Retail Workers Are Trying to Escape the ‘Merry-Go-Round’ as Jobs Disappear and Prospects Dim
By: Alana Semuels
Posted: February 7, 2020
Sue Reich worked for 27 years at Shopko, a Midwest retailer that sold clothing, shoes, housewares, and electronics, until, one day, her employer didn’t exist anymore. Shopko, which employed 14,000 people across 26 states, filed for bankruptcy last year and closed all its stores last summer after it couldn’t find a buyer.
The same story is happening across the country as the retail apocalypse continues. In 2019, retailers including Payless ShoeSource, Dress Barn, and Barney’s closed 9,200 stores; Payless alone cut 16,000 jobs. Already this year, chains including Macy’s, Pier 1, and Fairway have announced closures and layoffs. Employment in retail in January was down 8 percent from the same time last year, according to new Bureau of Labor Statistics (BLS) data released Friday morning, at the same time, jobs in transportation and warehousing, industries critical for e-commerce, were up 28 percent. Department stores have shed 241,000 employees in the last five years, according to BLS data, and clothing stores cut
But there is no national outcry as workers like Reich lose their jobs, no movement to protect the people being thrust out of work, calling for an end to store closures, or to find funding to ensure these workers end up in better jobs. Sure, there was a @SaveBarneys campaign, but it traded on nostalgia, featuring vintage TV spots and magazine ads, rather than on concern for workers, and it failed. The high-end retailer, which filed for bankruptcy last year, was sold to Authentic Brands Group, which started closing and liquidating stores in November.
Compare this with the commotions that have surrounded smaller job losses in industries such as manufacturing or mining. When Carrier, an air-conditioning company, said it was moving 1,400 jobs to Mexico, then-candidate Donald J. Trump seized on the issue in his stump speech and eventually struck a deal to keep some of the jobs in Indiana. “We hear politicians talk about the loss of factories and manufacturing and mining, but there has not been the same level of outcry around the loss of retail jobs,” says Nicole Mason, the president of the Institute for Women’s Policy Research, a think tank based in Washington, D.C.. “I would conjecture that one of the reasons we’re not talking about it is that it impacts predominantly women.” Nearly 80 percent of cashiers were women in 2018, according to IWPR data. As online shopping grows, and employment in warehouses grows, retail jobs for women are shrinking, while men’s jobs are growing – an IWPR analysis found that the retail industry lost 54,300 jobs between 2016 and 2017; over that time, women lost 160,300 jobs while men gained 106,000.
In the past, when factories shut down or jobs moved overseas, the government stepped in to protect workers who lost their jobs. The federal Trade Adjustment Assistance (TAA) program, first authorized in 1962 and expanded in 1974, 2002, and 2009, assists workers whose jobs have been displaced because of trade; it offers training subsidies and a weekly income for people who have run out of unemployment benefits. Workers over 50 who find new jobs at a lower wage than they’d been making can also receive money from a wage insurance program to supplement their new income. But those funds aren’t available to retail workers. “Because they weren’t trade-affected, they can’t get that monthly stipend,” says Liz Skenandore, a career services specialist at Great Lakes Training and Development in Wisconsin, who deals with a steady flow of laid-off retail workers. “It would be ideal, if there was a ‘you were affected due to the internet’ category.”
Similarly, in the 1980s, after a series of factory shutdowns in the Rust Belt, a group of Ohio legislators pushed for the WARN Act, which required employers to give advance notice of mass layoffs and plant closings and to pay back wages if they did not provide that warning. Around the same time, under pressure from unions, Congress created Manufacturing Extension Partnership programs, which use federal, state, and private dollars to retrain displaced manufacturing workers for jobs in high-demand fields.
Another thing Sue Reich didn’t receive when she was laid off from Shopko: severance pay. She spent decades working for the company, and says she was told that if she worked through the store’s liquidation, she’d receive severance. But Shopko never paid Reich or workers like her anything beyond a small sum for vacation days they hadn’t taken. “It’s been challenging every month,” says Reich, who scrambled to find another job and now works part-time at a credit union, though it has not turned into full-time work as she had hoped. Her husband, a saw operator at a factory, is working overtime so the family can pay its bills. In contrast, the thousands of workers who have lost jobs at places such as General Motors and Ford over the past year have received months of severance pay based on the amount of time they had worked at the companies. Sun Capital, a private equity firm that owned Shopko, did not respond to TIME’s request for comment.
It’s no accident that there are government policies protecting workers in industries such as manufacturing. These are industries that have long been unionized, and in the 1980s and 1990s, as the United States negotiated trade deals such as NAFTA, unions worked with elected officials from districts that were in danger of losing factories, says Kate Bronfenbrenner, a professor at Cornell University’s School of Industrial and Labor Relations. They made sure that any trade deal included programs to help workers who would be displaced. To sell the trade deal, Congress had to agree to fund worker retraining and subsidy programs. Lawrence Katz, a Harvard economist who served in the Labor Department under President Clinton, says the administration tried to introduce a universal dislocated worker training program in the 1990s that would have helped retrain any displaced worker, but couldn’t get widespread support.
