Financial Insecurity Plagues Retail Workers: Is There A Cure?
A recent study from MetLife revealed the alarming depth of money worries among retail employees. Just 54% of these workers are confident about their finances, with retail employees showing more stress than those in IT (79%), construction (79%), manufacturing (68%) and the public sector (63%). Retail workers rated personal finances as their top source of stress in the 2019 Annual U.S. Employee Benefit Trends Study, and other findings fill in the grim picture:
- 58% of retail workers live paycheck to paycheck;
- 50% reported having a savings cushion of three months; and
- 58% of retail workers expect to postpone retirement due to their financial situation (compared to 52% of all Americans surveyed).
The Retail TouchPoints editors discuss some of the causes behind these high levels of financial insecurity, as well as the potential for more stress if the U.S.-China trade war heats up further.
Adam Blair, Editor: It’s not exactly surprising that retail workers feel precarious about their finances compared to employees in other industries; after all, many retail jobs, particularly at the entry level, are minimum wage positions. Stress about money for these people has more to do with a national minimum wage (stuck at $7.25 per hour since July 2009) that is alarmingly out of step with current living expenses. I realize it’s cold comfort to retail workers that many others are in the same situation, but the hard fact is that some of these financial insecurities will only be mitigated when the country’s political leadership changes. What’s more disturbing is that there’s a strong chance things will get worse before they get better, particularly if the White House Occupant goes ahead with his threatened 10% tariffs on Chinese-made goods. These are fortunately on hold for now, but anyone watching the political scene over the past three years has learned that the only thing we can count on is uncertainty. If retailers have to raise prices and that slows down holiday spending, many of these employees could go from minimum wage to no wage at all.
Glenn Taylor, Senior Editor: While the complete end results of automation have yet to be determined, I wonder how much stress this particular angle is putting on retail employees. Uncertainty about a job’s very existence simply can’t be ignored, especially since it can actually affect the performance of employees. Regardless of whether jobs actually end up being replaced, or simply repurposed, I’m sure there are plenty of long-term retail employees wondering how that affects their pay. In fact, 57% of retail workers say that new technology would have a negative impact on the quality of their jobs, such as reducing their wages, hours and benefits, according to a survey at The Fair Workweek Initiative. All these concerns undoubtedly make worse an issue that most of these employees have — inconsistent and unpredictable working hours.
Bryan Wassel, Associate Editor: The combination of generally low wages with international volatility is a bad one for retail workers, and the feast-or-famine nature of retail work can only exacerbate the problem. Associates can expect more hours (and therefore more pay) during the holiday season, but during the slow times or an economic downturn they might not be able to hit 40 hours a week. This scarcity is especially prevalent given the number of venerable brands downsizing or shutting their doors; even if the retail space as a whole is healthy, that doesn’t mean much for the people who have been working jobs in malls for years, watching their companies shutter hundreds of locations and lay off thousands of their colleagues. This is another area where tariffs and trade wars may weigh on any sense of security, because if prices go up and people in general buy less, the frontline of retail workers will be among the first at risk of losing their jobs.