The retail price of America’s income inequality

By Caitlin Kelly
January 20, 2012

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

16 comments

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Under paid, over worked or not worked enough, not life work balance. You start at minimum wage in most states and get anywhere form a $0.15 to $0.25 raise a year. You are hired as part time but can during peak season work full time. Schedules come out weekly and usually towards the end of the week. No consistancy in days off and during peak times you can not ask for a day off. There was a time when we had Thanksgiving and Christmas Day off which in many cases does not exist. If you are part time during Jan, Feb and Mar you may not work at all.

The pay ratio for a full time employee, with 5 years with a company and what the CEO makes will be a ratio of 1260:1

Its is tough when you are told that “we made a profit in these hard time” but your raise is non-existant. Many don’t even give their hard working employees bonuses and/or profit sharing. If it wasn’t for the hard working, under appreciated worker these CEO and other top management wouldn’t be making the money that they are. Will the full time, average worker qualifies for food assistance, free school lunches for their kids Their bosses rack in more than enough in Salary, Benefits, Bonuses, Profit Sharing and Stock Options the back bone of the company starves, no retirement and most likely no benefits and poverty level wages.

Then throw in the rudeness of customers tops off the miserable conditions. I for one have been trying very hard to get out of retail but that is what I ended up doing cause I needed a job, PERIOD. So! For those of you that think it is alright to be rude to retail workers, where do you think it is alright to behave like that. My daughter has had customers make her cry because they are either having a bad day or they think she is young that she doesn’t know what she is doing.

The next time you are shopping remember this is a job most of you couldn’t handle. We are forced to make sales, sell credit cards, push warranties, sell certain number of items per transactions, certain dollar amount per transactions everyday. If you do not do this everyday you will not get a raise. Everyday your goals must be met.

Posted by pitters | Report as abusive

This is presented to make points that are misleading. The vast majority of America’s “poor” drive, have at least some nice clothes, and are fat. Many can’t read well, write well or understand math well enough to balance a checkbook. That makes them “easy marks” for the unscrupulous who can.

Any way you slice it, everyone in America has had meaningful educational opportunities and meaningful employment opportunities over the years. It is a national disgrace that our educational “establishment” has long focused on college preparation at the expense of vocational options many more need desperately. They genuinely think it beneath their dignity to convey skills the economy needs, and haven’t a clue how to do it.

Many of the “poor” have squandered their opportunities and consciously chosen to “be” as they are…virtually unemployable. Such behavior is irresponsible, and has consequences. They find out how hard it is to later find on-the-job training for skilled work (something you can’t pick up in two weeks). Unfortunately, they don’t tell this to the next generation.

Don’t bad talk American society’s deficiencies until you can point out to another economy of equal or greater size with equal or better achievements. Those Socialist European economies many point have a common currency, the Euro. The Euro is is terrible shape and likely to get worse, therefore what those mini-economies have been doing over recent decades is proving increasingly unsustainable. The same can also, unfortunately, be said of the U.S. dollar. The difference is that the world continues to believe in the strength of the American economy and the strength of the dollar.

That’s why the dollar will remain the international medium of exchange unless or until something better is available, which gives America time to get our spending priorities and revenue priorities in better balance while all nations struggle to manage the transition from an industrial society to an information society where more and more computers and programmable production robots assume work once done by humans. The displacement and dissatisfaction of this transition will clearly be of the same magnitude as was that of the industrial revolution, which also adversely affected many, many people.

All are NOT created equal…look in the mirror and then elsewhere. Life isn’t fair. Get used to it. The accident of birth in America is a HUGE advantage. It is NOT, however, the “entitlement” to a “middle class life” many today expect. For everyone who is above average in income there must be someone who is below average in income. For every “winner” there must be a loser. In life, everyone doesn’t get a trophy.

Many of the “poor” have children, some lots of them. Having one or more children you can’t afford is a poor choice. Getting pregnant by “accident” is a mistake. Poor choices and “mistakes” have consequences that it is NOT society’s obligation to “even out”. As unique and wonderful as America is, it isn’t Utopia and never will be. Like a good reputation, the “middle class life” is a reward that must be individually earned and maintained.

Posted by OneOfTheSheep | Report as abusive

We ran a retail business around five Asian countries some years back and our hundreds of store employees, no matter what country they came from, all had one thing in common. They were all always looking for a new job.