But retail is disappearing not because of a trade deal, but because the way consumers buy things is changing. Tech companies like Amazon didn’t have to negotiate with Congress to be able to sell things online; they could just start doing it. That’s meant that there is no constituency that must make sure retail workers end up on their feet in order to get a bill passed. “When people lose their jobs in the service sector and retail sector, those are women and people of color, and there is no Congressional constituent for them like the ones that were negotiating the trade bill,” Bronfenbrenner says.
Factory shutdowns are visually jarring; hulking. Abandoned factories dot landscapes across the United States; in Detroit, entrepreneurs made a business out of giving tours of the ruin. Retail’s meltdown is also visually jarring, but is hidden inside America’s malls. TIME recently walked through a mall in Green Bay, Wisconsin that had lost a Shopko and Payless store, and there were twice as many vacant stores as operating ones. The lights were off in large sections of the mall that were blocked off with crime tape, and the only foot traffic was women in workout clothes walking the long, wide corridors for exercise in the cold winter months.
As more sudden retail layoffs happen, Jack Raisner, a professor of law at St. John’s University, says he sees an opening for states or the federal government to pass more protections for retail workers. He recently helped New Jersey pass a bill that updates the WARN Act to apply to more retail workers, which he hopes will inspire similar bills in other states. The New Jersey bill, which was signed into law last month, was a response to mass layoffs that left hundreds of Toys “R” US workers who had worked through the holidays with the promise of severance without any such pay, he says. It says that any company that employees at least 50 people in the state is required to give 90 days notice of a mass layoff; without such notice, it must pay all laid-off workers at least four weeks of back pay. If they don’t give 90 days notice, employers must also pay terminated employees one week’s pay for every year they’ve worked there. “Putting people out on the street after years of service without anything is a horror and a tax on the public,” says Raisner. He also worked with Senators Sherrod Brown of Ohio and Chuck Schumer of New York to craft the Fair Warning Act of 2019, which would update the WARN Act nationally. The bill was introduced in November. “The anxiety over these layoffs is unabated despite what everyone says about this economy,” Raisner says. “I think there’s a real grassroots movement interested in something happening about this.”
Though business owners in New Jersey say that the state’s new law will deter companies from coming to the state, broader protections for retail workers in the form of retraining or re-education programs could be good for the larger economy. As technology changes the nature of work, people who get more education or increase their skills are best positioned to do the types of jobs that computers and robots can’t yet do. This in turn grows the nation’s productivity rate, and its economy. Now, technological change is happening faster than ever before; McKinsey estimates that by 2030, growing automation will mean that as many as 375 million workers (14 percent of the global workforce) will need to switch occupational categories.
In retail, where the average hourly wage for people who aren’t managers is just $16.86, laid-off workers don’t have the resources to stop working for six months or two years to get a certification or degree in another industry. “For the most part, these workers are living paycheck to paycheck, and the idea of being without a job is scary,” says Anthony Snyder, the chief executive officer of the Fox Valley Workforce Development Board in Northeast Wisconsin, which helps laid-off workers find new jobs. That’s why many retail workers are on what Snyder calls the “retail merry-go-round,” where their employer dissolves or closes down, they find another retail-related job, and then get laid off from it, too.
Amanda Padgett has been on this merry-go-round for years. Padgett, a 36-year-old mother of two, was laid off from Shopko last year. Before that, she worked at an ice cream store and a call center for a national retail chain that laid off all its employees. With each layoff, she has wanted to go back to school and get a degree in something that would get her out of retail-maybe learning to become a medical coder or a radiology tech. But as long as she needs to pay the rent, put food on the table and take care of her kids, she needs to bring in a paycheck, so she finds herself in another low-wage job, making minimum wage, until it, too ends. When she heard the rumblings last year that Shopko was closing, Padgett says, “all I could think was, ‘here we go again.'”
* * *
Other countries have much more robust safety nets for laid-off workers, whether in retail or other fields. In Canada, workers whose jobs are eliminated in mass layoffs are guaranteed termination pay if their employer doesn’t give at least eight weeks’ notice, and severance pay if they have worked for an employer for five or more years. In European countries like Sweden, laid-off workers receive financial support, a job counselor, and money for retraining, provided they are members of a union, which about 70 percent of Sweden’s workers are.
In the United States, those types of strong supports are almost only available to workers in a union, which is a shrinking share of the workforce (just 10.3 percent of American workers were members of a union in 2019.) But those unionized workers are reaping the benefits. Some partnerships between labor and management have started training low-wage workers for new positions before they even lose their jobs. In the Building Skills Partnership in California, a local union struck a deal with dozens of businesses, agreeing that the businesses could take a small amount out of workers’ paychecks to fund retraining efforts. UNITE-HERE, a union that represents service workers in Las Vegas, bargained with casinos such as MGM Resorts International to require that they alert the union to new technology being used and guarantee job training for all displaced workers.
The question now is whether the government will step in to protect retail workers as it did manufacturing workers, even though retail is not unionized. Economists largely agree that retail is about to go through what manufacturing did, says Anthony Carnevale, the director of Georgetown’s Center on Education and the Workforce. Manufacturing was once one-third of the workforce; now it’s eight percent. “There’s no question,” he says, “that retail is up next.”