Labour and the Retail Sector
Labour's focus on the retail sector for jobs is worrying me. Jobs in the retail sector have a wide level of access - many people are capable of doing these jobs (as compared to say programming, or science or nursing) and they are definitely a boon for lower skilled workers. My concern is the reason why stores hire staff. The common view seems to be that business rates and rents are too high and that's probably true, but how much is that reducing the numbers employed? Back in the boom the same rents and rates were in place, but we had higher employment in the retail trade - why?
We are now at the employment level of 2005-2006 for retail according to CSO statistics
Demand, confidence and credit in the economy are the answers:
- More people working right across the economy in every sector
- More disposable income per person
- Easier access to credit via cards, loans, low(er) interest rates.
- Greater confidence around getting and retaining jobs, wage growth, debt repayment
I worked in Brown Thomas for a year and a half in their TV and HiFi department back in 2000. It was a great time because there was so much money in the economy, combined with shiny new technologies like, flat screens, wide screens, LCD's MP3 players and play station 2. During the week there were about 4 people on the floor plus a manager, but at the weekend that would go up to about 8 people. Often times the full time people would work a Saturday to make up for the slim pickings during the week. And this staffing experience is common to many retail operations - If there isn't demand you don't need people on the floor.
Right now there is over 200% more people unemployed in the economy (13.5% vs 4.5% for the same period in 2005). That's a lot less disposable income, fewer people willing to spend on their credit cards and most importantly, a tremendous lack of confidence in the short to medium term income prospects. If retailers don't see changes in peoples short term confidence then why would they hire in the first place? If I dont think my wages are going to rise in the near term (or worse still that I may lose my job) then I am not willing to make unnecessary large purchases taht require credit in case I can't pay them off. I understand Labours reason for targeting jobs in the retail sector, its an area where low skilled workers could re-enter the workforce quickly but creating the reason for retailers to hire in the first place is much more important.
Just as an addendum:
The current employment laws around working while on the social welfare would be a far better place to start.
People on social welfare can work up to 20 hours per week without endangering their entitlements, however it must be the same 20 hours every week. Most people who work in stores (or in other places like cinema's leisure centres, call centres etc) will tell you that most of the time their hours vary to match busy times, employee holidays and specific initiatives. There are very few of these jobs that can support this type of inflexibility in their employees. If you took away this outdated condition then you could get people back into part time work and reduce the burden on the state. In addition you would make them feel like they are contributing and ensure that their skills are not eroded over time.
