Realist, not conformist analysis of the latest financial, business and political news

Amazon’s Making Us Richer By 140,000 Jobs Just This Past Year

The correct way to read this story is to marvel at how Amazon is making us richer by 140,000 jobs in just the one year. That’s using “Amazon” as shorthand for online shopping. And as sure as eggs is eggs the people attempting to run our society are reading the very same story the wrong way – that we’ve a problem with the very same events:

UK high streets have shed more than 140,000 jobs this year as store closures and retail failures made 2019 one of the most challenging years in a generation.

More than 2,750 jobs were lost every week, according to a detailed analysis by the Centre for Retail Research (CRR) published today. It predicts the picture will worsen in 2020, unless the government intervenes, with high business rates one of the factors blamed for accelerating chain store closures.

Prof Joshua Bamfield, the CRR’s director, said retail was in crisis owing to high costs, low levels of profitability and sales moving online.

“These problems are felt by most businesses operating from physical stores in high streets or shopping malls,” Bamfield said. “The low growth in consumer spending since 2015 has meant that the growth in online sales has come at the expense of the high street.”

Losing jobs is bad, we must intervene to stop this process. Plus, as always, that dig at business rates which are actually a tax upon landlords, not tenants.

And now, take a deep breath and start to actually think.

So, what is it that makes us richer? Having more stuff – whether goods or services – to consume. By definition that’s what makes us wealthier, richer, as being able to consume more is to become richer, wealthier.

OK. So, imagine we get our retail services through the labour of 1 million people. Just to invent a number. Then we change the technology we use and gain our retail services from the use of the labour of 860,000 people? Which is the claim being made above.

We are now richer, obviously. Unemployment is at generational lows so those 140,000 surplus to retail requirements are off doing something else. We are able to consume both our desired retail services and also whatever it is that the 140,000 are now producing. We’re richer.

Why is this a problem that we’d like to solve? Rather than a welcome development that we should luxuriate in?

The base point here being of course that jobs are a cost of doing something, not a benefit. And the art and aim of economic advance is to be destroying jobs where and when we can.

Further, until those who purport to rule us grasp this simple point we’re not going to be ruled well, are we?

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4 years ago

Jobs are sought after by politicians because politicians thrive by promising the voter he can stay at that same desk and pull that same lever forever.

Amazon would have done some hiring to counteract that job loss, surely not fully, and it is a productivity increase. But the end-user job being done isn’t the same, either. Shoppers are being spared trips to the High Street or shopping mall to SEE IF a product is in stock and maybe return home empty-handed.

4 years ago

Actually, I think it’s entirely possible that Amazon has increased employment, using more than the 140k displaced workers. But at the end of the day, consumers are choosing freely to change how they buy things, which is a glorious thing in its own right. Laissez faire

4 years ago

Surely 140,000 people not stacking shelves is 140,000 more nurses in the saintly NHS. Isn’t that what people want?

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