It May Be Profit Season for US Companies, but Workers Are Left in the Red
November 29, 2019
By Andrea Flynn
Today is Black Friday, the start of the holiday shopping season. Retail workers will leave their Thanksgivings early—if they enjoy one at all—to start long shifts for too little pay in order to support the consumer binging that is America’s holiday season. The deals for shoppers may be sweet, and the profits for companies will be exponentially sweeter; but the cost for workers will be steep, a symptom of a sector and economy that are stacked against workers, and especially against women workers.
The boon of Black Friday and the month of holiday shopping it launches contribute to the retail sector’s role as a pillar of the US economy. In recent decades, however, retail jobs have become increasingly precarious. One in ten US workers have jobs in the retail sector, and over 60 percent of US workers will have a frontline retail job early in their careers. Retail employers chronically pay poorly, and they fail to offer employee benefits and predictable or reliable schedules. The median hourly wage of retail workers is just $11, and one in three jobs in the retail sector are part time. When adjusted for inflation, the average hourly pay for retail workers has fallen by $2 since the early 1970s.
Meanwhile, the cost of fundamental needs—including goods, housing, transportation, health care, and education—have markedly increased, meaning that all of these trends put a secure and stable life further and further out of reach for retail workers.
The majority of retail workers you’ll see today and throughout the holiday season will be women, who are disproportionately represented in the lowest-paying retail jobs and in low-wage work more generally. Women are 60 percent of workers in the low-wage workforce, and nearly 70 percent of these workers make less than $10 an hour, with Black and Latinx workers overrepresented in those jobs. As the Center for Popular Democracy illustrated, in general merchandise stores, such as Target and Walmart, women make up more than 80 percent of cashier workers, the lowest-paid position in the sector. In recent years, retail work has become even more precarious for women, who have lost jobs in the retail sector while men have gained them.
The rush of holiday consumerism that starts today will help to fuel sky-high corporate profits, few of which will trickle down to workers (or toward business investments like innovation that help consumers). But it hasn’t always been like this. There was a time when retail workers were more economically secure and more likely to be able to purchase the goods they were selling for their own families.
During the mid 1900s, a stronger labor movement meant that many retail employers provided a better workplace experience, including reliable schedules and benefits like vacation days. During this time, 35 percent of all workers were in unions. Today, fewer than 7 percent of all workers and 4.5 percent of retail workers are organized; as a result, workers are far less likely to have jobs with solid pay, schedules, and benefits.
While secure work has been eroded for retail workers, the people who employ them are doing better and better. Since 1978, CEO pay has grown 940 percent while typical worker compensation has only seen a mere 12 percent bump—though in some industries, it has declined. Last year the 30 highest-paid retail CEOs each made more than $15 million, and many made a lot more than that. While workers of color scrape by, runaway CEO pay lines the pockets of overwhelmingly white men.
These trends are not inevitable. They are the result of bad choices made by those in power. One of those choices is the proliferation of stock buybacks, which occur when a company buys back its own shares from the open market and artificially increases share prices. This is a wonky concept that most of us think has little to do with average workers, but many companies are spending billions of dollars on buybacks instead of putting that money toward raising wages for the workers without whom their business would fail. With the money they spent on buybacks in recent years, Starbucks could have increased compensation for its nearly 300,000 workers by $24,729, and Walmart—the country’s largest retailer and the largest private employer of women, Black, and Latinx workers—could have increased the hourly wages of its more than 1 million hourly workers by more than $5 with the $10 billion it spent on buybacks. But they didn’t.
As millions enjoy the deals of Black Friday, retail workers and their families will pay the price this holiday season and throughout the entire year. It is long past time that employers and our society more broadly put workers—the backbone of US companies and our economy—first. This shift would help ensure that workers aren’t left behind when the rest of us have the chance to save a few bucks.