Retail jobs suck, full stop. Romney citing Dominoes, BK, et al as large job creators only punctuates how out of touch with reality he is.

http://www.WeWereWallStreet.com

Posted by WeWereWallSt | Report as abusive

OneOfTheSheep is certainly entitled to his,her opinion, but as a matter of simple logic, he/she (or is OnOfTheSheep a corporation?) is wrong to assert that “For everyone who is above average in income there must be someone who is below average in income.” Given the incredible skewing of income distribution in the US toward the top 1% of earners, there are vastly more people with below average income than there are people with above average income. If present trends continue, we could become a country of 100 “winners” and 310 million “losers.” Eventually there will be too few “winners” left to support a domestic trophy industry.

Posted by ronsilvercity | Report as abusive

great article, Ms. Kelly!

Posted by gregokauf | Report as abusive

Good article, I guess. Problem, though, is that the author acts as if this is somewhat surprising…so as to say “you mean people who work in retail in New York DON’T earn good wages? WHAT! NO WAY!”

It’s retail. You’re never going to earn good wages. You’re always liable to have your shift changed at the drop of a hat, you don’t get benefits, and your 0.25 raise per year is statistically equal to zero when you take inflation into account.

OK…so…is any of my prior paragraph shocking? If so, you’re either ignorant, or in denial. And honestly…how much should retail employees earn? A ‘living wage?’ In NYC that’d be about, what, $15-18/hour? There are people who’ve been to university, taken out loans, worked hard to signal they’re a ‘good bet’ on the part of an employer, and THEY don’t earn that much!

Ask a very simple question: what skills to retail employees possess, what value to they add? Do they have a marketable and unique set of skills, or are they essentially a warm body, able to be replaced as needed, with little to no cost to the employer? As long as they the employee at all resembles the latter, they’re never going to earn a ‘good wage.’ Those days are behind us. Get a skill, or be prepared to work overtime now, and pick up a second job in a few years.

Posted by Adam_S | Report as abusive

What “OneOfTheSheep” and other vulture-Republicans (like Romney) don’t realize is the extent to what we Republicans will do under the guise of the “market economy.” Because I’m retired (at 38 years old BTW) and now feel bad about my success at the expense of others, I’ll tell you the secrets: (1) We Republicans have no problem lying to get to the top and/or make money — I made TONS o dough in the mortgage scam: basically, give anyone a loan for $1 million (or whatever; emphasis on whatever), get my 3% commission ($30k) or more, misappraise the property, don’t look up credit score, get the idiots to sign, and boom, I’m done, did it hundreds of times (emphasis on hundreds); (2) to me, the market bottom for American workers is a global “bottom” and there is plenty of room for more “bottom” — until I see complete starvation/poverty like I see in India and China (meaning I want to see Americans living like dogs on the street in cardboard shantytowns), then the USA is not truly globalized, minimum wage in the USA should be $0.10/hr. because that is what these people/dogs are worth in China (they are worthless), I don’t want to spend nothing on them (go die in a lonely street and not in a hospital using up my tax dollars); (3) we do not nearly have enough women making money on street and with my monies that I have saved I would spend it on this as well so again USA has long way to go.

Posted by BabushkaM | Report as abusive

@BabushkaM and @OneOfTheSheep: I cannot believe what a selfish world we live in based on your comments. What kind of society has the USA become? The reason I don’t live in China or India or Africa or any of the countries with massive poverty is because they are not pleasant places to live. I don’t know why we in the US continue to allow in other countries’ lifestyles (meaning poverty and poverty level jobs) into our own. @OneOfTheSheep: you seem to say that people have choices, but it’s turning out that in the USA, it’s not about choices because I know people with MBAs and law degrees who have worked hard all their lives and now cannot find a consistent job that makes over minimum wage — they have no choice. It seems that in the USA, it’s only about being born rich or “lucking out” to find a job where you can support a family, or turning to a life of crime and that seems to be a good choice perhaps nowadays. Does our market support having slave level wages like they do in China where you are forced to be sterilized after having one child? Where does the free market and what are the limits? Are we all destined to live in cardboard box shantytowns (like Babu says) where the poor serve as effective slaves to the rich? Where are the limits?

Posted by NeoDemo | Report as abusive

@ronsilvercity,

I said: “For everyone who is above average in income there must be someone who is below average in income”.

You said: “Given the incredible skewing of income distribution in the US toward the top 1% of earners, there are vastly more people with below average income than there are people with above average income.”

We are both right. If the highest earner rakes in a billion dollars and the bottom one earns zero, then the “average income is half a billion dollars (without regard to how many make that much). Unfortunately, this is so divorced from day to day reality as to be meaningless, and such a point was not my intent to make. I therefore apologize to any I unintentionally mislead.

