As Retail Adapts During the Pandemic, Cities Ponder Their Role

June 24, 2021

During the first year of the ongoing COVID-19 pandemic, some 305,000 apparel retail workers lost jobs, while cashiers and many other retail store workers contended with wages below $15 an hour, and the federal minimum wage stayed stagnant for its 11th straight year.

As the retail industry adapts to surging pandemic demands for online ordering capabilities, home deliveries and curbside pick-up services, cities can set agendas to counter trends harming low-wage retail workers and local communities, argues a new report by the National League of Cities, an organization of local government officials.

Some 64 percent of retail workers don’t earn a living wage to support a family of four, and the median wage for cashiers last year was $12.04 an hour, according to the NLC report. While the federal minimum wage has stayed stagnant at $7.25 an hour since 2009, despite a worker-led push over the past decade to raise those wages to at least $15 an hour, many cities and states have also failed to effect change. In fact, some 25 states have blocked cities and other local jurisdictions from raising wages over the state or federal minimum, according to the report.

“Raising the minimum wage is the first step in narrowing the pretty large gap between the value that retail workers provide to society, and unfortunately, the low wages they receive in return,” said Tina Lee, senior research specialist at the NLC’s Center for City Solutions, at a press conference Thursday on the report.

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While big-box and major retailers reported record profits during the pandemic, they’ve also faced more public scrutiny over labor practices that workers and advocates claim have subjected workers to unsafe working conditions without additional pay to compensate them for the risks.

Seeking to shift that narrative, retailers including Amazon, Target and Walmart have instituted raises or otherwise signaled their embrace of a $15-an-hour minimum wage or perks like signing and other bonuses. Amazon’s starting minimum wage was set at $15 an hour two years before the pandemic, while Target instituted a $15 minimum wage last year. Walmart, though it has implemented raises for some groups of workers over the past year, still pays as low as $11 an hour to workers in a number of roles in parts of the country.

“I expect to see convergence — we’ve already seen more retailers adopting a long-term plan [for] $15-an-hour minimums,” said Michael Mandel, chief economic strategist at the Progressive Policy Institute, at Thursday’s press conference. “I think we’re going through a period where workers are going to be less willing to accept such low wages.”

Mandel alluded to a recent Washington Post report highlighting the departures of retail workers — roughly 649,000 workers quit in April — and argued that the shift bodes well for the labor market.

“I think that’s good news — people have decided that they don’t want to work low wage jobs … and they think the job prospects are good enough to move,” he said.

“And in the economics space, you look at quit rates as a positive — ‘quit’ means people are optimistic and think they can do better.”

As the retail industry renegotiates its relationship to workers and customers, cities and local officials should shepherd that reinvention by addressing wages and the use of public spaces in ways that prioritize the needs of local communities, NCL leaders added.

“Just as the retail industry faced disruption following the Great Recession, COVID-19 has been another major disruptor, accelerating the adoption of curbside pickup, underscoring the necessity of essential workers, and solidifying demand for experience-based retail and discount stores,” said Brooks Rainwater, director of the National League of Cities’ Center for City Solutions.