Retail Jobs Not so Bad After All?
The plight of retail workers has been in the news a lot lately. From low wages to unpredictable work schedules to limited opportunities for climbing the corporate ladder, retail workers have historically been characterized as underpaid and underappreciated. A new study suggests otherwise.
The National Retail Federation (NRF) today released a study authored by a University of Georgia economist who found that retail jobs pay wages that are highly competitive with those in other industries. The NRF's report, Wages in the Retail Industry: Getting the Facts Straight, is part of its Retail Jobs Week, an initiative from the trade association to educate Washington lawmakers about the value retail jobs deliver for millions of workers and the economy as a whole.
University of Georgia Economist Jeffery H. Dorfman examined 13 categories of the retail industry and 37 categories of comparable industries based on codes under the North American Industry Classification System. The study also drew on a number of reports from the U.S. Bureau of Labor and Statistics and the U.S. Census Bureau. Here are some of its key findings:
- Retail workers with similar levels of job skills and experience earn wages comparable to employees in other sectors, including manufacturing, transportation and health care. Retail workers earn an average of $30,984 per year compared with $32,004 for nonretail workers. Excluding part-time, seasonal and younger workers in order to make a fairer comparison, retail fares even better.
- Experienced retail workers earn more than their peers in other industries. Full-time retail workers between the ages of 25 and 54 make an average of $38,376 per year, slightly higher than the $37,968 earned by nonretail workers. Compared with other industries, retail has a higher percentage of workers age 35-54 who make between $48,000 and $72,000 per year.
"Government data on retail pay is skewed significantly," Dorfman said in a press release from the NRF. "Once you create an apples-to-apples comparison, retail wages are clearly competitive with other industries and sometimes significantly higher."
Two retailers that are to be commended for their efforts in providing workers with fair wages are Costco and The Container Store. Costco's employees make an average of nearly $21 an hour, while The Container Store's average salesperson makes $48,000 per year. Not surprisingly, these two companies have employee turnover rates far lower than the retail industry average, which is approaching 100 percent.
Gap and Ikea have also gotten into the act. After announcing this past February that it was increasing its hourly wages to $10, Gap saw an increase of near 10 percent in job applications from the previous year. Ikea raised the minimum wage of thousands of its retail workers to an average of $10.76 an hour, a 17 percent average raise.
While far from getting rich, retail workers, many of whom work part time and are in their teens and early 20s, are beginning to be fairly compensated for their work. I encourage other retailers to follow the likes of Costco and The Container Store, which are investing in their employees. I agree with their premise that happier employees will treat customers better, which in turn creates happier customers. It's a win-win for all involved — including company stakeholders.
What are your thoughts on this study? Is it biased because it comes from the retail industry's largest trade association? How is your company handling the issue of minimum wage workers? Let us know your thoughts by posting a comment below.