What I had in mind was the “median income of the middle class” today, “middle class” being defined as those above 30% and below 70% of “income”. Those rising out of the “middle class” contribute more to this skewing than those falling out of it. The combination of such “upward” and “downward” mobility, or “earnings polarization” is why the number of “middle class” individuals shrinks.

Yes, there are lots more individuals are at the bottom extreme of earnings than at the top extreme of earnings, but the reality is NOT the pyramid many envision. Even at the very top, the TOTAL income dollars received by those in “the 1%” are quickly dwarfed by the income dollars of those in the 2-30% because the number of individuals at each level IS a rough pyramid. This is also true for the 30-70%.

The number at the “apparent” bottom is grossly distorted. It includes without proper distinction those who do not work that are unemployed but looking, unemployed but not looking (for whatever reason), those who are mentally ill or disabled and genuinely can not work, and those who work in the “underground economy” for cash and yet APPEAR not to work (which would include drug labs and pushers). The bottom 30% expansion is also exploding because this is where most of our population growth is. As the number of the essentially unskilled increases, economic opportunities (demand) is on a permanently decreasing curve making for increased competition for the available minimum-wage jobs.

Here’s a link to an article with interesting statistics:

If you look at the “wealth controlled” in terms of number of people at each level you don’t get a pyramid either. That’s why the “1% vs. the 99%” battle cry of OWS is so misleading as to merely brand those who use it as hopelessly uninformed and incapable of meaningful dialogue. The old French saying is that “If you’re young and not a Socialist, you have no heart. If you’re older and remain a Socialist you have no brains.”

Posted by OneOfTheSheep | Report as abusive

Life in America seems to be getting angrier and poorer and more entertained and more fat and more dumb by the day. One wonders when the losers are going to band together and say they cannot take it anymore. One also wonders if the masses will rally around the flag again if the US suffers another terrorist act. I know that is not what is on most people’s minds, but nevermind that. The centrifugal forces of hatred and envy and greed that are normally kept in polite check by our system might go off-kilter someday in the land of opportunity and killing-Pakistani-kids-everyday-like-it- did-not-happen. The clownshow of the war in Afghanistan, the cash bonanza of contracting in Iraq, the housing collapse, and under-paying people in America, are all related. Rudeness, competition, anger, violence, and stupidity, and all wonderfully linked. At least we are free to talk about it. Welcome to the USA.

Posted by GotIQ | Report as abusive

Lewis Mumford once said that the fascist regime of Adolf Hitler was obsessed with statistics and the bottom line. They even mindlessly kept accurate records of those they processed in the camps. They were reacting to the collapse of their economy during the Weimar years and the country seemed to have lost all sense of proportion during the War years. Oneofthesheep is using statistics in his usual self-serving manner. He isn’t really concerned for the effects of income inequality but only with preserving his own status relative to the rest of society.

The US must keep the vast majority of income earners in this country from falling through the cracks or it will drag the entire superstructure of wealth down with it. India was a good example of vast fortunes squandered on the idle wealthy while the rest of the country languished at subsistence levels. Anyone who has seen the movie “City Of Hope” can see an illustration of the gruesome logic in the neighborhood boss. The British were able to dominate it and annex it as part of their own empire. It was a dinosaur with a very tiny wealthy brain and a vast body composed of the severely constrained living in misery or mere subsi-stence. And wealth does not equate with intelligence as much as the wealthy would like to flatter themselves that it does. Wealth exerts it’s own gravitational attraction and will clump as surely as the debris that formed this planet 4 billions years ago. The wealthy of India were doing very little useful with that wealth and could not keep pace with the changes the rest of the world were experiencing during the 18th and 19th centuries.

The real estate of this country depends on a very large market of affluent people of most of it will face decay and ruin quickly. A small strata of people affluent enough to buy the dominant building type in this country – the single family home and the private automobile or two or three – will require much larger incomes than minimum wage/ part time workers are likely to see. The pressure now is for all income groups that are not sitting on hoards of investment cash – and that can survive the swindles (or inadequacies) of Wall Street – to all go down. Wall Street has put its faith and funds on money-making-money and it faces reality checks provided by the low income countries who still make the goods that money buys. High tech is a very dubious game of bluff itself. How goods or services are valued in society is a game that somehow escapes analysis (or at least very common understanding), and except for the fact that we tend to shop for the lowest cost elements that will do the job, it is very difficult for the average consumer to comprehend, let alone control, the cost structure of the economy. Wall Street does not know how to do that either and that is why “faith in the free market” is the mantra of so many of those on the street.

