Facebook’s Sheryl Sandberg may want professional women to “lean in,” but the truth is that a majority of working women in America are stuck in low wage work, fighting a daily battle to make ends meet. The retail sector is one of the top industries that employs women and over the next decade, it will be the second largest source of new jobs in the United States. A new study released by the progressive think tank Demos concludes that the increasing wages in the retail sector is necessary to give the economy a much needed boost.
Traditionally retail jobs are low wage work, with the average retail worker, making about $10.00/hour. “It has become conventional wisdom that retail workers must be paid low wages. Yet [the Demos] study, adding to a growing body of research, demonstrates that retailers could provide the nation a needed economic boost by paying higher wages, while remaining profitable and continuing to offer low prices.”
The Federal minimum wage currently stands at a dismal $7.25/hour, which works out to only $15,000 annually and is not nearly enough to support an individual—let alone an entire family. A typical woman working in the retail sector on average makes only $10 an hour, which is about $4 less than a man working in the same position.
The Demos study “assumes a new wage floor for the lowest-paid retail workers equivalent to $25,000 per year for a full-time, year-round retail worker at the nation’s largest retail companies—those employing at least 1,000 workers. For the typical worker earning less than this threshold, the new floor would mean a 27 percent pay raise. Including both the direct effects of the wage raise and spillover effects, the new floor will impact more than 5 million retail workers and their families.”
By increasing the floor of low wage work, a new energy would be put back into the economy, as workers with more disposable income re-engage as consumers. “More than 700,000 Americans would be lifted out of poverty, and more than 1.5 million retail workers and their families would move up from in or near poverty,” according to the study and higher wage floor, despite Republican talking points which conclude that increasing the minimum wage will kill jobs.
In fact, the increased purchasing power an increased wage would give low wage workers would generate up to $5 billion in annual sales for the retail sector. Many of the low wage retail workers would end up spending their additional earnings in the stores that employ them, thereby returning those revenues to the company.
At this year’s “State of the Union” address, President Obama called for a “year of action,” which acknowledged Congressional gridlock and laid out a plan for executive action on the minimum wage and other economic priorities. He again called for an increase in the federal minimum wage and reiterated the administration’s message that “when women succeed, America succeeds” in the hopes that private sector employers feel compelled to take the initiative to raise their workers raises without congressional action. These increases must also coincide with an expansion in policies that increase a worker’s work-life balance and ability to support their families with borth time and money.
On June 23, 2014, the White House, with co-sponsors the Department of Labor and the Center for American Progress will host the White House Summit on Working Families. The event is the culmination of a series of events the White House Council on Women and Girls have been hosting events around the country to talk to employers and workers on the importance of creating a 21st century workplace that works for everyone.
The key component to any growing economy is a strong and well supported labor force. As more women enter the workforce, many industries have adjusted and made their quality of life policies more attractive to women and men raising families. The administration hopes that the companies that are out in front, in terms of flexibility and paid leave, set an example for the rest of companies. “A woman’s contribution to the family income is more important than ever before and we want to use peer pressure and we do that through increased transparency,” a senior administration official told EBONY.
In addition to an increase in wages, the White House is hopeful more private sector employers will prioritize work-life balance for their employees who are raising their families. According to the Obama administration, low wage work and balancing family in all sectors is everyone’s issue. “This isn’t only about women,” said the official. “Men also need to have a better balance in their life as well. Our Summit, will highlight the best practices and focus on competitiveness among the next generation of workers. We want to see what works and implement it. We don’t want to reinvent the wheel. Thankfully, there is plenty of research to help guide us, to help figure out what works best. (It is) important for companies to have a flexible work-life balance. In fact, these are the most productive companies.”
As our society evolves, men and women are beginning to play equal roles at home and at work. “We want people to be able to go to the job where they are the most productive and their talents are going to be best utilized. The Affordable Care Act was an important first step, because women can’t be charged more and people have more freedom to choose a job they want to do, instead of working a job because it gives them health insurance.”
According to senior administration officials, work-life balance has been prioritized as an issue because there are a large number of working parents in the White House who are struggling along with the rest of America to perform at the high level at work and at home. The best companies have work-life balance as a priority and as a result have higher profits and lower turnover: “The cost of recruiting and training someone is high and so it’s beneficial to companies for them to prioritize retention and making sure that the employees are happy.”
In order to be happy, workers need to feel like their commute to and from a job isn’t a daily cost-benefit-analysis. With the costs of childcare skyrocketing, many low wage workers decide daily whether it’s even worth it economically to go to a low wage job. Often times with cutbacks in hours and inconsistent schedules, parents of small children are spending more on childcare than they make in a day’s work.
“Some people are locked into low wage jobs who have just as much of a need for flexibility but not as much power to advocate on their own behalf,” says another senior administration official, who is hopeful that private sector companies will respond to peer pressure and increase wages and work-life balance of its workers, which will improve the economy for everyone at every level.