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It’s an Amazon.com economy, now; More and more of the economy’s actively hiring employers are in retailing or in the business of getting goods to stores or your home

It’s an Amazon.com economy, now

Stephen Gandel, senior editor

@FortuneMagazine

JUNE 12, 2014, 5:00 AM EDT

More and more of the economy’s actively hiring employers are in retailing or in the business of getting goods to stores or your home.

We may all work for Amazon.com someday.

On Monday, Reuters reported that the the giant online retailer plans to launch an online marketplace for local services where people can find everything from haircuts to handymen. It will be modeled after Amazon Fresh, the grocery delivery service that Amazon has been slowly rolling out. And Amazon also looks like it’s set to launch a streaming music service as well.

Recent jobs numbers reinforce that we are in an Amazon.com  AMZN -2.77%  economy now: More and more of the economy’s actively hiring employers are in retailing or in the business of getting goods to stores or your home.

The government calls this employment category trade, transportation and utilities. The utility sector isn’t adding any jobs these days. So take that out. The other two categories, trade and transportation, added nearly 576,000 jobs to the economy in the past year. That’s a little over 20% of the nearly 2.4 million total jobs employers added over the past 12 months.

And the hiring trend looks set to continue. On Tuesday, the government released its monthly report on job openings. Of the just over 4 million job openings that companies reported in April, 854,000 were in the trade, transportation and utilities industry. That’s the most of any of the sectors the government tracks. Trade, transportation and utilities also had the highest number of openings a year ago. But it has widened its lead over the No. 2 sector, which a year ago was education and health services. Last year, that sector had 712,000 job openings. In April 2014, there were 720,000 openings in education and health services, which makes it now No. 3 in terms of openings, dropping behind business services, which is right behind trade and transportation.

And the government data might not actually be capturing all of the hiring being done by Amazon. The government doesn’t say where it puts Amazon in its monthly jobs figures. And it says it actually doesn’t assign companies an industry. The companies get to choose themselves. A government economist said they will recategorize companies only when the grouping that a company has chosen is clearly wrong. Also, not all companies report their jobs numbers to the government. The Bureau of Labor Statistics monthly jobs report is based on a statistical sampling of all companies.

Still, Amazon most likely falls into a government category called non-store retailers. As of May, the government said there were just under 500,000 people employed in that category. Amazon itself says it has 124,600 employees, up from 91,300 a year ago, or about 1 out of every 4 workers in the category, though not all of Amazon’s employees are based in the U.S.

That seems like a large chunk even for Amazon, which ranks at No. 35 on the Fortune 500, up from No. 49 a year ago. So it’s possible that the online retailer’s employees are accounted for elsewhere, like in wholesale trade, or information technology, where other Internet businesses are categorized.

According to the government, the non-store retailing companies have boosted their employee ranks by just 17,000. But Amazon alone has added 33,300 workers in the past year, again not all in the U.S.

And that’s just Amazon’s direct employees. There’s the whole business of getting the things you order on Amazon to you, which is done by humans, at least for now. The government says there are now 4.6 million people who work in the transportation and warehousing industry. That’s up by 120,000 in the past year.

Of course, you could argue that Amazon is destroying more jobs that it is creating by putting retailers out of business. But the number of workers in the retail business is up significantly in the past year and continues to grow. So it’s hard to see how Amazon is putting a large amount of people out of work.

One thing you could ask, though, is whether these are good paying jobs that Amazon is creating.

The government doesn’t give wage figures for the non-store retail sub-category. In May, the average weekly salary for a retail worker was $429, which comes to about $22,308 a year. Transportation workers got nearly double that, at $793 a week, and $41,236 annually. Workers in the information industry, which includes telecommunications, were paid an average of $1,036 a week in May, or $53,872 a year.

More and more, it’s an Amazon economy. We’re all just working in it.

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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