and never shop at big boxes, and we avoid chain restaurants 99.999% of the time.

Before online shopping, I wasted so much time just looking for things (and usually not finding them)..or if I did, it was the wrong size/color etc.

Except for a small number of places, most cities have pretty much been "converted" to four types of "shopping" :

1....malls where every store is a clone of every other store in every nearby (and far away) mall
2....big boxes...(see #1)
3....99cent stores with Chinese junk & off-brand/nearly expired stuff
4...expensive stand-alone boutiques with low choice & high prices

This did not happen overnight, but it has happened, and unless we choose to pay more, drive more, settle for less than what we like or want, this how we now shop.

My recent shopping for my granddaughter is a prime example.
We live in CA, and she lives in WA.

With Amazon & ebay, I have sent a HUGE amount of stuff for her ..

organic/unbleached Egyptian cotton diapers from Vermont
diapers from Kansas, Iowa, Georgia
cute new outfits from all over the US (via ebay)
even a precious stuffed doll from the UK

In the last few weeks I have pretty much set them up for her clothing & diapering needs for the foreseeable future, and have done it from my home office in the wee hours of the night.

When she was born, I sent them a gorgeous birch dresser/changing table..ordered from Georgia & sent directly to them..sight unseen by me..

[NYC Liberal]

48. I completely agree.

[tanyev]

61. Me, too.

It's especially convenient for me to get stuff for my mom, who lives several hours away in a very small town. There are so many things Mom cannot purchase in her little town and she is not able to do the driving or walking it would take to go to the nearest large city. A few clicks on my computer, and I can have whatever she needs delivered to her door.

[ananda]

5. I use Amazon now and then, but not that often.

If I shop online, I search for the best price without sales tax or shipping costs.
So often, if I see something I want on Amazon, I can find
it cheaper somewhere else.

But every so often I will buy it from Amazon, depending.

I think we will still need walkin stores to some extent, though, especially
for trying on stuff and looking at the quality of food items and the
actual size of products, stuff like that.

Today I checked for an item online to see which kind I wanted, and then
went to the local store to purchase it. I did that last night with getting
my new cable modem, so I don't have to pay the modem lease fee.
That was a lot easier than I thought it would be, too.

[joeglow3]

7. And Reich likes to reap those benefits

http://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Daps&field-keywords=reich#/ref=nb_sb_noss_1?url=search-alias%3Daps&field-keywords=robert+reich&rh=i%3Aaps%2Ck%3Arobert+reich

[pnwmom]

27. That's unfair. Publishers don't give you a choice whether you're on Amazon or not. n/t

[Nye Bevan]

29. Nobody is forced to publish their book on Kindle (nt)

[pnwmom]

35. If you want to be published by a major publisher you don't have a choice.

They decide how to distribute the book -- you don't.

I'd rather his message be out there to be read by the largest number of people.

[Nye Bevan]

38. If he feels so strongly that Amazon is evil,

he can easily find a publisher that will agree not to publish his work on Kindle.

[pnwmom]

42. He's not an impractical purist. He wants his overall message to be seen by

as many people as possible.

And you have no idea whether a publisher would agree to take on his dry, fact-filled book on any terms that would limit its distribution.

[joeglow3]

46. Bullshit. Look at Wheel Of Time

All books were eventually released on Kindle, but severly delayed after the print form. You most certainly do NOT have to put it out on Kindle.

[pnwmom]

47. That's the call of the publisher, unless you're an author with a name like J.K. Rowling. nt

[exboyfil]

8. Two things at a minimum must change

1. Amazon purchases must be taxed at the state and local sales tax rate where the product is delivered or, in the case of large purchases were using a low tax state as a drop is beneficial, the residency of the purchaser. This should apply to all internet purchases.

2. USPS should closely look at its relationship with FedEx and UPS for final door delivery in rural areas. Are they pricing this service high enough to justify how it undercuts the rest of their business model.

Any other unfair advantages does Amazon have? You obviously have more delivery people (USPS, UPS, FedEx) related to this business model and that helps with the labor difference.

Other possibilities - Are all the externalities of a delivery modeled in the price (additional packaging destruction of trees and disposal, additional energy usage (not sure if this is the case).

