Caring for retail workers this holiday season

Nov 25 2020

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Black Friday and Cyber Monday: a time when hundreds of thousands of Americans will descend on stores across the country or log on to the internet looking for a great deal on a new TV or officially start their holiday gift buying. Black Friday and Cyber Monday are able to happen because of one powerful driving force: humans. From face-to-face retail employees to warehouse packers to delivery workers, global economies function because of a hardworking, low-paid sector of people making it all a reality. 


In the days after Thanksgiving, when we think about what we’re thankful for, and in the run-up to Christmas, when we consider who we want to give back to, we have an opportunity to better value this essential workforce – the people out there on the front lines, in the low paid or gig economy. Those who work long hours, or come face to face with customers all day during the COVID-19 pandemic. Let’s take a moment to think about the future of this sector -  how to make it not just base-level fairer in the short term, but brighter, and more beneficial long term. 


Opportunity for change


Throughout 2020, the retail sector has adapted to the pandemic, implementing distancing and reinforcing web operations. We’ve seen online retail behemoths hugely benefit from the dramatic change in how we are all able to shop. Amazon, which owns 38% of the e-commerce market, experienced a 60% increase in consumer spending between May and July 2020 compared to the previous year. By October, they reported a 200% rise in quarterly profit. Walmart and Target, deemed essential services while many smaller businesses were not, also reported record profits as Americans turned to these one- stop shops to reduce the number of stores they visit and to invest in electrics and home improvements to fill their free time.


The booming of these businesses has in some ways been positive – it’s created jobs – but we’ve seen widespread job losses in other areas. One survey found that a quarter of Americans experienced a job loss or a pay cut due to COVID-19. Unemployment was at 4.8% when Trump took office in January 2017, hit a record low of 14.7% in April 2020, and was recently found to be at 6.9%. Falling profits and fewer jobs in a recession means that wage violations spike as low paid workers become increasingly vulnerable when their income wasn’t great to begin with. A state-by-state survey cited in The New York Times found that “Nationwide, essential employees earn an average of 18.2% less than employees in other industries.” 


Opportunities and pay for this sector of the workforce have been impacted by the disappearance of unions, and the offshoring and automation of manufacturing over time. But COVID-19 has presented newer, bigger challenges: Forced to share equipment, or interact with customers without adequate PPE, millions of workers have been put at risk, and yet feel that they have to continue to work in order to economically survive. This bind disproportionately affects African Americans, who are currently more likely to experience unemployment and are statistically paid less in the US. It particularly affects Black and Hispanic female workers, who make up a large portion of retail workers. 


With coronavirus cases now rising across America once again, retailers are anticipating another rush from shoppers who fear a second lockdown and are attempting to stockpile. On Black Friday and Cyber Monday, this challenge comes into even sharper focus because these days mean a massively increased workload. In retail fulfillment centers, people are working longer shifts behind the scenes. On store floors, workers are likely to come into contact with even more shoppers. All of this makes wearing a mask, sanitizing your hands correctly, or even avoiding stores important if you’re a consumer, but we also need to see big, structural changes that will value and protect these workers better. 


Valuing our workforce


If there’s one important change we need to see short term, it’s fair pay. Many US retail giants paid COVID-19 related wage increases, benefits, and one-off payouts earlier on in the pandemic, which is great, but according to The New York Times, a lot of companies have now ceased to continue the effort. A few months back, companies felt they needed to incentivize workers who were off sick or quitting, but since the $600 a week governmental employment benefits ended in July, many people will take whatever wages or hours they can get. Companies like Best Buy who raised wages by $2 in July and Home Depot who have vowed to raise wages are setting a good precedent. Overall though, an increase in federal minimum wage would improve things across the board.


We also need legal shift lengths and better scheduled hours. Some retail and warehouse workers are working 11-hour shifts with short gaps in between, others can expect to have their hours suddenly cut after the holiday season with little warning. The Brookings Institute reports that more fixed hours would have multiple life-enhancing benefits for people working in the retail sector: knowing when you’re working means more reliable income, it means you can better arrange childcare, and it improves access to health insurance – overall, it has been found to improve workers’ mental health. Research has also shown that when workers have scheduled hours, sales and productivity go up, meaning everyone’s a winner. 


Lastly, in the face of rising COVID-19 rates in America, we need to see good care taken for this workforce. “As holiday shopping begins this Thanksgiving, we are already seeing a huge surge of customer traffic,” Marc Perrone, International President of United Food and Commercial Workers (UFCW) – a union which represents 1.3 million workers in grocery stores, food processing, meatpacking, and retail – told the press. “Unless we take immediate actions [...] many more essential workers will become sick and more, tragically, will die.” A powerful combination of consumer education, mandatory mask wearing, free PPE for frontline workers, and rapid and regular testing for workers would make everyone safer – employees, their families, and customers.


A transformative future

 

These changes have to potential to transform millions of American’s lives and pave the way for future generations that can thrive under better income equality. But we do not have to stop there. Beyond these changes, we need to be looking into the future and thinking about how best to equip the workforce. Raising wages is important but it can lead to even more companies turning to automation and therefore increased unemployment. The digital revolution, meanwhile, is creating a widening skill gap. We urgently need to think about how to solve this crisis – and one clear answer is mass upskilling. 


This is why at XPRIZE we’ve launched XPRIZE Rapid Reskilling, a $5 million dollar, 30-month competition to quickly reskill under-resourced workers for the digital revolution. We are searching for the innovators who can create technology that will reinvent job training, a solution that can eventually be rolled out far and wide in order to nurture underdeveloped talent and equip American adults with the skills to do many different types of jobs. Economically, this will not just benefit individual Americans, but benefit all of us, because it has the radical potential to lower unemployment not just back to where it was in 2016, but even further. 


In the meantime, the good news is that there’s been an uptick in attention to the plight of retail workers and we’ve seen strong support for bills to increase minimum, a support-base that has grown throughout 2020 as people become more aware of how integral low-paid workers really are to a society that thrives. If the current federal minimum wage in America of $7.25 per hour (set in 2009) reflected inflation, it should be over $10. 


This support base needs to keep growing as more and more of us appreciate retail workers over the holiday season. It is important to empower the workforce with money and skills, but real change will come with appreciation and respect. Valuing workers is not just an economic issue but a social justice issue – anyone who cares about equality should care about the treatment of the workforce. 


Learn more about the $5M XPRIZE Rapid Reskilling competition at rapidreskilling.xprize.org