Trends and Challenges for Low Wage Earners in Retail

Matt Shelly
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The Washington, D.C., city council just passed a living-wage bill requiring large retailers to pay low wage employees a living wage of $12.50 per hour instead of the district's current minimum wage of $8.25 per hour. Walmart, which has plans to open six stores in the area, is fighting back against the bill, claiming it targets large retailers unfairly. The controversy has sparked a national debate about the challenges of low wage employees and brought more attention to retail compensation trends.


Retail salespeople had a median hourly wage of $9.94 as of May 2010, according to the Bureau of Labor Statistics. Some low wage employees earned less than $7.75 per hour working in retail stores. Labor-relations experts say this wage is not enough to support workers in many areas of the country due to the high cost of living in those areas. Researchers from the Massachusetts Institute of Technology say a single adult in Washington, D.C., should earn a minimum of $13.67 per hour to pay for necessities such as food, medical care, housing, and transportation. Someone living in Orange County, Calif., would need a living wage of $13.12 to make ends meet. With many states using the federal minimum wage of $7.25 per hour, some low wage employees are having difficulty paying for basic expenses.


Large retailers are fighting back against the attempt to implement a living wage for low wage employees in Washington, D.C. Walmart, AutoZone, Home Depot, Macy's, Walgreens, and Target have asked the mayor to veto the Large Retailer Accountability Act, calling its requirements arbitrary and discriminatory. In a letter to the mayor, the six retail giants indicated they would alter plans for store expansion within the district, which could result in a loss of needed jobs. Walmart executives insist they would have to increase prices to meet the requirements of the bill, but Scott Olster of "Fortune" says the average shopper's cost would increase by just $0.46 per shopping trip. With this small price increase, low wage employees would have the opportunity to earn as much as $6,500 per year more than they do now.


Although some low wage employees have difficulty making ends meet, there is some good news for retail workers. At the end of the second quarter, the PayScale Index showed a year-over-year wage increase of 1.5 percent in the retail industry. Because retail wages are closely linked to seasonal trends and the overall state of the economy, there was a decline in wages from the first quarter to the second quarter. Retailers have also been cautious about hiring more workers, as there are concerns about consumer spending in light of the recent government sequestration and payroll tax increase that took effect in January.


Whether you work as a retail manager or a salesperson, you must know what is going on in the industry and understand how it will affect your career. Although retail wages have increased since 2012, compensation and hiring trends indicate it could be a while before retailers start hiring more workers and increasing pay for those already in the industry. Retailers must rethink their compensation strategies, as stagnant wages make it difficult for low wage employees to make ends meet and leave very little money for the discretionary spending that keeps many retailers in business.


(Photo courtesy of digitalart /


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  • Melissa Kennedy
    Melissa Kennedy
    Thanks Marie. There are many people who are lobbying to require employers to pay a living wage. In cities like Washington D.C and Manhattan, there is current legislation under debate that would require any employer who operates in the city to pay a living wage. Companies like Walmart that pay low wages are bringing home record profits at the cost of workers and taxpayers who have contributed to low income health insurance and other benefits.
  •  Marie H
    Marie H
    I believe minimum wage for everyone should be at least $12 an hour no matter if it is big business or small business. I am unemployed was making 15.10 per hr now I cannot find a job where I can make ends meet. I would be happy making $12 as a cashier, etc. No person I know of can make it on minimum wage at this time and lots of people are going without food, medical and clothes for themselves and kids due to the low wages for minimum wage.
  • Melissa Kennedy
    Melissa Kennedy
    Wow! Thanks for all of the great comments. It's amazing how many people are working for minimum wage. Even with this pay increase, these workers will barely be able to support their families. Everyone else, across the country hates them for demanding more, but even then, it's not enough. There has to be some irony there.
  • Jennifer A
    Jennifer A
    I am shocked that the largest retail giants are arguing over an increase in wages. Even with an increase  to $12.50 hr, most people could barely get by with living necessities. I was making up to $14.oo hr. and working 40 hrs. a week and had trouble making ends meet. I live in Northern California, rent a home and  don"t have credit cards. That wage covered just my bills and barely had extra. I  even have a roommate to help with rent and household expenses.  
  • Shelly M
    Shelly M
    I live in Houston, TX minimum wage is only 7.25 $ per hour and retail will reluctantly pay that.  Who can survive on that?
  • Teresa I
    Teresa I
    I have worked in retail my whole life and have always made minimum wage I have suffered because of it no one can live on minimum wage but the retail industry doesn't care about people that work for them they never have and they never will you can work 2 or 3 jobs just to try to make ends meet and all you get done is working and no time for yourself or your family speaking for myself, no matter how hard I try to make a better life for myself the more I try the worse it gets I'm 50 yrs old $10,000 in debt and can't pay my bills I have no insurance no retirement nothing as of this moment I have no money at all not a dime to my name I work 25 to 30 hours a week $8 an hour and I'm drowning been trying to find another job no luck I've lived this way my whole life keep asking myself how did I end up this way I live alone no family just myself I have a college degree and that never helped me to get a decent job no one wants to work with you and give you a chance no one is hiring out there for real jobs with real benefits and real money and decent hours all there is is petty little jobs like mine only thing out there is part time jobs that don't pay anything no benefits nothing how do you expect people to live like this
  • Louis S
    Louis S
    It's about time that the individuals who uphold & depend on this industry start receiving better wages.
  • Barbara A
    Barbara A
    I work in retail, and the pay does not pay my bills,the pay rate is not $8.00 per hour and there is no other income but mines,I am afraid i will lose everything no increase in my pay this year 2013.It is very difficult.
  • John J. N
    John J. N
    I Agree. Minimum Wage Must Go Up. I Myself Have Been Out Of Work For Over A Year & A Half. These Retail Giants Make Billions A Year, But Don`t Care Whether Their Employees Can Survive Or Not. It`s Just Ridiculous. We Should Be Entitled To Be Able To Buy A Few Things For Ourselves Besides Just Paying Bills & Getting Necessities.
  •  Roy D. A
    Roy D. A
    I currently work for Sears Holdings in Hayward, CA and am only paid $6.00/hour.  I do not understand how a company the size of Sears gets away with paying less than the national minimum wage.  Despite receiving a paltry commission, why aren't they forced to adjust the commision paid and insist their employees receive the minimum wage, as a minimum.

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