Wednesday, January 21, 2009

Retail Job Losses

CNN has an interesting article on the substantial number of job losses in the retail sector over the year. The author, Parija B. Kavilanz, examines some of the reasons why the sector has not received as much attention, or government support, as other sectors such as the auto industry. The article states, for instance, that the low rate of unionization in the industry may explain why Washington hasn't paid as much attention to the job losses in retail.

To me, there is something else that's very interesting about what is happening in retail. I saw some numbers recently that indicated that retail square footage per capita has risen at a substantial rate in the United States over the past two decades. That didn't surprise me, given the explosive growth of big box retailers in recent years. However, it's unsettling in some ways, as we think about the tremendous growth of internet retailing in the past fifteen years. Given the shift to internet retailing, one might have expected a slowdown in the growth of brick and mortar retail square footage, or even an absolute decline. Yet, retail space has kept on increasing. That seems rather unsustainable. Some retrenchment and rationalization in brick and mortar retail appears to be in order. Unfortunately, that means a significant number of job losses in the sector, and the very real possibility that those jobs aren't coming back for quite awhile.

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