Retail Jobs Reality Likely Isn't as Grim as It Appears

By Eric Morath and Josh Mitchell Features Dow Jones Newswires

In a year when U.S. employers added more than 2 million jobs, one dark spot in 2017 appeared to be the retail industry.

Continue Reading Below

Employment in the sector fell a seasonally adjusted 67,000 jobs last year in December from a year earlier, according to Labor Department data released Friday.

But those dire numbers, the worst among major industry categories, likely overstate job losses in the retail sector more broadly. National chains such as Macy's Inc., Sears Holdings and J.C. Penney Co. have closed stores in recent years, while online retailers such as Amazon.com Inc. added workers. But the Labor Department doesn't count brick-and-mortar retail jobs the same way as it counts online jobs.

Industry determination of workers is largely based on the function performed at different company sites, according to a Labor Department economist. That means workers at warehouses, or fulfillment centers, for online retailers can be counted under warehouse industry employment, not retail. And workers at shipping centers for the online retailers can go in the shipping category rather than retail, the economist said.

Employment in the transportation and warehousing sector rose by 74,000 last year, according to the Labor Department, more than offsetting retail-industry losses.

"The government statisticians have still not caught up to e-commerce, so there's not yet any coherent standards about how to classify e-commerce workers," said Michael Mandel, chief economic strategist at the Progressive Policy Institute, a left-leaning think tank.

Continue Reading Below

He believes the federal government will develop uniform guidelines for e-commerce workers over time.

The Labor Department won't comment on how individual companies, such as Amazon, or locations are counted, or even if they are surveyed.

That muddle over retail employment doesn't mean overall employment is undercounted. The Labor Department annually benchmarks its monthly jobs reports to tax records, which captures the vast majority of U.S. workers. For the year ended in March 2017, the department estimated it undercounted overall employment by 95,000, a small number when measured against total payroll employment of 147 million.

Write to Eric Morath at eric.morath@wsj.com and Josh Mitchell at joshua.mitchell@wsj.com

(END) Dow Jones Newswires

January 05, 2018 16:49 ET (21:49 GMT)