Just because it is a more efficient model than brick and mortar should not exclude it from use to save jobs. How far does a willingness extend to reduce efficiency to help jobs? I would prefer we consider things like tariffs for imported goods/services first before attacking the Amazon business model.

[spin]

17. The big difference between UPS and FedEx and USPS is that UPS and FedEx are reliable. ...

If I place an order with Amazon, UPS or FedEx will deliver in it two days. USPS will take 3 days and sometimes returns the item as undeliverable because of an incorrect address. This has always amazed me as the address is correct and they have been delivering mail and shipments to my door for 6 years.

Also UPS and FedEx do a far better job of tracking my packages than USPS.

[pnwmom]

31. No, the big difference is COST.

The USPS charges the same thing to send a package anywhere in the US, so the large urban centers are actually subsidizing the small rural areas. (Which I think is good -- and I also agree with a stamp costing the same to go anywhere.)

I'm used to sending things by UPS from one large metro area to another, so I was shocked the first time I had to send a package to my son in a more isolated college town. UPS wanted to charge me over $50. So I went to the USPS and the rate for the same two day guarantee was only $18 -- because the cost was the same wherever it went. The USPS doesn't charge a premium for the smaller locations.

UPS and Fedex are fine if you're in a big city or nearby suburb; USPS is much more economical if you're shipping to or from a more isolated town.

[spin]

39. Interesting. I rarely ship items. I just receive them. (n/t)

[GreenStormCloud]

10. Amazon creates more jobs than it eliminates.

Last edited Tue Jul 30, 2013, 02:27 PM - Edit history (1)

Amazon is not one big online store. Thousands of small stores have space on Amazon. Many of them sell only online and are doing well because the sell a specialty item that would not be profitable if sold in a brick & mortar store. Those are business (and jobs) that would not exist without Amazon. Many of those businesses are Mom & Pop outfits.

Further, Amazon is a great benefit to the people who use it. I can find hard to find stuff without driving all over Dallas and still not finding it. A few keystrokes and mouse clicks and it is on the way.

I get to read the experiences that other purchasers of the product have had. Sometimes I have been warned off of a bad product by other's experiences. You don't get that in a B & M store.

Reich is just a luddite.

[spin]

18. That's an excellent point that I hadn't considered before. Thanks ...

Now I feel better about shopping at Amazon.com.

[Safetykitten]

25. Yes, high quality jobs. Why not take all the propaganda. Also, the working...

conditions are fantastic!

[Myrina]

54. Don't forget the generous salaries and benefits ...

n/t

[spin]

14. I have to drive 36 miles round trip to the nearest big box store. ...

which is a Walmart.

I can order higher quality items at a lower price and have them show up at my door in two days often for no charge from Amazon.

Amazon offers me a wider choice than any local stores and they have excellent service.

I happen to love Matouks Hot Sauce from Trinidad but even in Tampa I could never find it in the stores. Amazon has it. (In passing this sauce is very hot but has an excellent flavor.) I happen to like Lapsang Souchong Tea ( Tea for strong coffee lovers). Try finding that in a grocery store in North Florida. Amazon has it. My son in law enjoys flying R/C Helicopters. Guess who has the best selection from small to large. If I want to buy a new pair of shoes for exercise, I just log into Amazon and pick what I want and two days later I have it.

If I want to buy a laptop computer or a Flat screen TV I don't have to travel 70 miles round trip to a Best Buy to get a top rated product.

If I have a problem with an order i just log on Amazon.com and enter my phone number. Within seconds my phone rings and I am connected to a representative who speaks English, is from the U.S. and will bend over backward to insure that they resolve my problem.

I understand that Amazon is taking away jobs but times change. The Big Box stores like Walmart ruined jobs for many people who worked in small local businesses but now they face stiff competition from Amazon.

I'm not sure what I should do. Should I drive 36 miles to and from Walmart (a store I intensely dislike) to buy a new kitchen blender or should I order a better one from Amazon and wait two days for it to show up at my door?

The choice is somewhat like asking if I should shoot myself in the right foot or the left foot.

