The real price of those great holiday bargains

Posted Wednesday, Dec. 04, 2013  comments  Print Reprints
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The most important website last weekend and in weeks to come — on which the hopes and fears of countless Americans are focused (and the president’s poll ratings depend) — is not HealthCare.gov. It’s Amazon.com.

Even if and when HealthCare.gov works perfectly, relatively few Americans will be affected by it. Only 5 percent of us are in the private health-insurance market to begin with.

But almost half of Americans are shopping for great holiday deals online, and many will be profoundly affected — not because they get great deals, but because their jobs and incomes are at stake.

Online retailing is the future. Amazon is the main online shopping portal this holiday season, but traditional retailers are moving online as fast as they can. Online sales are already up 20 percent over last year, and the pace will only accelerate.

Target and many other bricks-and-mortar outlets plan to spend more on technology next year than on building and upgrading new stores.

Americans are getting great deals online, and they like the convenience. But there’s a hidden price: With the growth of online retailing, fewer Americans will have jobs in bricks-and-mortar retail stores.

Retail jobs have been the fastest-growing of all job categories since the recession ended in 2009. But given the rapid growth of online retailing, that trend can’t possibly last.

What will Americans do when online sales take over?

Add to this the fact that most of what’s being sold this holiday season — online and offline — is no longer made by Americans. Vast shipping containers of gadgets, garments and other goodies are fabricated or assembled or sewed together in Asia for the American market.

Online retailers are facilitating this move by having these goods shipped directly from Asian factories to distribution centers in America and then to our homes, without consumers ever having to go to an American retail store or even a wholesaler.

This means even lower prices and better deals. But it also means fewer jobs and lower pay for many Americans.

Some manufacturing is coming back to America, but not the assembly-line jobs that used to be the core of manufacturing employment. Computerized machine tools and robots are doing an increasing portion of the work — which is why many companies can afford to bring their factories back here.

Get it? Technology and globalization are driving the good deals American consumers are getting this holiday season. But the same forces are keeping wages down and are even on the verge of eliminating many of the low-wage retail and related service jobs many Americans need to make ends meet.

To put it another way, American consumers getting great shopping deals are also American workers on the losing end of those same deals.

Median household income in America continues to drop, adjusted for inflation, because low-wage jobs are the major ones available.

Lower-wage occupations accounted for only 21 percent of job losses during the Great Recession. They’ve accounted for 58 percent of all job growth since then.

Technology and globalization are taking over more and more American jobs. There’s no easy fix for this, and it’s hardly the president’s fault. But the sobering reality is that the United States has no national strategy for creating more good jobs in America.

Until we do, more and more Americans will be chasing great deals that come largely at their own expense.

Robert Reich, former U.S. secretary of labor, is professor of public policy at the University of California at Berkeley. www.robertreich.org

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