A twist on the “we can’t hire anyone” headlines: Some retail workers are not moving out of the job market, but up and out of service sector jobs.
Retail workers, drained from the pandemic and empowered by a strengthening job market, are leaving jobs like never before.
Americans are ditching their jobs by the millions, and retail is leading the way with the largest increase in resignations of any sector. Some 649,000 retail workers put in their notice in April, the industry’s largest one-month exodus since the Labor Department began tracking such data more than 20 years ago.
Some are finding less stressful positions at insurance agencies, marijuana dispensaries, banks and local governments, where their customer service skills are rewarded with higher wages and better benefits. Others are going back to school to learn new trades, or waiting until they are able to secure reliable child care.
“It was a really dismal time, and it made me realize this isn’t worth it,” said 23-year-old Aislinn Potts of Murfreesboro, Tenn., who left her $11-an-hour job as an aquatic specialist at a national pet chain in April to focus on writing and art. “My life isn’t worth a dead-end job.”
In interviews with more than a dozen retail workers who recently left their jobs, nearly all said the pandemic introduced new strains to already challenging work: longer hours, understaffed stores, unruly customers and even pay cuts.
Why some Americans are still hesitant to get back to work
With stimulus payments and additional unemployment, some workers are reassessing when and how they’ll get back to work as the economy emerges from crisis. (Mahlia Posey/The Washington Post)
Christina Noles spent much of the pandemic working the closing shift at a dollar store — sometimes nine consecutive days without a break — for $10.25 an hour. She felt isolated, anxious and demoralized.Last month, the 34-year-old from Concord, N.C., quit, leaving the industry she’s worked in for most of her adult life. Now she works from home for a local law firm — a job that, three days in, still seems too good to be true.
“There’s a part of me that feels like this must all be a dream,” Noles said. “There were a lot of things I liked about retail: I love talking to people and helping them, but the pandemic made me realize it was untenable.”
It’s not a ‘labor shortage.’ It’s a great reassessment of work in America.
Labor professors and economists say the pandemic also made it harder for the nation’s 15 million retail workers to find reliable child care and public transportation. But now that life is returning to normal, analysts say, workers have begun to realize they have options, capitalizing on the latest waves of hiring and government stimulus as catalyst for career change. Companies of all sizes, meanwhile, are offering a host of perks, from free appetizers to subsidized college courses, to attract and keep workers.
“We’re seeing a wider understanding that these were never good jobs and they were never livable jobs,” said Rebecca Givan, a professor of labor studies and employment relations at Rutgers University. “In many cases, the pay is below a living wage and the hours are inconsistent and insufficient. If anything, the pandemic has made retail jobs even less sustainable than they already were.”
It is too soon to tell, she said, whether the latest exodus reflects a long-term shift away from retail work. Some employees, for example, may return to the industry once child care is more readily available and other pandemic-related challenges ease, but others are turning to industries where workers are in high demand.
Retail on a good day is a hard job. Public-facing hourly jobs range from challenging when things go smoothly to an utter nightmare during things like a pandemic. There is also an undercurrent here of folks that worked in retail and other service sector jobs just spent the last 18 months with their jobs alternating between “non-essential” and “come to work regardless of your health/childcare/safety concerns or you’re fired” while watching the next level up of careers get considerations like remote work not available to them. No wonder folks that can make the move, are doing so.
Like a lot of economic issues right now, how much of this is a trend and how much is a post-Covid adjustment remains to be seen. But such historic numbers does put some added nuance to the “nobody wants to work” narrative that’s been floating around. When there are more jobs than folks for them, the job seekers that can be more picky, are.
Tight labor markets do reward workers. Sometimes.
That said, I worry that this will hasten the death of in-person retail, and drive Amazon into a large portion of the workforce. Which won’t be good given what we know about their labor practices.
One does have to wonder what Costco makes of all this, since they have traditionally had better pay and benefits then most other large footprint retailers.Report
Funny thing, my wife just started a management position at Costco. They seem to be weathering this all just fine,Report
Costco can offset the costs of higher wages with higher productivity because their high wages give them the pick of the litter. This is a good strategy. But it is not an infinitely replicable strategy.
Also, selling in bulk with limited selection helps. They have a small fraction of the SKUs Walmart sells (a quick search says 4k vs. 100k, but I can’t vouch for that), and the bigger pieces makes stocking shelves easier. All this leads to more revenue per employee; Walker has about three times the revenue that Costco has with nearly ten times as many employees.
It’s good to be Costco. But not every store can be Costco.Report
Yes, Wal-Mart can not be Costco, but the decisions Wal-Mart makes with regards to their business are actual decisions, not conditions imposed upon them by outside forces.
Wal-Mart can decide to make different trade-offs.Report
Indeed, not every store can be Costco, because not every shopper buys rice in 50lb. bags.Report
Sam’s club is the natural comparison to Costco not Walmart. Sam’s does not have the rep of treating people well that Costco does.Report
I was reading something this morning about how many workers across the board (not just retail/service industry) are looking to change careers entirely.
