Report: Low Wages And Lack Of Benefits Plague Retail Industry

Our guest blogger is Sarah Jane Glynn, a policy analyst at the Center for American Progress Action Fund.

Understandably, in today’s economic climate any job is often perceived as better than no job at all. After all, unemployment remains at 8.5 percent, and 8.1 million people are involuntarily working part-time because their hours have been cut or they cannot find full-time work.

But while getting people back to work is an important goal, it is also important that workers be employed in positions where they can earn a living wage and receive benefits.

Case in point, nearly a quarter of a million jobs were added in the retail trade in 2011, and retail is projected to be one of the fastest growing industries though 2018. According to the National Retail Federation, “Retail Means Jobs,” as the industry supports 1 in 4 jobs in America.

On the surface this looks very promising. But a new report released by City University of New York and the Retail Action Project illustrates how the wages and working conditions of retail workers in New York City are often less than ideal — especially for women and people of color.

They surveyed retail workers in New York City — a major retail hub in the United States — and the findings of their study are stark. While about one-third of the survey respondents were economically supporting at least one family member, the median wage was only $9.50 an hour, with about 12 percent earning only the minimum wage of $7.25 an hour.

More than half of the retail workers surveyed were employed part-time, with only 29 percent receiving health benefits, and only 44 percent were entitled to paid sick days. Of those workers who did not receive health benefits from their employer, a quarter had no health insurance and slightly more than a third depended on government programs like Medicaid.

The findings were even more disheartening for women and people of color employed in retail, particularly given the fact that they comprise the majority of the workforce. Women earned less money, were more likely to be employed part-time, were less likely to have health coverage, and were less likely to be offered promotions than men.

These same patterns were true for people of color as well. Black and Latino retails workers are far less likely to be offered promotions, and as a result the wage gap increases significantly with job tenure. For example, white workers who had been on the job for six months or less still earned more than Latino workers who had been at the same job for more than two years.

As our nation’s economy continues to recover, we will be well served to remember that getting people back to work is not enough in and of itself. A strong middle class creates both economic growth and stability. The demand for goods and services that grows the economy comes mostly from the spending patterns of middle class consumers. Jobs that pay less than a living wage and that result in high levels of dependency on government services like Medicaid are not the answer to our economic problems.