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KDI Economic Outlook 2024-2nd Half The Impact of Online Consumption Growth on Inflation and Employment October 29, 2024

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KDI Economic Outlook 2024-2nd Half The Impact of Online Consumption Growth on Inflation and Employment

October 29, 2024

  • profile
    Jiyeon Kim
Summary
■ Online consumption growth positively impacts inflation by reducing supplier costs and promoting competition, but downward pressure on employment is observed over a certain period.

- As the rising share of online consumption exerts downward pressure on product prices, it is assessed to have partially contributed to stabilizing the inflationary surge immediately after the COVID-19 crisis.

- However, the transition to online spending has led to employment declines in sectors reliant on offline sales, such as wholesale and retail trade and accommodation and food services.
- While the transportation and storage sector, including delivery and logistics, experienced job creation, this only modestly offset employment declines in in-person service sectors, suggesting limited workforce mobility across industries.

■ Therefore, it is essential to foster market conditions that preserve the price-stabilizing effects of increased competition driven by advancements in e-commerce technology and online consumption growth, protecting against monopolization in related industries.

■ In the labor market, this shift is prompting cross-sectoral employment restructuring, suggesting the need for intervention through economic and social policies.

- Workers in traditional wholesale and retail sectors need policy support to expand online sales channels. In addition, stronger retraining programs are required to facilitate smoother transitions across sectors for workers in declining industries.

- Furthermore, alongside the expansion of delivery and logistics, the growing proportion of atypical employment arrangements, including workers in special employment types, calls for policy measures to build more effective social safety nets.
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|   Related information   |
These days, we consume almost everything online.
Since COVID-19, the growth of online consumption has been steep.
Now, online consumption is said to be curbing soaring prices.
But the problem is jobs!
KDI has explored the bright and dark sides of the expansion of online consumption.
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