The Gender Wage Gap in Retail is More Than a Gender Issue

by Gwen Berumen

Thanks to a study conducted by the public policy organization Demos, we now know that women in retail are earning four dollars less than their male counterparts. In order for them to eliminate the gap, they would have to work for 103 more days.

This disparity costs women $40.8 billion yearly.

The vast majority of retail employees are women – the industry employs 7.2 million women. Over 1 million of those are on the brink of poverty. And, if this trend continues, 100,000 more female retail workers will be in poverty by 2022.

Trends like these persist because the burden placed on women’s advancement often traps them in lower paying jobs.  An economy that relies upon the millions of women working in low paying jobs with unstable hours will ultimately do more harm than good.

Since the retail industry employs so many women – and since it is one the fastest growing sectors – it is especially important in determining the nation’s economic future. A future built upon economic exploitation, however, is one that is built to fail.

The Demos study observed the following:

Wages that raise families out of poverty, or push them into it?

Today: 1.3 million women working in the retail industry live in or near poverty (defined as within 150 percent of the poverty line).

If the nation’s largest retailers raised wages to the equivalent of $25,000 a year for full-time work, 437,000 women working in retail today would see their earnings lift them above the level of poverty or near poverty. Family members they help to support would also benefit: altogether nearly 900,000 people would be lifted above the level of poverty or near poverty by a raise for women working at the largest retailers.

Wages that boost the economy, or sink it?

Today: the pay gap between men and women in retail costs women an estimated $40.8 billion in lost wages annually. Lost wages to women are a drag on the economy, reducing consumer demand and costing jobs.

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. 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.

Schedules that lift up women, their families, and communities, or undermine them?

Today: Nearly one in every three women working part-time in retail wants to be employed full-time. And even full-time status is not always a guarantee of sufficient hours. Part-timers and full-timers alike must contend with just-in-time scheduling practices that make it harder for women to work their way out of poverty and impose steep costs on the public, taking a toll on public health, education, and opportunity for the next generation.

If the nation’s largest retailers improved by offering sufficient work hours and more stable, predictable schedules, another major obstacle for women trying to work their way out of poverty with retail jobs would be removed and it would help to improve public health, education, and opportunity.

Large retailers can afford to improve women’s jobs—without big price increases.

The additional payroll costs would represent a small fraction of total sales. The cost of a wage increase to $25,000 a year for full-time work, for both men and women in retail amounts to $21.5 billion, or less than 1 percent of the $4.3 trillion in total annual retail sales. Alternatively, it represents 4.1 percent of 2012 payroll for the retail sector.

Using profits to pay for better wages and schedules would be a more productive use than the current trend toward stock repurchases. In 2013, the top 10 largest retailers spent $26.3 billion on stock repurchases, billions more than the $21.5 billion all large retailers could have productively reinvested in their workers.

The potential cost to consumers would be just cents more per shopping trip on average. Calculations from our previous study find that if companies pass half of the costs of a wage increase on to customers, the average household would pay just 15 cents more per shopping trip —or $17.73 per year.


Since Seattle just raised their minimum wage, we can only hope that other states do the following. However, we must also think about the complicity that these corporations have in larger labor exploitation; it is not just the job of the state, but also of the individual companies themselves.

It is important that women understand how much (in dollar figures) they are being underpaid. Additionally, I would have liked to see this study include stats about women of color, transwomen, etc. Calculating this for women, as a nebulous category, doesn’t help women of color, transwomen, or disabled women who are almost never represented.

With all of this information out and in the open, I hope that board meetings will talk more about working wages for women, and less about bonuses. Additionally, I hope that studies like these bring into account the constant erasure of marginalized women, and how we can work to make these kind of studies more intersectional. 


Photos via and Huffington Post. 

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