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Would you believe that there was a time when there was only 1 person working in retail trade for every 33 men, women, and children in this country? Oh the humanity. How did we ever survive?
Why has it taken so long for the retail trade productivity miracle to finally appear?
Let's look at retail trade employment as a fraction of nonfarm payrolls.
Click to enlarge.
The ratio has mostly been trending flat since the Great Recession. That said, I don't believe for a minute that the Fed has permanently prevented the long-term trend seen in blue. Time will tell.
This is not investment advice.
Source Data:
St. Louis Fed: Custom Chart #1
St. Louis Fed: Custom Chart #2
7 comments:
First RadioShack, now Staples:
Staples Celebrates The Recovery With 225 Store Closures, Sales Plunge
Nathan,
I'm guessing that they are not believers in the office construction rebound story.
Real Office Construction Spending per Capita (January 2014 Dollars)
The idea that technology eliminates jobs is often countered by pointing out that past technologies created many new jobs to offset the ones it consumed. The new machines still needed human operators, and productivity gains in one sector (e.g. agriculture) freed up labor for others (e.g. manufacturing). Other technologies, such as automobiles and commercial aviation, could be net demand / job creators.
I think the problem with that reasoning is that earlier technologies tended to replace muscles with machines, or machines with better machines, but current technologies tend to replace neurons with transistors (snail mail -> email) or consolidate many machines into one inexpensive, more capable machine (smart phones).
It seems like the early 2000s were an experiment with the idea that these newly freed up workers could go invent new demand in services and the FIRE industry. The current tech / education bubble appears to be just another desperate attempt at anticipating future demand. I don't see that working out any differently.
In many way I think the future came too soon. Cars got too good too fast. Apps on mobile devices have wiped out dozens of specialized devices at trivial cost (e.g. GPS in 2007 cost $200+, now free). Youtube + Netflix + Pandora etc. provide are all the media one could ever want, for much less cost than Blockbuster et al.
I think the logical conclusion of this transformation is a future that looks more like the 1950s than the 1990s, with the benefit of the Internet and cheap in home entertainment. If that happens we may look back at two incomes households and abundant post-secondary education the way we view the Concorde - reasonable extrapolations of historical trends that overshot real demand.
Nathan,
It seems like the early 2000s were an experiment with the idea that these newly freed up workers could go invent new demand in services and the FIRE industry. The current tech / education bubble appears to be just another desperate attempt at anticipating future demand. I don't see that working out any differently.
I share your sentiments. Sigh.
As for the Concorde link, you might find this post interesting, especially the comments.
Thanks for the pointer Mark.
You might like Peter Thiel's essay on the progress, which includes your exact example.
When tracked against the admittedly lofty hopes of the 1950s and 1960s, technological progress has fallen short in many domains. Consider the most literal instance of non-acceleration: We are no longer moving faster. The centuries-long acceleration of travel speeds — from ever-faster sailing ships in the 16th through 18th centuries, to the advent of ever-faster railroads in the 19th century, and ever-faster cars and airplanes in the 20th century — reversed with the decommissioning of the Concorde in 2003, to say nothing of the nightmarish delays caused by strikingly low-tech post-9/11 airport-security systems. Today’s advocates of space jets, lunar vacations, and the manned exploration of the solar system appear to hail from another planet. A faded 1964 Popular Science cover story — “Who’ll Fly You at 2,000 m.p.h.?” — barely recalls the dreams of a bygone age.
Nathan,
Fascinating.
Here is more evidence from 2012.
The shipping industry
The high oil price of recent years has been an additional pain. Container shipping companies saw their profits of around $7 billion in 2010 turn to losses of about $5 billion last year. One response to the high cost of fuel and the abundance of ships has been to adopt "slow steaming" which means cutting speeds from around 20 knots to around 17 knots to save fuel. Extra vessels are added to the "string"so that the same level of service can be provided. The glut of ships means that they can be chartered cheaply: some daily rates have slumped more than 90%.
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