The YUGE job losses Trump is ignoring: retail workers

Originally posted in Daily Kos

Image 4-25-17 at 4.31 PM

Malls across the U.S., like this mall in Milford, Connecticut, are growing emptier and emptier. Which is bad news for those employed by the mall’s stores.

This is not a good time to have a job in the retail industry.

If you’ve been to a shopping mall recently, you may have noticed that many storefronts are empty. Stores that are still open aren’t crowded, and there are plenty of spaces in the parking lot.

About one in every 10 American workers works in the retail industry, and one out of every three retail employees works part time. A retail job is the first job experience for about one-third of Americans, so cutbacks block entry into the job market. According to the Bureau of Labor Statistics, 15.9 million people worked in the U.S. retail industry in January 2017, but that number has been shrinking. Since October 2016, 89,000 retail workers have lost their jobs. The most recent BLS jobs report in early April showed that 30,000 retail workers lost jobs in March—about equal to the number of retail jobs lost in February. The March decrease alone was enough to lower the job growth numbers to just 98,000. The two-month job loss was the worst retail job loss since the Great Recession in 2009.

Donald Trump loves to whine about jobs lost in the disappearing coal industry and in manufacturing. He brags that he will bring back coal and factory jobs—a promise he’s unlikely to keep, even as his executive orders weaken industry regulations. But lost retail jobs hit America much harder, and he’s silent about those. Those 89,000 people who lost retail jobs are more than the entirety—53,000—of those employed in the coal industry. While the coal, manufacturing, and retail industries have all suffered losses because of globalization and technological advances, the job losses aren’t always equal. Department stores have lost 18 times more workers than coal mining since 2001. Linda McMahon, the former World Wresting Entertainment CEO who now heads the Small Business Administration, is more concerned about trashing regulations than measuring the impact of retail job loss.

When retail workers lose their jobs, that affects a lot more than the workers—it affects their families and their communities. The cascading downward spiral means fewer dollars in families’ pockets, fewer dollars spent at other stores, fewer stores to spend money at, and fewer dollars to buy food and to pay mortgages and rent. An estimated two-thirds of the U.S. gross domestic product comes from retail consumption. So store closings and openings can indicate how well the U.S. economy is doing overall.

Overall, BLS numbers show that nearly half of all retail workers are female, and nearly 75 percent of the work force in clothing stores is female. Some 12 percent of all retail employees are African American, six percent are Asian American, and 17 percent are Latino. Those percentages are much higher than percentages in the same demographic groups holding jobs in the coal industry and in manufacturing, which is much more white and male.

But those women and minorities aren’t being interviewed by the news media as the people the economy left behind.

A recent story in The Atlantic laid out three possible reasons why retail job losses remain hidden under the political and media radar: geography, demographics, and nostalgia.

How has the retail bloodletting been so much quieter than the decline in mining and manufacturing? There are several plausible explanations. First, mining and manufacturing jobs are geographically concentrated. Sixty percent of coal-mining jobs are in just four states: West Virginia, Kentucky, Pennsylvania, and Wyoming. Retail is spread more evenly across the country, so there are “mining towns,” which politicians can visit and photographers can capture and where the pain runs especially deep, in a way there are not “mall towns.” Second, as SlateChief Political Correspondent Jamelle Bouie tweeted, the demographics of a job can determine its political salience. Coal mining is still 95 percent white and 95 percent male. Department store workers are 40 percent minority and just 40 percent male. The emphasis on work that is white, male, and burly may represent an implicit bias against the working class of the modern service economy, which is more diverse and female. Third, mining and manufacturing jobs feed into a national nostalgia for the mid-century economy, with its unionized workforce, economic growth, and high pay for men without much education.

A story from Slate by that same Jamelle Bouie makes the same argument:

In terms of attention, [coal miners] punch far above their weight class. They constitute a small portion of the American workforce, and yet, elite journalists devote countless words to their lives and communities, while politicians use them and their priorities as a platform for performing authenticity. For those in and around politics, one’s connection to “real America” is often judged by one’s proximity to these workers and their concerns. Which raises a question: Why them and not those retail workers who face an equally (if not more) precarious future? …

Retail work in malls and shopping centers and department stores is largely work done by women. Of the nearly 6 million people who work in those fields in stores like Sears, Michaels, Target, J.C. Penney, and Payless, close to 60 percent are women. … A substantial portion of these workers—roughly 40 percent across the different kinds of retail—are black, Latino, or Asian American. …

Work is gendered and it is racialized. What work matters is often tied to who performs it. It is no accident that those professions dominated by white men tend to bring the most prestige, respect, and pay, while those dominated by women—and especially women of color—are often ignored, disdained, and undercompensated.

