From Shelf Awareness:
One of the most well-attended and discussed sessions yesterday at the Winter Institute featured the release of a new Civic Economics-ABA study called Amazon and Empty Storefronts: The Fiscal and Land Use Impacts of Online Retail, which aims to demonstrate the effects of the growth of Amazon on American towns and cities. The study determined that in 2014, the last year for which it could get full-year statistics, Amazon sold $44.1 billion of retail goods nationwide, which is “the equivalent of 3,215 retail storefronts or 107 million square feet of commercial space, which might have paid $420 million in property tax.” Also in 2014, Amazon avoided collecting state and local sales tax of $625 million. Between uncollected sales tax and the loss of property tax, state and local governments lost more than $1 billion in revenue–about $8.48 per household in the U.S.–the study found.
In 2014, Amazon’s warehouses–65 million square feet of space–employed roughly 30,000 full-time workers and 104,000 part-time and seasonal workers. But including all the jobs lost from stores whose sales Amazon supplanted, Amazon sales “produced a net loss of 135,973 retail jobs.”
Matt Cunningham of Civic Economics noted, too, that in 2014 Amazon book sales were about $5.618 billion, some 11.6% of Amazon retail sales. That amount of sales represents about 3,600 “bookshop equivalents and 40,000 bookstore employees,” which he called “a sobering statistic.”
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Mitchell noted that the current situation with Amazon reminds her of the monopoly on railroads in the 1800s, when “they were owned by industrialists who owned other kinds of businesses such as grain mills and steel mills and used transport to mess with competitors”–until the Interstate Commerce Commission was created.
Link to the rest at Shelf Awareness
PG is always suspicious of labor economics, particularly when combined with sponsorship of an organization whose members are the legacy businesses on the receiving end of a disruptive innovation. If you look back a few years, you’ll find exactly the same sorts of studies showing Walmart as the merchant of doom. You can make a spreadsheet say anything.
Of course, pay rates for employees of small retail establishments are always at the bottom of whatever local pay scales are. Hence, the well-known phenomenon of 10 applicants for every opening at a new Walmart or Amazon warehouse.
What is also not captured in these calculations is the benefits to the tremendous number of small businesses that sell their wares on Amazon, including bookstores selling used books. PG recalls that something like 2/3 of Amazon sales are made by non-Amazon companies who sell through Amazon. That includes lots of small businesses. They’ll pay all the local and state taxes that imaginary lost bottom-dweller retail establishments will and more.
There is also no mention of the benefits of Amazon to consumers, particularly those who live outside of major metropolitan areas. Amazon (and Walmart) typically offer working class and middle-class shoppers better prices and far better selection than local merchants do.
And the wonderful Interstate Commerce Commission? The ICC grew into a monstrous, innovation-blocking government bureaucracy. It was abolished in 1995 when Bill Clinton was president.