Delivering Groceries

Delivering Groceries – Another low wage job

Most of us drive a mile or two for our weekly trip to the grocery store, but more and more stores have started offering pick-up and delivery services. In a recent piece in the Washington Post [“Amazon offers free Whole Foods delivery to Prime Members in 4 U.S. Cities” WP, February 9, 2018] author Abha Bhattarai quotes a supermarket analyst David Livingston: “Nearly every chain that plans on being in business in five years is moving to delivery.”

Bhattarai cites some of the challenges. “Grocery stores aren’t warehouses, so it often takes reconfiguring to efficiently find and package fresh food for delivery. And then there’s the issue of keeping cold items cold and frozen foods frozen.” The where and how of a delivery system continues to be a subject for experimenting, but everyone agrees delivery is a pricey business.

The growing use of grocery delivery services reflects the growing disparity of profits and wages. The well to do already support services that suggest growth of discretionary income as part of a growing suburban affluence. Jobs at golf and country clubs have a growth rate more than double the national rate as do recreational sports centers, nail salons, pet care services and landscaping services; perhaps jobs as delivery drivers at grocery stores will be provide some more replacement jobs.

The Bureau of Labor Statistics reports 426.3 thousand jobs as delivery drivers in 2016, their latest occupational total. The total is up from the year 2000 when 373.7 thousand worked as delivery drivers, an average increase of 3,291 a year at an annual rate of growth of .83 percent. A little over 41 percent of delivery drivers work in wholesale or retail trade, although more work at pharmacies than grocery stores.

The median wage for delivery drivers in 2016 was $10.98 an hour or $22,830 a year. Like so many jobs though the wage has not kept up with inflation. To keep up with rising prices the 2000 median wage of $20,360 would need to be $28,377.61 in 2016 just to have the same buying power. Instead it was $22,830, a 19.55 percent loss of real wages.

The Bureau of Labor Statistics reports the 2016 median wage for delivery drivers of $10.98 is only $.05 cents an hour higher than it was in 2009 when it was $10.93 an hour even though employment is going up. To keep up with rising prices the 2009 median wage would need to be $25,451.56 in 2016 just to maintain buying power. Instead $22,740 is a 10.3 percent loss of real wages over the eight years.

If the median wage for delivery drivers kept up with inflation for the last nine years it would hardly a living wage. Grocery delivery reflects opportunities in a country like the United States with extreme income and wealth inequality that creates low wage and low skill jobs providing personal services to the rich. It’s not the working of free markets; it’s a deliberate policy of Trump and Congress.