In defense of retail

Last week’s decline in unemployment to 5.9 percent was widely celebrated in Washington. Yet even as they hail new jobs, too many policymakers have fallen into a habit of deriding the one sector most responsible for creating them – America’s service sector, including the retail industry. 

It’s bad enough when political leaders disparage retail jobs as low-paying and dead-end, but it’s inexcusable to disparage the millions of Americans who fill them. What makes matters worse is that many legislators and regulators seem bent on adopting policies that threaten to derail one of the few bright spots in the U.S. economy. 

{mosads}From proposals to raise the minimum wage to union-friendly National Labor Relations Board rulings that reverse decades of established labor law, retailers and other job creators are under attack in Washington. Many of these misguided policies are fueled by misperceptions about the role retail plays in our economy and the value of retail jobs.

This week the National Retail Federation is releasing two pieces of new research as part of Retail Jobs Week – an effort to refute the stereotypes and paint a more accurate picture about the industry and its impact.

According to one new report commissioned with PwC, retail is the number one private sector employer in the U.S. and a major driver of job growth. Retail currently supports 42 million jobs – nearly one in four American workers – generates $2.6 trillion impact on U.S. GDP, and pays $1.6 trillion in wages and benefits. The study found that retail supports more than 253,000 software developers and programmers, 176,000 in advertising, marketing, public relations and sales management, and over 203,000 designers. A little-known fact is that retail hires more engineers than Silicon Valley and more financial experts than Wall Street. 

If these don’t sound like the stereotypical “dead-end” jobs, you’re right. New research from Professor Jeffrey Dorfman, an economist at the University of Georgia, clearly demonstrates that careers in retail are financially rewarding – and often more so – as jobs in other industries.

According to Professor Dorfman, on average, career retail employees earn $2,582 per month compared to $2,667 for non-retail workers with similar levels of job skills. What’s more, experienced retail workers often earn more than their peers in other lines of work.

In Washington, few constituencies are more sacrosanct on both sides of the political aisle than small business owners. Yet while many associate retail with “big box” stores, the face of the retail industry is actually far more diverse. In fact, 98.6 percent of all retail companies are small businesses employing fewer than 50 people.

Policies like raising the minimum wage may sound good in the context of a political campaign, but they will only result in fewer entry-level jobs in industries like retail – jobs that often represent a critical first step toward a rewarding career.

Take the case of Traci Merrick. She started off working part-time at Crate and Barrel in Illinois and after a series of promotions, is now the general manager for the company’s flagship store in Chicago. And there are countless people that work in retail just like her – people that have made retail not just a job, but a life-long career. And they’re proud of their work.

It’s time for Washington to start thinking about Traci and stop relying on stereotypical misperceptions and plain-old inaccuracies about retail and other service sector jobs. If policymakers want to continue celebrating declines in unemployment, they need to stop ‘demagoguing’ job creators and eliminate barriers to growth and opportunity.

Shay is president and CEO of the National Retail Federation.


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