The challenges associated with working retail are well known: long and sometimes inconsistent hours, having to deal with rude or unpleasant customers, and low wages that make it hard to cover the bills. But for many workers, retail was all they knew, or it was the only option open to them. Those lock-in factors that had long kept stores staffed pretty much crumbled during the COVID-19 pandemic though, initiating a novel setting in which the cost–benefit equation of working retail has changed radically.
Accordingly, retail workers are quitting their jobs and moving into alternative employment in record-setting numbers. In April 2021 alone, nearly 650,000 retail workers gave notice—an astounding number that is higher in this sector than any other in the economy. Overall, 2.7 percent of workers quit, according to the U.S. Labor Department, the highest rate in history. And those numbers come on top of the hundreds of thousands of jobs that were eliminated (temporarily or permanently) when various retailers could not survive the pressures of the pandemic.
The pandemic might not be the fundamental or underlying cause of these departures, but it represents a catalyst, such that the conditions retail workers faced during its peak made the problems of retail jobs even more salient. Many workers noted that their employers expected them to work even longer hours, sometimes without providing personal protective equipment. Others cited the prevalence of abusive customers who refused to abide by mask mandates. With the recognition that their employer was showing a lack of concern for them, employees decided there was little reason to keep showing loyalty to their employer.
At the same time, new job opportunities in other job sectors that also were hard hit by the pandemic’s consequences gave workers additional options. Various former retail workers shifted into other service sectors, such as banking, marijuana dispensaries, and insurance industries. Furthermore, the expansion and embrace of remote work possibilities enabled some to dive into work-from-home employment, which represented a particularly appealing alternative to being forced to perform essential labor on the frontlines.
But perhaps the biggest factor is the money. Retail workers earn low wages, such that average annual income is less than $28,000, and the average hourly rate is $13.13. The stresses of the pandemic prompted many workers to recalculate what their time and efforts were worth, and those values proved insufficient. In response, many big retail chains have committed to raising their starting hourly rates to $15, but even that raise keeps workers below a living wage in many regions. The stimulus payments that low income workers received also gave them a little breathing room, enabling people to take a step back and consider a range of options.
Even if financial considerations represent the immediate, primary source of labor shortages in retail, financial solutions likely are not sufficient to reverse the trends completely. That is, assuming retailers decide to pay $18 or $20 per hour, workers who have survived the pandemic might find it reasonable to issue some further demands. People need relatively stable schedules, guaranteed minimum and maximum hours, safe working conditions, career advancement opportunities, training, the right to stay home if they are sick, and maybe even some benefits like health insurance. But are retail employers ready to offer these incentives to staff their stores?
Discussion Question:
- What are the best options for retailers when it comes to attracting and retaining employees? Are higher wages sufficient?
- Can the retail sector afford to pay higher wages? Can it afford not to pay them?
Source: George Anderson, “Does Retail Have an Answer for Its Jobs Problem?” Retail Wire, June 22, 2021; Abha Bhattarai, “Retail Workers Are Quitting Their Jobs at Record Rates for Higher-Paying Work: ‘My Life Isn’t Worth a Dead-End Job’,” Washington Post, June 21, 2021