Many of us likely had a retail job at some point in our lives. Maybe we worked at a corner mom-and-pop shop or worked weekend and evening shifts at a store in a nearby mall. My own experience was peddling popcorn behind the candy counter at a mall multiplex. The pay was barely above minimum wage, but at least I got to see movies for free.

Sears Roebuck and Co. used to be the biggest name in retail. It advertised itself as the store “where America shops.” It once had a booming catalog business that sold mail-order house kits and was where much of America bought appliances and tools. Now, with competition from big-box stores (also not doing well) and online shopping, Sears is closing stores and might be on the verge of collapse: The company lost $2 billion in 2016, and sales dropped 10.3 percent in the fourth quarter, when many stores finally sell enough to be in the black. According to an NPR story:

Despite its merger with Kmart in 2005, Sears has consistently lost millions of dollars each quarter.

The retailer has closed hundreds of stores, slashed jobs and sold off key assets like the Lands’ End clothing line and its legendary Craftsman brand — although both brands continue to be sold at Sears. Independent retail analyst Sucharita Mulpuru says these changes haven’t worked.

“There are just so many onerous forces relating to competition,” she says. “I think that no matter what they do, they are fighting a losing battle.”

And what of Sears workers? The generous employee discount program is gone, replaced with a “point system.” Some 250 employees at Sears’ corporate offices were laid off last year, and 150 openings went unfilled. If you worked in sales and your store closed, you’re out of luck.

Of course, Sears isn’t alone. In a trend a story in Business Insider dubs the “retail apocalypse,” more than 3,500 stores are expected to close in the next few months of 2017. It’s being described as “one of the biggest waves of retail closures in decades.”

Chart on retail store closings

This might have been avoided if malls weren’t overbuilt to begin with. The Business Insider story reports that the United States “has 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia, the next two countries with the most retail space per capita.” When a major anchor store in a mall closes, smaller stores are soon to follow. “Nearly a third of shopping malls are at risk of dying off as a result of store closures,” the story added. What do those workers do then?

Retail workers aren’t highly paid. Some, especially those in higher-end clothing stores, are paid on commission. They don’t have pensions or 401(k) plans, and they don’t earn enough to save for retirement. As the Bureau of Labor Statistics reports, the annual median salary for a retail employee was $22,040 in 2015, and the annual median hourly wage was $10.60.

And they’re not getting very many raises, either. As an AP story puts it: “Average hourly earnings for retail employees, including managers, has inched up just 1.1 percent over the past year, compared with a 2.7 percent average increase for all U.S. workers.”

There are unions that represent retail workers, but they don’t have much power—or membership. The Retail, Wholesale, and Department Store Union is a semi-autonomous subsidiary of the United Food and Commercial Workers union. But union membership for retail workers has dropped from a high of 15 percent of all retail workers in the 1970s to less than five percent today—one of the lowest rates of unionization in the entire economy.

The bottoming out of the retail market and retail jobs isn’t surprising to anyone who orders merchandise online. E-commerce has grown faster than delivery of packages by drones. According to a story in The New York Times:

Between 2010 and 2014, e-commerce grew by an average of $30 billion annually. Over the past three years, average annual growth has increased to $40 billion. …

This transformation is hollowing out suburban shopping malls, bankrupting longtime brands, and leading to staggering job losses. …

The job losses in retail could have unexpected social and political consequences, as huge numbers of low-wage retail employees become economically unhinged, just as manufacturing workers did in recent decades.

Even Black Friday, the retail sales extravaganza on the day and weekend after Thanksgiving when stories traditionally showed profits, has seen decreases. Figures for 2016 showed that 99 million people shopped in brick-and-mortar stores, 3 million fewer than in 2015. Online shopping, on the other hand, went up, even as people didn’t wait for Cyber Monday: 108 million people shopped online over the Thanksgiving weekend, about 5 million more than the previous year.

As retail workers in brick-and-mortar stores have lost jobs, hiring has picked up in online warehouses for companies like Amazon. But there are too few of those jobs to make up the difference, and many of those jobs are quickly getting automated.

“Until now, retail workers—unlike the car-making and coal-mining industries—have made little political splash,” said a story on Axios Media. “Look for that to change.”

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1 Response to The YUGE job losses Trump is ignoring: retail workers

  1. interesting. Fits my bearish view for the economy over the next year.

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