Retail industry fosters racial income inequality, according to NAACP, Demos study
By Olivere Perkins
The Plain Dealer, CLEVELAND, Ohio, (6/2/15) – Black and Hispanic retail workers make less than their white counterparts and are presented fewer opportunities to move up the ranks, according to a report released today.
A “racial wage divide” exists among front-line retail workers, such as salesclerks and cashiers, says the report by the NAACP and Demos, a progressive think tank in New York City.
Meanwhile, a representative of the National Retail Federation criticized the study, saying it promotes the views and agenda of organized labor rather than presenting balanced research.
Among the findings of “The Retail Race Divide: How the Retail Industry is Perpetuating Racial Inequality in the 21st Century” are:
– Black and Hispanic full-time salespeople earn just 75 percent of what their white counterparts make, an annual difference of up to $7,500.
– Black and Hispanic full-time cashiers earn about 90 percent of what white counterparts make, an annual difference of $1,850.
– Seventy percent of black and Hispanic sales workers — both full- and part-time — earn less than $15 an hour, compared to 58 percent of their white counterparts.
“I think this is a particularly egregious practice,” said Catherine Ruetschlin, a Demos senior policy analyst, of the wage disparities.
“Even for the same job, a black worker, who is working as a cashier, is getting paid less than a white worker, who is standing 10 feet away at another register.
“This is profit-maximizing to employers, who are capturing the institutional discrimination in the labor market for their own advantage,” she said.
“They don’t have to be deliberately or expressively racist to practice this.”
Bill Thorne, senior vice president of the National Retail Federation in Washington, D.C., disagrees with the report’s findings.
“Retail is color blind, providing jobs and opportunity for millions of Americans regardless of race, age, background or experience,” he wrote in an email. “Retailers work every single day to ensure that their workforce can achieve personal and professional gain to the benefit of the employee, their families and the communities where they live and work.”
The racial wage gap in retail is significant because, for the most part, many of the jobs don’t require education or special training, said Ruetschlin, who did the report with Dedrick Asante–Muhammad, the NAACP’s senior director of economic department and executive director of the Financial Freedom Center. As a result, she said it is difficult to explain away the disparities between black and Hispanic workers and their white peers based on factors, such as education or preparation levels, which are commonly cited as the reason for disparities in more skilled occupations.
For Ruetschlin, lack of opportunity is the reason for the wage gap between black and Hispanic retail workers and their white counterparts. She highlights some of the report’s other findings, which are based on analyses of Labor Department and Census Bureau data:
Black and Hispanic workers are underrepresented in management. Black workers make up 11 percent of retail employment, but 6 percent of management positions. Hispanics make up 16 percent of retail, but 8 percent of management. White workers make up 80 percent of retail, but 88 percent of management.
Black and Hispanic workers are overrepresented as cashiers, the lowest paying retail sales position. One in three black and Hispanic workers are cashiers, contrasted with one in four of white retail sales workers.
Black and Hispanic workers are more likely to work part-time when they want full-time work. Forty-five percent of black workers and 42 percent of Hispanic workers in retail are involuntary part-time workers. Only 29 percent of white workers have part-time hours though they want full-time employment.
Black and Hispanic workers are more likely to be poor. Nine percent of the total retail workforce lives below the poverty line. However, 17 percent of black retail workers and 13 percent of Hispanic retail workers live in poverty.
“That means even when black and Hispanic workers get their foot in the door in this industry in entry-level positions, they don’t face the same opportunities to move up and turn those kind of dead end jobs into a career,” Ruetschlin said.
Thorne is suspect of the report because he says it espouses a certain “agenda.” The report does support some issues raised by key players in the low-wage workers’ movement, including unions seeking to organize many of these workers. For example, the report supports a $15 minimum wage. It also calls for an end to “on-call, unstable and unpredictable schedules.”
“The study is less of an academic, independent review of an important topic and more of just another effort by supporters of organized labor to rehash a one-sided point of view under the guise of ‘research,'” Thorne wrote in an email. “It does not appear that the authors bothered to talk with retailers to ensure accuracy in their conclusions, but instead used questionable citations that merely justified what they want readers to believe.
“The primary inequality identified in this ‘study’ is between real research and an agenda-driven narrative,” he wrote.
Ruetschlin stands by the report, which she said is driven, not by opinion, but by data. She said retailers shouldn’t deny that such inequities exist, but become “fully committed to the idea of equal opportunity and a fair chance in the labor market.”
She said because of recent events, she is hopeful retailers would be open to addressing such disparities. For example, Ruetschlin mentioned Walmart’s decision this year to raise its hourly minimum wage to $9, which will impact about 600,000 workers at the world’s largest retailer.
“With that came the acknowledgement that paying higher wages at the bottom will reduce turnover, improve workplace productivity, reduce replacement costs to the firm, and provide for a happier more stable workforce,” Ruetschil said.
“This embraces this new-found attitude among retailers that lifting wages can be a benefit to them, and also points to how there remains an ethical and responsible decision that needs to be made even once those raises are enacted,” she said.