Here's a good summary on the sector of the US economy that seems to be rapidly falling into crisis, in a story fittingly titled "Is American Retail at a Historic Tipping Point?"
More workers in general merchandise stores have been laid off since October, about 89,000 Americans. That is more than all of the people employed in the United States coal industry, which President Trump championed during the campaign as a prime example of the workers who have been left behind in the economic recovery.This reflects a trend away from traditional stores and into online retailers like Amazon.com is something I've touched on before, but it was reiterated in the most recently-released retail sales report.
The job losses in retail could have unexpected social and political consequences, as huge numbers of low-wage retail employees become economically unhinged, just as manufacturing workers did in recent decades. About one out of every 10 Americans works in retail.
“There is a sea change happening in the retail industry,” said Mark Cohen, a former executive at Sears, who now runs the retail studies program at Columbia Business School. “And that is bringing a sea change in employment.”
Store closures, meanwhile, are on pace this year to eclipse the number of stores that closed in the depths of the Great Recession of 2008. Back then Americans, mired in foreclosures and investment losses, retrenched away from buying stuff.
The current torrent of closures comes as consumer confidence is strong and unemployment is low, suggesting that a permanent restructuring is underway, rather than a dip in the normal business cycle. In short, traditional retail may never recover.
Year-over-year change in sales, March 2016-March 2017
Clothing and clothing accessory stores +0.3%
Electronics and appliance stores -0.7%
Sporting goods, hobby + book/music stores -3.8%
Department stores -4.5%
Nonstore retailers +11.9%
Wisconsin has so far dodged major fallout from this nationwide trend of store closings and job loss, as employment is trade (the sector that includes retail employment) is up 5,400 since October, and 7,800 in the last 2 months measured. Maybe this reverts back to trend when stores fail to hire with the warming weather in Wisconsin, and we see those job losses be registered in upcoming job reports.
I certainly don't think Wisconsin will be immune to the country's decline retail, and the concern over huge retailers avoiding property taxes with "dark store" exemptions being symptomatic of this underlying reality. What seems interesting is that because the retail store closings won't come full force until later this year, that means the decline in retail store property values and malls won't be reflected much in the property value assessments that will be issued in the coming weeks.
That damage would show up in the 2018 assessments, and the property tax bills that come out that Fall and Winter. Which makes the spectre of dark stores and empty lots in Wisconsin one of the biggest wild cards out there as we debate the state budget, and the property tax policy that will be part of it.