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Obama and Retail: All the Wrong Friends
The Examiner
Billy Wharton

January 27, 2011
View the Original Article


Retailers seem to be the one industry group most pleased by President Barack Obama’s recent State of the Union speech. After years of being maligned as the problem of the new service-based economy, this crowd is quite easy to please. Even one sentence will do. Yet, for the many New Yorkers who are stuck in the low wage cycle of retail work, the notion that this sector of the economy will produce anything remotely resembling a “good job” is laughable.

The State of the Union is a finely calibrated exercise in political theater. Each word is closely measured for its potential impact. Nothing happens spontaneously. Journalists who received an early version of the speech can attest to the fact that Obama’s speech was more an exercise in recitation than thinking on his feet.

All the Wrong Friends

Retailers were really only interested in one line of the recitation. “Just think of all the good jobs,” the President stated, “– from manufacturing to retail – that have come from those breakthroughs.”

Retailers ran with it. The National Retail Federation (NRF) stated emphatically in a post-speech press release that, “We are pleased to see that President Obama recognizes that jobs in the retail industry are good jobs and important to the economy.”

The NRF also celebrated Obama’s announcement of reductions in corporate tax rates, the new free trade agreements and reductions in regulations, but they were really enthused at finally being recognized as the generators of so many “good jobs.” Finally, the recognition they deserved.

Or did they? Data on the national and local levels suggests otherwise. Far from good jobs, the retail sector seems to be a serious part of the problem – contributing low wages, using anti-union tactics and creating cycles of poverty.

Retail and the Unions

A few days prior to the State of the Union, the US Bureau of Labor Statistics released its annual report on union membership. The report offered two interesting pieces of information.

First, it really paid to be working a union job. The median weekly income of a full-time union worker was $917 while a non-union worker received $717. Unfortunately, fewer and fewer workers are able to take advantage of this pay upgrade. The unionization rate declined to 11.9% in 2010 down from 12.3% in 2009.

Some industries were more notorious for being resistant to unions than others. Retail is one of them. A remarkably low 4.7% of workers in the retail trade belong to unions and that is down from 5.3% in 2009. This number is far below the national average for unionization and even dwarfs the overall figure for the private sector which stands at 6.9%.

So if being in a union means higher wages. And retail workers are not in unions. Where are the good jobs?

The NYC Example

Certainly not in the retail sector in New York City. A 2008 report created by the Fiscal Policy Institute indicated that some 44% of all retail workers in the City receive less than the $10 an hour that is generously considered to be a living wage.

Further, the retail sector itself is not, as many popular presentations suggest, made up of hip college-age students looking to pick up a little extra spending money. Whole families live inside this low-wage economy. The same report stated that 36% of retail workers are their family’s sole provider and 900,000 children have parents who are retail workers.

A local group aiming to transform this situation is the Retail Action Project (RAP). RAP works to educate retail workers about their rights and to develop public campaigns that highlight the plight of these workers.

RAP has been a prime mover behind the Living Wage NYC coalition, a group pressuring New York City Mayor Michael Bloomberg to sign on to legislation that would require all employers that receive public funding to provide living wages. Bloomberg, in part at the behest of retailers, has balked at the bill and a long struggle is on the horizon.

As the fallout from the State of the Union begins to subside, President Obama might do well to follow a typical piece of advice that a parent might provide to a teenager. Be careful who your friends are. Obama seems to have picked up a new one in the NRF and, in the process, made a few million enemies in the form of retail workers able to see through the song and dance about “good jobs.”