reuters

The retail price of America’s income inequality

January 20, 2012 @ 9:16 pm

By Caitlin Kelly

Retail is considered one of the bright spots in the American economy, one of only six job categories projected to grow nationally through 2018. But a survey released this week makes clear that many of these are jobs in name only, offering poverty-level wages, highly restricted access to benefits, part-time work when full-time is desired, and a workforce so cowed that it routinely accepts working conditions that make work-life balance, or the chance to upgrade skills and move into better-paid work elsewhere, all but impossible.

The survey, conducted by Retail Action Project, a New York City-based workers’ advocacy group, offers frank data from 436 workers in 230 stores across the city’s five boroughs, from the luxury purveyors of Fifth Avenue to discount outlets in the Bronx. With 242,000 retail workers in Manhattan alone, the data – the first ever gathered directly from these workers – offers a telling and sobering look at this important industry.

The report’s highlights:

• The median wage in New York is $9.50 an hour, 52 percent lower than the citywide average for all industries. If associates in one of the nation’s costliest cities can’t even earn a living wage, who can?
• Black and Latino workers surveyed are more likely to be hired part-time and given worse schedules than their coworkers. Based on average wages and hours worked per week, white workers’ income is 12 percent higher than that of their black colleagues.
• Just over half of workers surveyed earn less than $10 an hour. But more than three-quarters of female Latino workers – 77 percent – fall beneath that threshold.
• While 54 percent of white workers received a raise or promotion after six months on the job, only 39 percent of black workers and 28 percent of Latino workers did.

The irony of retail work for many of these employees is that they can’t afford to buy much of what they’re selling. When I worked as an associate for 27 months at The North Face, a $30 hat, even with an employee discount, cost more than an hour of my labor.

The income of the median American family, adjusted for inflation, is lower now than in 1998. Gas, food and other costs have risen significantly, yet many workers’ wages are falling behind. The American economy still relies on consumer spending – 70 percent – yet fewer and fewer hardworking Americans can keep up.

But if you don’t earn it, you can’t spend it.

One growing and significant industry trend is retail employers’ unwillingness to set associates’ schedules more than a week in advance. Only 17 percent of those surveyed have a set schedule, allowing them the flexibility necessary to meet other obligations or acquire further education. Almost half of the workers said their manager changes their shift without their consent.

If you can’t plan your schedule more than a few days in advance, child care, medical appointments and family obligations become unmanageable. No one is that flexible, or wants to be. For many workers, specialized courses in a new field are essential if they ever hope to escape the low-wage ghetto of retail work. But sitting in a classroom at the same time every week is impossible when you can’t plan ahead.

Joe (not his real name), a 22-year-old college senior working three days a week in Manhattan at Uniqlo for $10 an hour,  struggles constantly with schedules set at his employers’ whim. “If I could get a better job, or a better schedule, I would, but I don’t yet have a degree,” he says. “We get a new schedule every week, but with only a few days’ notice. I tell my managers the days when I’m in class, but they schedule me anyway. I end up leaving early and losing that income,” he told me.

And who can afford rising tuition costs on wages so low that some full-time workers still need food stamps to survive?

All of this is a symptom of a society that’s becoming increasingly bifurcated between rich and poor. And the ranks of the poor are swelling. A survey in late 2011 by the U.S. Census Bureau found that one in six Americans now lives in poverty, the highest number ever reported by the organization. The Pew Research Center, meanwhile, last year found the median wealth of white American households is now 20 times that of black households and 18 times greater than Hispanic households. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.

When you combine that data with the Retail Action Project’s, the trend is clear: We’ve become a nation of the poor selling to the rich.

PHOTO: Customers shop at Macy’s department store in New York, November 25, 2011.  REUTERS/Eric Thayer

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