The retail industry is an important employer in America. This is because there are a large number of workers that are employed by this sector. The number hovers around 16 million workers. The problem is that these jobs are now at risk which means that the American economy is about to undergo a severe crisis!

The numbers are speaking for themselves. In 2016, more than 4000 departmental stores across the United States were shut. This figure is expected to increase in the forthcoming years. More than 50,000 jobs have already been lost. Even though most jobs provide minimum wage, they are still an important source of income for a significant portion of America’s unskilled labor pool.

The rise of sites like Amazon and other e-commerce players has sounded the death knell for this sector. While politicians like Donald Trump are busy trying to save American jobs in factories, the shopping mall has come under attack. America occupies the highest retail space per consumer. Hence it is the first to come under attack from the e-commerce players. Similar problems are being faced on a smaller scale in countries like the United Kingdom and even Japan!

The Problems Faced by the American Retail Worker

• Jobs Will Not Be Created: The optimist would look at the situation and say that the jobs are not being lost. They are merely being transferred from one industry to another. The jobs created in e-commerce will make up for the jobs lost in retail to some extent. However, this is not the case. The majority of jobs created by e-commerce are in the warehouse space. They do not have too many front end jobs. Robotic process automation is revolutionizing the way warehouses are managed. Hence, jobs lost are unlikely to be gained back.

• Educational Qualifications: E-commerce players are known for creating more sophisticated jobs as compared to the retail industry. This can be seen from the fact that 80% of the workforce in these e-commerce companies has a university degree. This is in stark contrast to the retail sector where only about 12% have a university degree. It is true that retail will lose jobs and e-commerce will create them. However, the people losing their jobs will be distinctly different from the people gaining them. It is therefore imperative that the workers being laid off need to be rehabilitated.

• Shrinking Paychecks: Some retail workers are not being asked to leave. However, they are affected by the crisis as well. Some of them have seen their hours cut. As a result, their incomes are being reduced drastically. Also, companies are overloading these workers with excessive tasks. They are trying to get the maximum bang for their buck. This is causing the workers to burn out and is even affecting their health in some instances.

The Possible Solutions

• Reskilling: The American government is faced with the option of reskilling its labor force. For example, people working in retail have good exposure to client interactions. With some education and training they can be reskilled and used in other sectors like healthcare where their client facing skills can come in handy. The government needs to be aggressive in identifying a list of low skill jobs. Training programs need to be immediately set up to transition the retail worker to other jobs as soon as possible. Given that most retail jobs pay minimum wage, the workers would be more than happy to work in another industry if it means taking little to no pay cut.

• Tax Credits: Companies that are laying off their workers should be encouraged to find alternate employment for their workers. This will help avoid some of the chaos. Retailers like Sears, Macy, and K-mart, must be encouraged to find alternative employment for their workers. They must then hold training sessions to ensure that their employees have the skills required to excel at the new jobs. In return for doing so, these retailers must be provided tax credits. Individual workers may not be able to obtain the training that they need. However, when workers are trained as a group, the process will turn out to be economical for everyone involved.

• Rehabilitating the Survivors: Even though the layoffs may not directly impact the survivors, they are traumatized too. Layoffs tend to drain the survivors emotionally. Some people still feel extreme fear, guilt, and stress months after the layoffs have been completed. Some of these individuals go on to develop mental health disorders. Companies must have therapists on board to identify and treat such employees.

• Welfare: Lastly, the government will have to provide for the laid off workers via welfare programs. Even though a lot of taxpayers may not like the additional burden this places on the national treasury, there is simply no way out in the short run. In the long run, the government will have to figure out a better plan to rehabilitate these workers.

To sum it up, some of the most desperate workers in America are being hit by the retail layoffs. This is because the sector provides employment to people of every race, color, and age. The schedules provided are pretty flexible too making it ideal for single parents as well. The government is woefully unprepared to take up any kind of serious rehabilitation work for now. A much more aggressive approach is required to prevent these workers from going on welfare and draining the government budget.

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