Retailers need women, no question. Women are key American spenders, as well as a large fraction of retail’s hourly employees. Yet women in retail, as in many industries, suffer a gender pay gap.
And while their situation is particularly acute in the retail sector, it may ultimately be hurting retailers themselves.
The power of the female consumer
While recent research has found that men are out-shopping women in online luxury categories, women in general remain America’s power-consumers.
Women browse online 20% more than men do, and spend more money online in most categories than men. Not surprisingly, women are more attuned to sales and are more likely to access coupons to save money.
The reason? Women spend not just on themselves, but also for their spouses, children, and parents.
“The list is long: in addition to buying for themselves, women buy on behalf of husbands, partners, kids, colleagues, adult children, friends, relatives, elderly parents, in-laws, their businesses and even their kids’ friends, to name just a few,” writes marketing expert Bridget Brennan in Forbes magazine.
“If somebody, somewhere needs a gift, chances are there’s a woman thinking about it; tracking it down; wrapping it; making sure it’s accompanied by a personal message and then arriving to the person on the appointed day. I sometimes think entire industries would collapse overnight if women stopped being so thoughtful.”
Women in retail
The retail sector is the second largest private employer of women, according to the U.S. Department of Labor’s Census Bureau. As of 2014, some 7.7 million women were working in large retail stores like Target, department stores, and wholesale clubs; in all, women hold nearly 50% (48.7%) of all U.S. retail jobs.
And of the sectors that employ mostly women, retail offers the largest gender pay gap, according to the Institute for Women’s Policy Research.
The pay gap
Research last year from the New York City-based Retail Action Project and Stephanie Luce of the City University of New York’s (CUNY) Murphy Institute found that the median gender gap between women and men is the difference between $9.00/hr and $10.13/hr. Women of color suffered the most, with 53% of African-American women and 77% of Latina women earning an hourly wage less than $10.
The other-than-pay gap
CUNY’s survey of 435 national retail chains also found that women were less likely than men to receive benefits or promotions, and were more often subject to the algorithm-optimized scheduling that can dampen compensation and make it difficult to care for their families, work other jobs, or go to school.
That may be one consequence of the dearth of women in retail’s top jobs, too, says Forbes’ Laura Heller.
“Women shop for, consume and prepare a majority of products purchased today. Every retail executive is devoted to finding out what makes her tick,” Heller writes. “Why haven’t more woman risen from the ranks of the 15 million U.S. retail employees to lead these companies?
“All this from companies that rely on woman as customers, that strive to understand and serve these women,” she continues. “Companies that are run by people who rarely walk a mile in her shoes.”
The result of the retail sector’s low pay, minimal benefits, and suboptimal scheduling is keeping women and their families in poverty, according to research by public policy economic think tank Demos. In fact, it means that many women working in retail must depend on public assistance.
“The continued gap between women and men in the workplace is both discriminatory and harmful to families,” says National Organization for Women president Terry O’Neill. “Equal opportunity in the workplace is important – especially in a growth industry like retail that is dominated by women. And this means not just fair wages but access to career advancement and benefits such as health insurance and retirement security. The fact that women are less likely to have benefits in these jobs has serious implications for women’s and children’s health, especially since many of these workers don’t even get one paid sick day a year.”
How wages affect retailers
Wal-Mart Stores Inc. shocked many with its announcement last month that it would increase its hourly wages. The move is widely seen as making the country’s largest retailer more competitive in an economy that is finally seeing unemployment steadily drop, and some even say it’s calculated to stave off a legislative boost in the minimum wage.
But there’s something else, too. Last year, when the economy was still feeling plenty of bumps, Wal-Mart cited cuts to food stamps as hurting its bottom line. That’s a sign that the act of poorly paying workers is robbing retailers themselves of more spending, some experts say.
By the same token, bringing retail jobs into the realm of a living wage — for which the Massachusetts Institute of Technology has developed a calculator — could greatly boost retailers’ own performance.
“If the nation’s largest retailers raised wages to the equivalent of $25,000 a year for full-time work, the wage gap would narrow significantly even if both men and women got the same raise,” asserts Demos senior policy analyst Amy Traub. “GDP would grow an estimated $6.9 to $8.9 billion solely from women’s portion of the raise, or $12.1 to $15.7 billion from both women and men, leading to the creation of 105,000 to 136,000 new jobs.”
A raise like that for retail workers would lift retail sales by $5 billion annually, according to Traub.