Given the robust growth in employment over the past few months, last week's jobs report from the Bureau of Labor Statistics provided a sober reminder that this economic recovery is tepid.
According to the BLS, about 120,000 non-farm payroll jobs were added in March — down significantly from the 246,000 per month average increase in jobs over each of the prior three months. The official unemployment rate drifted down from 8.3 percent to 8.2 percent.
Any growth in jobs is appreciated, and most economists poring over the jobs report agree that even this pace of jobs growth is healthy enough to reduce the unemployment rate, albeit slowly. And there is other good news in the report. For example, there was no major revision to the recent good news of prior months. And among the unemployed, fewer lost their jobs and more voluntarily left their jobs, an indication that workers sense opportunity and mobility in the labor market.
But lurking within these generally not-so-great but not-so-terrible statistics is a significant downward shift in retail employment. General retail — think of big box stores and shopping malls — lost 34,000 jobs last month. Despite increasing sales, this sector has lost more than 300,000 jobs over the last decade.
Undoubtedly, the efficiency of online sales is taking a toll on retail employment. Retail employers are finding it difficult to justify, on a cost-benefit basis, paying minimum wage (plus workers' compensation insurance and Social Security) to what are often entry-level employees.
One group directly affected by this structural shift is youth. The retail sector, because of its ubiquity and need for personnel, has played a unique role in helping young people to enter the formal workplace. Many of these young workers first learn to meet the expectations of a boss, to serve the needs of customers and to go the extra mile by working in general retail.
It is clear that the decline of employment in general retail is taking its toll on youth employment. The BLS statistics show a sharp jump in the unemployment rate of 16- to 19-year-olds, from 23.8 percent to 25 percent over the last month alone. As economist Karl Smith, assistant professor of public economics at UNC-Chapel Hill, writes in The Atlantic, "The End of Retail is causing a permanent shift in teenage employment because there are not substitutes for retail jobs."
Families need to be aware of and respond to this structural change. Although a family's cash flow might benefit in the short term from the efficiency gains in the retail sector, they will need to plan for the long-term development of their children's full capacity for work to be nurtured in settings other than part-time or summer jobs at the local shopping center. In our restructuring economy, those are becoming the scarcest of all jobs.