As for the service industry, although better compensation and work/life balance would go a long way, from what I hear anecdotally, a lot of the pain in those jobs is due to poor management. A good, competent manager who looks out for their employees can make or break a lot (and, likewise, corporate leadership that supports those kinds of managers).Report
My experience working in retail is decades out of date, but for whatever it is worth, my observation at the time was that the suckiness of the job was due to a combination of bad management exacerbated by corporate cost-cutting. This was at Walmart in the early 90s. On the one hand, the store manager clearly had been promoted to her level of incompetence. She probably was fine as an assistant manager, but couldn’t keep all the balls in the air as store manager. But a lot of this was because the pressure from above was to keep employee hours down. Walmart enjoyed its early rise due to its early adoption of inventory management technology. That had run its course by the early 90s, as other retailers caught up. So by the time I was there, the strategy was a combination of squeezing suppliers, leading to the feedback cycle of crapification of its product, and reducing employee hours. On the store level the suppliers weren’t an issue, but the reduced hours very much was. The result was everyone being stressed out, as there simply weren’t enough hours to do what had to be done. This was before retailers got the bright idea of shuffling everyone’s schedule from one week to the next, making the experience of working there that much more undesirable. Poor management on the store level is certainly an issue, but the home office has to give the store level the tools to do their job.Report
Yeah, that was why I included my parenthetical bit at the end. The best manager in the world can be undercut by idiot corporate policies.Report
I’ve worked at non-service jobs where high rates of attrition were baked into the company plan by the powers that be. At one firm, the saying was you lasted 7 months, 2-3 years, or were a lifer. I lasted 7 months. This was the learning curve to get some confidence that I knew what I was doing. Amazon and Netflix apparently have high attrition by design as well.
I think it is an inhumane way of organizing an economy/company but we are only at the start of the seachange against it as a philosophy. You still have plenty of people 40 and over who rose through the old-school boot camp way of doing things and are pissed as hell that someone suggests otherwise or differently. “I worked millions of hours and so should you.”Report
A million years ago, back in the 90’s, people like me got hired fresh out of college to do IT jobs because we could type. They found it easier to teach people how to do tech support than to teach them to type.
Minesweeper and Solitaire were included in early versions of Windows to get people to learn to use the mouse.
Companies were *DESPERATE* to hire people to do jobs. Desperate enough to hire philosophy majors.
I heard stories of IT companies telling workers that they want to hire the workers’ significant others. They figured that that would get them a leg up for both training and retention, I guess. Which meant that I heard stories of people being elevated from crap non-IT jobs to crap IT jobs.
And this kept happening until corporations discovered outsourcing.
I look at this landscape and think “good”.
And I wonder what the next outsourcing is going to be.Report
These, with the employee in Bangalore.Report
It’ll never get off the ground.Report
Another factor might be the abusive behavior of customers towards retail employees trying to enforce mask protocols, up to getting murdered on the job.Report
Basically, I’m just agreeing with Oscar about management here. But looking back at the places I’ve worked that had high turnover, it wasn’t that the work was hard and the workers were lazy- the usual explanation from bad managers. It was okay work and the wages were okay, but it was murder on the hard-working, ambitious people because it absolutely made no difference how hard they worked. They were dead-end jobs with the emphasis on the dead-end part.Report
I knew a guy who worked a warehouse.
He did about 4 times the work that anyone else did. (Quantifiable: he was an entire crew).
Made about twice as much as anyone else (under the table, naturally, because unions).Report
Yeah, I’ve heard “people don’t quit jobs, they quit managers” and while there are a number of exceptions to this (mostly of the “I can get an X% raise here or quit and get another job over there and get a 3X% raise” variant), I’ve seen more people quitting bad managers than not.
And I’ve seen a surprising number of people staying on at a particular job because of a good manager (despite only getting an X% raise even though they could quit and get a 3X% raise elsewhere).Report
Last two jobs my wife worked, she left because of bad management. She was making a ton of money (especially for a middle aged woman with a Library degree), but management was causing her so much stress, the pay wasn’t worth it.
She wasn’t shy about telling HR about it on the way out, either.Report
My last job change was due to bad management. I actually took a (small) pay cut to get out of there.Report
Working in retail as you pointed out is generally a very hard job. I’m not really a BS job guy and I think every job as thankless, boring, annoying, and stressful aspects but service-sector jobs have really sucked hard since the recession, if not before. It doesn’t help that the bosses in retail appear to be among the most clueless and reactionary of the petit bourgeois who seem to think working for them is an honor and privilege.
