via csmonitor : Situated just off Interstate 70 in Ohio’s Belmont County, between Pittsburgh and Columbus, the Ohio Valley Mall is well positioned for attracting drive-by shoppers and motorists in need of a pit stop. “We have a lot of people traveling through,” says Mark Thomas, the president of the county’s board of commissioners.
That geographical advantage hasn’t spared it from a wave of store closures, however. This year, Ohio Valley Mall has lost K-Mart, an Elder-Beerman department store, appliance dealer HHGregg, and MC Sports, a sporting goods chain that declared bankruptcy in February.
There’s some good news. The mall so far has kept both its Macy’s and its Sears, despite those two chains shuttering hundreds of stores nationwide. Replacements, including a Marshalls and a Levin Furniture, are moving in. Still, as a result, several dozen jobs in the suburban county have disappeared in the space of a few months. “We were hit pretty hard in the spring,” says Mike Schlanz, the director of Ohio Means Jobs, an occupational training and placement program in Belmont County. But he says that some of the surrounding areas, without highway access, have fared even worse.
A similar phenomenon is happening all across the country. An estimated 5,300 retail locations have closed through June 20, according to one estimate – nearly triple the rate from a year ago. That makes 2017 poised to surpass the number of closings in 2008, in the depth of the Great Recession.
Yet it’s the decline of industries like coal and manufacturing that get the big attention, especially from politicians. That’s surprising, since the closings mean that retail, which employs about 10 percent of all working Americans, is shedding jobs at a rate that dwarfs either of those. The retail sector shed 6,100 positions in June this year alone, according to the Labor Department. Since 2001, employment at department stores like Sears and JCPenney has declined 46 percent. An estimated 89,000 employees in “general merchandise” stores were laid off between October 2016 and April 2017 – more than the entire workforce of the US coal industry.
Top 10 cities for ‘gig economy’ workers
The plight of a laid-off sales clerk at Old Navy simply hasn’t resonated in quite the same way as an out-of-work coal miner or factory worker. The reasons offer some cause for hope that the economy is simply shifting in a new direction, and that many retail jobs will be replaced with other, possibly better ones. The overall job market, for instance, looks healthy and added a robust 209,000 jobs in July, according to a new Labor Department report on Aug. 4.
But there’s also reason to worry that the decline puts the most vulnerable members of the workforce at the most risk.
“I think retail has for a long time been the white noise of the economy,” says Mark Muro, the director of the Metropolitan Policy Program at Brookings. “It’s taken for granted. While they may not be glamorous, these jobs provide livelihoods for millions of people.”
A national, and local, problem
One of the unique features of retail’s jobletting is how difficult it is to see up close. It’s not a gush, like when a factory closes and puts hundreds out of work, but a slow trickle. Belmont County’s numbers illustrate the point: 11 people were laid off when HHGregg closed; 70 at K-Mart; 45 at Elder-Beerman. Mr. Thomas that says in eastern Ohio, a region that has been roiled by the collapse of coal mining and especially the steel industry, retail is “a concern, yes.” But “the coal jobs that have been lost here, steel, they’re living-wage jobs with benefits. Retail jobs more often than not are not on that level. They’re second and or supplemental jobs for some people, and unfortunately don’t come with benefits. I think that’s why you don’t see it as much discussed vis-à-vis the others.”
Indeed, service occupations, including retail, are the nation’s largest employers of low-wage workers. According to the Aspen Institute, about one-third of retail workers are part-time, and workers in that sector are about twice as likely as the workforce overall to be part-time involuntarily (they would rather be working full-time). Service jobs in clothing and shoe stores, too, are occupied primarily by women, according to the Bureau of Labor Statistics, and have higher percentages of black women than other occupations.
Optimists point out that retail may be in decline, but several other industries that employ low-wage, entry-level workers are booming, including restaurants, hotels, and the health-care field. As e-commerce continues to eat a larger and larger share of retail profits, Amazon is on a hiring spree. The company vowed in January to create 100,000 new jobs in the United States over the next 18 months, and held a massive job fair to that end this week. Plus, Mr. Schlanz at Ohio Means Jobs points out, bricks-and-mortar retail itself has always been cyclical. The Ohio Valley Mall’s shuttering K-Mart originally replaced a Montgomery Ward; the incoming Marshalls is working with his office to recruit new hires.
Location, location, location
But there’s early evidence that as the consumer economy shifts away from malls and toward e-commerce and experience-based industries, like restaurants, it will be harder for places like Belmont County, and especially more rural areas of the country, to make up for those lost jobs. Recent research from Mr. Muro’s team at Brookings, analyzing data from 2016 and the first three months of 2017, found that jobs added in e-commerce are highly concentrated in and around dense urban areas like Seattle and New York.
Lower-population metro areas, meanwhile, have experienced higher rates of bricks-and-mortar retail job loss than big cities and their surrounding metros. What’s more, e-commerce overall is still a small segment of the overall retail job picture. According to a New York Times analysis, e-commerce has gained about 178,000 jobs over the past 15 years. Department stores alone have shed nearly half a million.
What that means, Muro explains, is that the map of areas that can expect to prosper in the newly-evolved retail sector is shrinking. “Retail activity is moving online, and that means a broadly diffuse ubiquitous economic activity is going to dwindle,” he says. “More places are struggling than places are gaining.”
That includes Johnstown, Pa., about 70 miles outside Pittsburgh. Once an industrial hub, that metro area has lost an estimated 19 percent of its retail jobs since 2001. “The economy here is very fragile,” says John McGrath, a lifelong resident and marketing professor at the University of Pittsburgh at Johnstown. “Every job lost, including retail, is a precious, precious job. There’s not a lot to replace it.”
Business leaders there are seeing some potential in attracting new businesses and residents by highlighting what the area has to offer, including a low cost of living and natural resources, like miles of hiking trails and several nearby state parks. Taking advantage of a river basin nearby, a whitewater rafting park recently opened up.
“Younger, more entrepreneurial people are taking over and saying, ‘Let’s look at what can we do to make this community thrive,’ ” says Leah Spangler, who runs a network of after-school programs across central Pennsylvania.
Muro suggests that local mindset could point to a way forward if malls and big-box retail fade away. “There are all kinds of movements to brand local, eat local, buy local. I think that there will be a minority but important response that will value localness, authenticity, quality, face-to face problem solving” he says. “Main Street retail is going to have to stress its virtues, and if done well can generate real prosperity in a smaller way.”
That doesn’t mean it will be easy for areas like Johnstown, which isn’t on a major highway and has been struggling with population loss and high levels of opioid addiction. Unemployment is higher than both Pennsylvania and the national average.
“Opening a small business here, you have headwinds,” McGrath says.