Sunday afternoon my wife I returned home (after church, lunch and shopping) to find a package on our front porch: my wife’s on-line order earned Sunday delivery from the United States Postal Service.
To get business from Amazon and friends, letter carriers now deliver Priority Mail parcels seven days a week in many areas. Oh, my friends in DeSoto, MO (63020) can’t get Sunday delivery, nor can people in St. Ann (63074) but nationwide the list of eligible Zip Codes runs 32 pages [ https://ribbs.usps.gov/expressmaildel/documents/tech_guides/PriorityMailExpressSundayHolidayDelivery.pdf ] .
Also, to attract packages, the post office subsidizes those deliveries by overcharging for First Class mail. By one analysis, Amazon gets a $1.46 subsidy per delivery. [ http://postalnews.com/blog/2017/07/14/analyst-claims-usps-is-subsidizing-amazon/ ] .
President Donald Trump argues that government shouldn’t pick ‘winners and losers’ [ https://twitter.com/realdonaldtrump/status/613022549824405504], yet under his “leadership” the post office strikes more deals with on-line retailers.
Remember I mentioned shopping on Sunday?
We visited our local K Mart, searching for a replacement for the water-tight “tub” I fill with charcoal, wood chips, and such on our deck: they didn’t have any. Walking about the store that didn’t surprise me. In cosmetics they had racks for lipsticks with no product in any of the slots. The pharmacy and snack bar are gone, large areas of shelves have merchandise spread-out, one item deep, to give the appearance of an inventory. All over the store buckets or plastic sheeting hung from the ceiling catch rain water.
K Mart – aka Sears Holdings – isn’t alone. This spring Moody’s posted a gloomy outlook for many retailers, including Nordstrom and Eddie Bauer and noted that Macy’s, J C Penney and many other chains are closing stores this year [ https://www.usatoday.com/story/money/2017/06/09/moodys-number-distressed-retailers-tops-total-during-financial-crisis/102626866/ ].
Nationwide, the Bureau of Labor Statistics reports the net loss of 5,000 retail jobs a month this year [ https://www.bls.gov/careeroutlook/2014/article/retail-trade.htm ] but that number is skewed by the growing subcategory – “nonstore” retail jobs…As in Amazon.
Why does this matter?
Well, drive east from the Missouri River on I-64 and look at the tremendous investment in outlet malls, strip malls and big-box stores built on the flood plain. Chesterfield alone filled dump trucks with tax abatements and subsidizes to lure retail to the valley. Other municipalities play the same game.
Besides that tax payer investment, retail sales represented a growing slice of the total employment in this region. St. Louis Community College, in a report put together with friends from the St. Louis Federal Reserve Bank, noted that “Our local economy is driven largely by personal consumption and personal services” [ State of St. Louis Workforce 2017 p. 3 at www.stlcc.edu ] Their summary chart [p. 10] finds that 10% of all employment in the region is in the Retail Trade.
The world of retail has entered a period of enormous transformation. With broad retail market growth at a pace of three percent annually, many retailers are finding themselves in an uphill battle to profitably expand growth and market share. Global market forces and combined with an ever-increasing proliferation of retail purchase channels…have resulted in elevated in expectations on the part of many consumers.
Click to access us-cb-retail-distribution-outlook-2017.pdf
In other words, shoppers would rather shop on-line and let their letter carrier delivery the goods. With the total retail market growing slowly, on-line sellers take money out of traditional store registers – meaning fewer retail jobs here in St. Louis.
Where will these former retail workers go? Well, Amazon is hiring about 300 part-timers for Hazelwood. [ http://fox2now.com/2017/07/27/amazon-looking-to-hire-over-300-workers-in-hazelwood/ ]
The remaining thousands of retail clerks becoming unemployed are pretty much on their own.
Stay tuned.
Submitted by Glenn Koenen, WCD Member