Why the explosive growth of e-commerce could mean more jobs

The South Florida Times ^ | October 24, 2017 | Christopher Rugaber, Economics Writer, The Associated Press

[2ndDivisionVet]

WASHINGTON (AP) – When the robots came to online retailer Boxed, dread came, too: The familiar fear that the machines would take over, leaving a trail of unemployed humans in their wake.

“I had a lot of people asking me, `What is going to happen to us?”’ says Veronica Mena, a trainer for the e-commerce startup, recalling the anxiety that rippled through her co-workers after company executives announced plans to open an automated warehouse in nearby Union, New Jersey.

Yet their fears didn’t come to pass.

When the new warehouse opened this spring, workers found that their jobs were less physically demanding than at the older, manual warehouse in Edison, New Jersey. Instead of walking thousands of steps a day loading items onto carts, employees could stand at stations as conveyor belts brought the goods to them....

[theBuckwheat]

This is simple: anything that increases efficiency increases prosperity. Now, the problem is what Bastiat brought out: the economy is the sum total of the economic effects that are seen and those that are unseen.

What is seen is that some workers are displaced and have trouble adapting and finding new employment. What is unseen is that lower prices allow many people, maybe millions of people to enjoy a higher standard of living and thus to increase employment in other areas of the economy.

Look, the media household income in the US in 2016 was $56,516. Roughly speaking, for every million dollars in increased profits means that business can create jobs for 17 households. The converse it true: for every million dollars of increased inefficiency, it sucks the entire annual income of 17 households out of the economy.

The only way that jobs are created is that they produce more than the cost. The money does not grow on trees, or printing presses. It must come from profits. We can only have profit when a business creates more value to the customer than it costs to provide that service or item.

What people forget, or don’t care to know, is that they are a business of one and they must continually provide value by having skills that employers want to bid for. When they allow their skills to become arcane or less valuable, or course they will eventually be replaced by some other way of doing the job. This is one of the hard truths of life that must not be sugar coated, or obscured by too many government benefits.