[Safetykitten]

19. But EVERYONE loves working in sweatshop part-time soul crushing no-benefits jobs!

As long as I get my stuff! Oh by the way, I support the McDonald's people getting more money.

Too hot? No problem!
http://www.huffingtonpost.com/2012/05/25/amazon-working-conditions-warehouses_n_1545599.html

http://thenextweb.com/insider/2011/09/21/amazon-responds-to-complaints-about-poor-working-conditions-in-warehouses/

General suckiness

http://www.businessinsider.com/working-conditions-at-an-amazon-warehouse-2013-2

[KurtNYC]

26. Video kills radio star. Ford destroys horse and buggy business.

All those people who used to make answering machines were put out of work by voicemail....

How can Reich blame Amazon for staying current ?

[onehandle]

32. Please post your job and place of employment.

I'm sure there's someone, somewhere out there with a cheaper more 'current' methodology, that can take your place.

[JoePhilly]

36. Which is why one needs to make sure they keep their skills up to date and

relevant.

[KurtNYC]

40. The path to more jobs for Americans isn't a U-turn

[JoePhilly]

33. Exactly.

[BumRushDaShow]

43. That's basically it in a nutshell. nt

[moondust]

51. Not all change is for the better.

Some would argue that allowing corporations and stock markets to exist in the first place was a change for the worse in the long run.

With so much downward pressure on wages and long hours spent at more than one job, it's no wonder that the convenience and relatively low prices of one-stop shopping at Wal-Mart and Amazon are attractive to many who may be just trying to keep their head above water.

[Nye Bevan]

34. Amazon is *great* for the environment.

Compare the emissions of:

1. a single UPS truck driving through a town, delivering 30 packages;

and

2. Thirty people in a town get into their cars, drive to the mall, buy their stuff, and then drive home.

[leftstreet]

49. Get your sweatshop goods shipped eco-friendly!

[MADem]

53. I don't buy sweatshop goods from Amazon.

Most of the stuff I get from them is made in USA, actually.

[lynne]

37. Sometimes progress isn't pretty -

- but it's going to happen. We can either prepare for it or scream about it. Either way, we're not going to stop it.

I use Amazon all the time, especially at Christmas. On the plus side, I'm not using gas or my automobile so it's environmentally friendly to shop via the internet. However, I also shop online at brick and mortar stores such as J. C. Penney, Sears, Best Buy, and pick up my online purchase at the store to avoid shipping charges.

I would imagine that the brick and mortar stores will eventually be reduced in number and size. Other jobs - especially in the tech departments - of these stores will become available as they shift how they do business.

My great-uncle trained horses for the U. S. Cavalry. He was put out of a job by the invention of the automobile, as was my great-grandfather, who was a wheelwright.

[Tommy_Carcetti]

44. Maybe I'm just backwards, but I only buy online when it's the last resort.

If something is available at a store near me and I can actually physically purchase the product, I always prefer to get it in person.

Call me a sucker for human interaction.

[Myrina]

52. What a Coinkydink that POTUS is at Amazon in TN today ...

Touting 'jobs for the middle class', no doubt.

[Bake]

57. But they're also keeping UPS busy ...

And those are jobs as well. Not as many, I'm sure, as the local brick and mortar retailers, but there's more than just the warehouse jobs.

Bake

[BainsBane]

58. To be accurate, it's we the consumers who destroy those jobs

by buying from Amazon rather than local businesses. Keep that in mind. If you want local business to thrive, you need to spend your money there.

[lynne]

62. Doing a website with an online store isn't all that difficult or expensive -

- in this day and age. If a local business wishes to stay competitive with Amazon and get a piece of internet business, they need to get a web store and market it locally. If they don't, they're putting their own selves out of business.

Internet shopping is here to stay. Stores can either adjust to it or die. That's the reality.

[allin99]

59. Wow. i never thought of it like that. i buy from them..

allllll the time cuz everything is cheaper, but that really is the same as walmart.

I'll try to buy more locally, as in, right in my neighborhood. Totally never thought of that.

[Puzzledtraveller]

60. solution?

[Octafish]

63. K&R for Truth Tellers

Book stores have gone the way of mass media: Concentrate until only one source remains.