By Francesca Rheannon
The National Retail Association had its annual Big Show last week in New York. Last year’s event saw 22,000 attendees, and from the crowds streaming around me through the giant halls and corridors this year, 2012’s attendance wasn’t any smaller.
A panel on “Conscious Capitalism,” featuring, among others, the co-CEO of Whole Foods, Walter Robb had been my original motivation to attend the event [More on that in Part 2]. However, before I could make much headway into the crowds, two individuals standing outside the convention's entrance caught my eye.
Standing on the sidewalk with several dozen retail workers and supporters in tow holding signs, this small crowd was giving testimony about the conditions retail workers face in one of the hottest shopping towns in the country – New York City.
I invited the two inside the lobby – and out of the pouring rain – to chat.
Chaotic Schedules & Low Pay
While the U.S. manufacturing sector continues to hemorrhage jobs, retail jobs are up. The National Retail Federation expects industry jobs to grow by 0.4 percent per year through 2018. Retail employment is growing even faster in New York City. But what kind of jobs is the retail industry creating?
That's what my interlocutors are asking.
One of them, "Alan," works at Uniqlo, the Japanese clothing retailer that is opening up new stores in New York at a rapid clip. A fresh-faced college student with an earnest air, Alan is having trouble making ends meet on his hourly wage of $10 and fitting an erratic work schedule with his studies.
Alan’s work schedule changes every week--and he doesn’t know what it’s going to be until the Saturday or Sunday before the week starts. Nor does he know whether he’s going to have enough hours to pay his rent and put food on the table, much less have money for getting to and from work and classes.
Some weeks, he works as little as six hours and at others he could be folding clothes for 40 hours (even though, as a part-time worker, his hours are not supposed to total more than 30 hours a week).
[Editor's Note: The retail industry has gotten away with erratic scheduling for part timers for decades now because of the rule of averages, i.e., as long as a part timer isn't working more than an average of 30 hours a week every month, they're fine.]
A retail schedule is not for the faint of heart and it is wreaking havoc on Alan’s life, forcing him to choose between work and studies. “I usually end up getting scheduled during my classes, so I end up not coming in. I lose the income,” he told me.
He also suspects that he’s getting punished with fewer hours for having taken time off. The week after he called out to take a midterm exam, he was assigned only six hours, leaving him with a gross pay of just $60 for the week.
Alan isn’t alone, as I learned from my other interlocutor, Naoki Fujita.
He is the coauthor with Professor Stephanie Luce of the new report, Discounted Jobs, issued jointly by the Murphy Institute of the City University of New York (CUNY) and the Retail Action Project (RAP.)
America's Biggest Low-Wage Workforce
“Retail is America’s biggest low wage workforce,” Fujita said. (This graphic shows how retail jobs, typically low-paid, are rising, while manufacturing jobs, typically more highly-paid, are sinking.)
The report Fujita coauthored surveyed 436 workers in the New York City area across the five boroughs – “from the Bronx to Fifth Avenue” – in non-union, non-food stores with three or more outlets. Many of the workers came from profitable national chains, upscale firms like the Gap and Banana Republic to lower-priced retailers like J.C. Penney, Sears, and Kmart.
The report's main discovery: Workers are laboring at substandard pay, with no or inadequate benefits, and on erratic work schedules that make managing the care of children or going to school extremely difficult.
Moreover, while workers have no guarantee of a minimum number of hours, they often have to be on call throughout the week, available to work at the drop of a hat. They may work 10 hours one day – with no overtime pay – only to be on call without pay for three or four other days.
And all for wages that are less than $10/hour – the median in the workers surveyed – in a city where existing legislation has pegged the living wage to $11.50 without benefits, and where workers advocates say it should be much higher to cover basic necessities like food, housing and medical care. (Childcare alone costs around $10,000 per year in New York.)
Just-In-Time, Retail Style
The kind of scheduling insecurity afflicting Alan and the other retail workers captured through Fujita's survey is the result of a new strategy retailers have developed to squeeze maximum profit out of their operations.
“It’s now done by computer on a just-in-time model,” Fujita told me. “They schedule just the right number of hours calibrated to the sales volume they anticipate for each week. They want people on call – they call at 7:00 a.m. the morning of and tell you ‘we need you here at 11:00 a.m.’"
“It's that kind of fluctuation we are really concerned about," he added. “At the RAP we want to figure out ways to encourage the retail industry to shift more toward guaranteed work hours.”
It’s not like retailers can’t do that.
Fujita says other researchers have found that managers in a national women’s clothing chain knew what number of hours were needed more than a month in advance—and what 80 percent of the hours needed would be a year in advance.
Yet, 60 percent of retail workers are part time. “Why shouldn't 80 percent of workers be fulltime?” Fujita asked. And part-timers should have a minimum-guaranteed workweek and healthcare benefits. “We feel that retailers can do better,” he added.
Next: Whole Foods Co-CEO Walter Robbs discusses 'Conscious Capitalism' and what that means for a company touted for its socially responsible practices in the otherwise murky world of retail.