The laws of supply and demand work on wages as well but so many employers faced with a labor shortage seem unwilling to recognize that and their active mindset is hurt because they are not being flooded by beggars looking for jobs. There is also the fact that a lot of people who rise through the ranks of abusive employers tend to develop boot camp mentalities instead of wondering if things could be better.Report
First college athletes and now former retail workers. What is it lately with people not understanding their place?Report
One of the things left uncertain by COVID is whether it will change the employment landscape or not. There was a poll that had 83 percent of the nation’s CEOs really wanting everyone in the office but lots of employees really like working from home. Whether this becomes a huge fight or not is yet to be seen. Bay Area tech companies are slow walking people back into the office but seem to be allowing for hybrid. If companies go hybrid or work for home, it will be likely devastating on the businesses that did coffee, breakfast, and lunch from 7:00 a.m. to 3:00 p.m.Report
We will find out at the end of July where the federal workforce is going. I suspect most agencies will be hybrids, and face time in person will continue to decline in major office complexes.Report
It is an absolutely fascinating situation from a raw economics perspective. Obviously employers will shriek and wail but there’s very little sympathy from the admin or the public at large to their cries right now. The obvious rejoinder of “If you want more applicants then raise your pay” is especially sweet since the same business folks wailing now always liked to quote economics at liberals in the before times.
What is especially interesting/worrying to me is the question of price stability. Wail and cry though they may the employers will gradually jack up wages until they get enough bodies in the jobs- no doubt shrieking every step of the way. Retail and service, though, is simply not a high margin business. That means the wage increases -will- be passed on to the customers. There’s no ambiguity about that. What happens next is the big question. In older economics mass wage increases would mean mass increases in buying power and then increases in demand. If supply couldn’t keep up then we’d have the ol’ inflation dragon come rousing from its decades long slumber. This new economy, though, is a very different beast. My own Pollyanna like guess is that the classes up from baseline retail and service have enough financial extra that they’ll absorb the increased cost with only a marginal degree of grumbling. The environment is competitive enough that the bigger corps might even have to eat a lower profit margin as well. International economics figures in as well as the US greenback is pretty much the only game in town outside of the Euro for wealthy people to stash their fortunes in. Those are all counter inflationary factors.
Still, it’s going to be fascinating to watch as supply chains crank up and everything starts moving again after the covid imposed shut down. Inflection points I’ll be watching for will be September when the UI benefits run out (I guarantee they’re not gonna be extended again) and the fourth quarter when all the bugs start getting really shaken out of the carpet. God(ess?) I hope we get a post plague boom time. It’d be so good for everyone and would really help our political mess too.Report
Chipotle claims to have raised their base salary to $15 an hour with only a 4 % increase in prices per item. That suggests many things, not the least of which is that their profit margins are sufficient to absorb the cost.
Frankly given that CEO pay is on the order of 300X the rate of average worker pay, I’m fairly certain that companies can find the funds they need to pay employees more.
My main concern is what this whole shake up does to accelerate automation in traditionally people heavy businesses, and what that then does to the discussions of Universal Basic Income.Report
Way back during the ACA debate, the founder of Papa John’s stated that if he was forced to give all his employees healthcare, the price of a pizza would rise almost 30 cents.
Not 30 percent. 0.30 dollars.
For some reason, he thought this was a point that would resonate with the public and they would decry the thought of pizza employees daring to have healthcare.Report
This thread shows that there is an audience for the “wages must be kept low! Whip the peons!” The audience is right-wing misanthropes but it is an audience.Report
Not a pundit I normally agree with, but occasionally Reich gets it somewhat correct.
https://inthesetimes.com/article/robert-reich-chipotle-republican-party-labor-shortageReport
I’m in general agreement with you but it bears noting that CEO pay is basically a non-sequitur on this subject. You could take every dime of money the CEO of any given company is being paid, give it to the frontline workers and they’d probably not get enough dough to gas their cars up each month.
CEO pay is egregious for equality issues, for questions of corporate governance and questions about whether the shareholder voting/board of directors model is irredeemably captured by the monied set but it’s not enormously germane to the question of what the frontline workers are being paid.Report
One of the side effects of rising productivity is that the cost of any given item is comprised less and less of labor, and more and more on the cost of energy, transportation, and machinery.Report
I’m not convinced (yet) that there’s anything meaningful about the employment situation that won’t revert back to the mean in sufficient time.
So, my contrarian take is that if it *were* a meaningful inflextion point, it would behoove us to move past wages (which will fall) and into equity… keep wages where they are going to fall back to, but the truly innovative and bigger change would be to incent workers with fractional ownership of companies.
Yes, this is my hobby horse, and I’ll keep flogging it until we get it.Report
Well sure, but how to compel/convince any given company with its comfortable well paid and insulated c-suite to make such a dramatic change?Report
Tik Tok?
My Critical Economic Theory is that it isn’t enough to be a non-Exploiter, you have to be an Anti-Exploiter and I’m starting a movement.Report
Well heck, I’m on board with that, I bet Uncle Bern would be interested in your newsletter too! Is it strictly social pressure on companies or is the foul hand of the state allowed to be used to encourage/compel such a change?Report