Even the value of the dollar is resting on bluff and even lies now. The Chinese on the other hand are living with a very solvent government with little of no debt but severe restrictions of family size. The Chinese are not starving and the vast majority seems to be housed and clothed. Their government is now carefully encouraging consumerism. I doubt they will allow the country to stratify into the vastly wealthy and the squalid poor unless the government becomes so corrupt that the wealthy are able to buy political power and damn the rest of the country to privation.

I say the US must ensure its general population is sufficiently affluent to support its standard of living but I think the time has passed that it can and that is why it is resorting to fascist tactics to preserve its way of life. It is already on the defensive. The moneyed here can use war to try to control markets and disrupt the competition. That is all that is left to it now. One could say – and it has been said frequently, in other words, by many other commenters on this site, that it is clinging to fading glory and hoping bluff and belligerence will support the status quo.

BTW – I think babushkaM is a plant of some kind. There is something very odd about her syntax. And her argument is not ringing very true.

Posted by paintcan | Report as abusive

paintcan leaps forward once more to equate statistical facts only with the horrors of Adolf Hitler and the America of today with India under English dominance and exploitation. Each is so inappropriate as to be silly.

The “average consumer” does NOT and has NEVER controlled “the cost structure of the economy”. They merely react to it. The same is true of Wall Street. It is the success or failure of America’s business leaders, the movers and shakers who shape our future with their vision, true or flawed, and not the profiteers. paintcan would condemn any of these who read tea leaves in good faith that are less than perfect in predicting an ever uncertain future.

He, and those who think like him, have lived their whole life in “good times”. They have deluded themselves into thinking that “bad times” will never come again and it is for the government to guarantee this at any cost. For this to be true all that history teaches would be wrong. Our government today can’t get out of it’s own way.

The Chinese have literally created their current prosperity by “severe restrictions of family size”. They have advanced from an economy that only made bullets and bombs for war into an economic success many today envy and fear. The third world should follow China’s example.

A world of SEVEN BILLION population (and growing) would do well to follow their example. When it is the uneducated, the unskilled and those without land that comprise the great majority of population growth their impossible expectations are all but certain to bring about events that decimate THEM.

We live in “interesting times”.

Posted by OneOfTheSheep | Report as abusive

OOTS (and all those who think like him) ignores the effects bad times will bring. And he also ignores his own rise during the good times. We are only about ten years apart in age. He was not a depression child.

To follow China’s example – he should recall that China went through a thorough leveling of the playing field and a start from scratch. They endured a very hot melting pot to get where they are now. And I am sure he wouldn’t have liked it any more than I would.

And it was Lewis Mumford who made that comparison. While citing it I actually came to understand his point. I also have to remind myself that Bookkeeping is not the same as statistics. Statistics can be very creatively and deceptively manipulated and no one gos to jail for that. But fudge the figures and one can do time.

Posted by paintcan | Report as abusive

[...] The retail price of America’s income inequality [...]

“One of the Sheep” also forgets that there are many people like me who realize that the system doesn’t work anymore and I am targeting people like him (and their children or whatever of “One of The Sheep’s” that I can abscond with, or leverage, or whatever, to get my way with them) to get what was stolen from me and/or what I was fraudulently induced to believe. If the “brains-based” system doesn’t work, then I’ve got to use the “brawn-based” system to get what I need to survive. Optimizing the “brain-based” system (that doesn’t work anymore) included getting an education and working hard, which doesn’t function anymore (but that I did); as a result, I’m now optimizing on “brawn-based” tactics, which include lethal weapons training and related and covert tactics to allow me to get what I need to survive. I’m not going to be like my relatives who were lead to the “death-chambers” without putting up a fight for the survival of me and my family. I will take what was wrongfully gotten by Babu and One of the Sheep so I can share from a system where fraud and unfairness ruled even tho it was portrayed lyingly otherwise. Sorry.

Posted by NeoDemo | Report as abusive

You make a big mistake NeoDemo thinking that people are going to be threatened with mass extermination in industrial death camps. The Israelis have made an obsessive national ethos out of the Nazi regime and they have become a smaller scale version of it vis a vis the Palestinians.

Notes in the UN new digests (of the past few nights) have stated that the Israeli government is continuing to pursue the most heavy handed and brutal policy of forced displacements, condemnation and demolition of Palestinian homes, without compensation of any kind. The notices claim that tens of thousands of Palestinians are at risk from their overtly aggressive and idiotic tactics.

Posted by paintcan | Report as abusive