The retail apocalypse is creating a 'rolling crisis' that is rippling through the US economy
Retailers are closing thousands of stores and going bankrupt at a rate not seen since the recession, and tens of thousands of people are losing their jobs as a result.
The effects of these job losses will hit local economies hard, according to Mark Cohen, the director of retail studies at Columbia Business School.
"This is creating a slow-rolling crisis," Cohen told Business Insider. "The people that work in retail stores will lose their jobs, then spend less money in retail stores because they are no longer employed. That creates a a cascade of economic challenges."
Since October, 89,000 workers in general merchandise stores have lost their jobs, which is more than the number of people employed in the entire US coal industry, reports The New York Times.
During his campaign for the White House, President Trump used coal miners as an example of workers who never recovered from the recession, as the Times pointed out.
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Like coal miners, retail workers don't typically have a set of skills that's easily transferable to another industry, according to Cohen.
The retail industry, which employs one out of every 10 American workers, typically pays low wages but provides employment to people in every age bracket, including those who are low-skilled and need flexible scheduling options.
So when these workers lose their jobs, they can have a hard time finding other employment.
"The coal miners are out of luck," Cohen sad. "Retail workers are in the same boat."
Mike NudelmanMore than 3,000 stores are expected to close over the next several months. The scale of the looming job losses hasn't yet been revealed, but it will likely number in the tens of thousands. JCPenney, for example, is closing 138 stores and says 5,000 workers will lose their jobs as a result.
The growing popularity of ecommerce is one reason why retailers are closing so many stores.
But the ecommerce industry won't come to the rescue of out-of-work retail employees.
Most warehouses are regional and typically located far from residential areas, which means they aren't within a reasonable commutable distance to displaced workers. By contrast, retail stores are typically located close to residential communities.
Ecommerce warehouses also employ people on a much more limited scale than retail stores, since they are becoming increasingly automated, Cohen said.
Unfortunately for retail workers, this crisis doesn't appear to be dissipating any time soon.
"Brick-and-mortar closings will continue to expand throughout the year," Cohen said. "There is no reason why they would abate."
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