A Basic Sector of the Economy Is Shedding Jobs at an Alarming Pace
Business + Economy

A Basic Sector of the Economy Is Shedding Jobs at an Alarming Pace

© Shannon Stapleton / Reuters

President Donald Trump championed himself as a savior of the American worker during his campaign.

But he largely has been silent on the biggest crisis facing these workers: the collapse of the retail industry.

Related: The Retail Business Is About to Hit Another Painful Bump

According to government data, general-merchandise stores like Macy's and Sears have bled about 89,000 jobs since October — more than the total number of people employed by the US coal industry, which Trump repeatedly pledged to revive both on the campaign trail and in office.

Since 2001, department stores alone have lost half a million jobs. The coal industry, by comparison, has lost about 22,000 jobs in the same period.

The job exodus in the retail industry, which employs about one out of every 10 American workers, is only expected to continue.

Retailers have announced more than 3,200 store closures so far this year, and Credit Suisse analysts expect that number to grow to more than 8,600 before the end of the year. For comparison, 6,163 stores shut down in 2008 — the worst year for closures on record.

The retail industry typically pays low wages but employs people in every age bracket, as well as those who are low-skilled and need flexible scheduling options.

When these workers lose their jobs, they can have a hard time finding other employment.

Related: Retailers in Trouble: Bankruptcies on Fastest Pace Since the Recession

Meanwhile, retail workers still employed are seeing their hours cut — so their paychecks are getting smaller — and some say they're now doing twice the work, as companies look for ways to shrink labor costs.

Trump has not made any public statements about the decline of the retail industry. He met with eight retail CEOs in February, but it was reportedly more focused on tax reform than jobs. At the time, the retail industry was lobbying heavily against a border adjustment tax on imports that the White House was considering.

The Trump administration has since tabled that proposal, according to The New York Times.

On the federal minimum wage — an issue that has an enormous effect on the low-paying retail industry — Trump has made few and somewhat conflicting statements. He has said the federal minimum wage, which is $7.25, should be raised to $10, but he has also said that states, not the federal government, should set their minimum wages.

'I have to do the work of my entire team'

At companies like Sears, which owns both Sears and Kmart stores, store closures and shrinking paychecks are having a devastating effect on workers.

Sears has closed more than 150 stores this year, and it has been laying off workers and cutting labor hours at open ones.

Several Sears workers spoke to Business Insider on condition of anonymity about how this is affecting them.

A worker at a Sears store in La Jolla, California, said part-time employees at his store have had their hours cut by 70%. Employees who worked 20 hours a week are working about three hours a week now or not being scheduled at all, he said.

Related: Robot Workers Are Moving Onto the Retail Floor

Sears disputed that workers' hours had been cut by 70% but said that full-time workers "represent an increasing percentage of available weekly team hours."

"Sears has adjusted our store staffing plans to meet our evolving store traffic needs," Howard Riefs, a spokesman for Sears, said in an email.

"The hours have been cut tremendously. At times, there is only one cashier and one associate helping out the whole day," the employee in La Jolla told Business Insider. "It's overwhelming. We try to do our best with no help from management, but it's getting to be too much. Part-time associates are not getting hours at all because full-time comes first. Many are applying at other non-Sears stores."

A former employee at a Sears store in New York said hours were cut at her store after Christmas. She said she worked at least 30 hours a week until late December, when she was dropped to 13.5 hours and, later, seven. She said she was forced to leave her job as a result.

A salaried manager at another Sears store said all her hourly department heads were eliminated and that she was swamped with work.

"I have to do the work of my entire team with threats of having to work six days if it's not done," she told Business Insider. "I used to have two associates with me. I am now working alone with one associate [who works] maybe four hours a day. Same tasks, one person to complete now."

Sears employees have also been stripped of their employee discount, which gave them 10% to 20% off products at Sears and Kmart. The company replaced the discount program this year with a system that awards 20% back in "points" that can be applied to future purchases. The points expire after 60 days.

Sears says the new system provides more value to employees. But many employees are furious about the change, saying they saved much more through the old system.

One former senior executive at Sears called it "absolutely demoralizing" in an interview with Business Insider.

Related: A Bad Sign for Retailers? Warren Buffett Just Dumped His Walmart Shares

"The team has been beaten down," said the executive, who asked to remain anonymous for fear of legal retribution. "I don't quite understand why people are still there."

A new class of unemployed workers

As more and more retail workers lose their jobs, a new class of unemployed and underemployed workers is emerging in America that's larger and more geographically far-reaching than the coal industry Trump has vowed to revive.

What does this class look like? Nearly half are women, about 17% are Hispanic or Latino, 12% are African-American, and 6% are Asian, according to Bureau of Labor Statistics data. Most are between 25 and 54, with a median age of 38. On average, retail employees are paid about $10.87 an hour, or $22,600 annually, and cashiers are paid about $9.69 an hour, the data shows.

The mining industry, by comparison, is about 80% male and 77% white, with a median age of 42.5 and a median hourly wage of $26.88.

But coal miners and retail workers have something in common: Most don't have a set of skills that's easily transferable to another industry, which makes career transitions very challenging, according to Mark Cohen, the director of retail studies at Columbia Business School.

"The coal miners are out of luck," Cohen recently told Business Insider. "Retail workers are in the same boat."

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