Online retail store giants, Amazon new
warehouse in Baltimore is a rare economic bright spot there, employing
3,000 people full-time in a city ravaged by poverty and a lack of
opportunities for less educated workers.
And
with Amazon’s announcement Thursday that it plans to hire 100,000 new
employees in the next 18 months, the Baltimore facility and at least 70
other Amazon fulfillment centers across the country stand to be among
the biggest beneficiaries.
Fifteen
miles away in the suburbs, all that is left of Owings Mills Mall is
rubble, demolition having started in the fall, after the last anchor
stores, Macy’s and J. C. Penney, closed within months of each other.
The
contrast between the two scenes is an example of what the economist
Joseph Schumpeter termed “creative destruction,” the inevitable process
in which new industries rise and replace old ones.
But creation tends to get more press than destruction, and the announcement from Amazon is no exception.
The
company’s hiring plans are certainly good news. But to understand the
forces roiling the American economy, it’s key to remember that online
retailing has destroyed many times that number of positions at malls and
shopping centers across America.
That’s
not necessarily a bad thing over the long term. Greater productivity is
essential for economic growth, and, according to the company, the
100,000 figure includes highly paid engineers and software developers in
addition to hourly warehouse workers. But for people caught on the
wrong side of that transition in the short term, it’s the equivalent of
an economic hurricane.
“There
are huge benefits to consumers from Amazon,” said Lawrence Katz, an
economics professor at Harvard who studies labor and technological
change. “But the workers they are hiring aren’t the same ones being laid
off.”
Even
since New Year’s Day, the traditional retail sector has absorbed more
blows. Macy’s said last week that it would eliminate 10,000 positions,
and the Limited announced this week that it would close all 250 of its
stores, eliminating 4,000 jobs.
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