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Study Points to Retail Wage Gap

The gender pay gap in retail costs women nearly $41 billion annually, according to new report by Demos, a public policy organization.

The retail industry is one of the largest employers of women, with 7.2 million in its ranks. But most of these are retail saleswomen and cashiers, whose hourly wage is $10.58.

The gender pay gap in retail costs women nearly $41 billion annually. Male sales associates earn $14.62 an hour, or $4.04 more than women in the same jobs, according to new report by Demos, a public policy organization. Lost wages to women negatively impact the economy by reducing consumer demand and costing jobs. If these trends continue, by 2022 women will lose $381 billion in cumulative wages, the study said.

The lack of hours and lack of predictable, stable schedules for hourly workers are obstacles for women trying to work their way out of poverty. The study points to the impact of the rise of just-in-time scheduling in the retail industry, a growing practice where retailers use scheduling software to measure consumer demand to match workers’ hours to the projected need for labor on a daily or even hourly basis. As a result, women don’t know how many hours they’ll work in a given week or month and lose opportunities for better jobs.

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The study looks at the retail industry as it is today, as it will look in 2022 if trends continue, and how it could look if the nation’s largest retailers — companies employing at least 1,000 workers — raised wages and improved employee schedules.

Today, 1.3 million women working in the retail industry live in or near poverty. If current trends continue, there will be 1.4 billion women living in poverty by 2022, plus the nearly 2.5 million family members they help to support.

Demos describes the benefits of raising the voluntary wage floor to $25,000 a year for full-time workers. The wage gap would narrow significantly even if both men and women got the same raise. Gross domestic product would grow an estimated $6.9 billion to $8.9 billion just from women’s portion of the raise, or $12.1 billion to $15.7 billion from both portions, leading to the creation of 105,000 to 136,000 new jobs.

The additional payroll costs would represent a small fraction of total sales, the study said. The cost of a wage increase to $25,000 a year for full-time employees, both men and women, comes to $21.5 billion, or less than 1 percent of the $4.3 trillion in total annual retail sales. It represents 4.1 percent of the 2012 payroll for the retail sector. “The recent move by Gap is a sign that companies can change to improve the quality of jobs,” said Amy Traub, Demos senior policy analyst.

Not everyone agrees. The National Retail Federation on April 1 called Senate legislation aimed at increasing the federal minimum wage by 40 percent “an antijob tax that would lead to higher labor costs for employers and fewer opportunities for young and entry-level workers….Raising the standard of living for low-skill, low-wage workers is a valid goal. But there is clear evidence that mandated wage hikes undermine the job prospects for less-skilled and part-time workers.”

Using profits to pay for better wages and schedules would be more productive than the trend toward stock repurchases, Demos contended. The top 10 largest retailers in 2013 spent $26.3 billion on stock repurchases, compared with the $21.5 billion all large retailers could have reinvested in their workers.

The potential cost to consumers would be just a few cents more per shopping trip. If companies were to pass half of the costs of a wage increase on to customers, the average household would pay 15 cents more per trip, or $17.73 a year, the study found.

Wal-Mart Stores Inc. turned up several times in the report, including in connection with a study by Americans for Tax Fairness that claims the world’s largest retailer receives $6.2 billion annually in taxpayer subsidies in the form of benefits that supplement its low wages.