Living wage: The salvation of the retail economy

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While the forthcoming increase in the minimum wage has workers rejoicing and retailers grimacing, the living wage debate continues to fester. Widely demonized as a euphemism for Socialism, the idea of offering entry-level employees salaries that encourage long-term job loyalty may well provide the solution for many of the problems currently plaguing the retail world.

The current epicenter of the living-wage debate is the Kingsbridge Armory, a former military installation located in the Bronx section of New York City. Largely empty since 1994, the building's owner -- the city of New York -- is in the process of negotiating its transformation into a major shopping center. As Reliant, the proposed developer, works out the details with city government officials, local activists are pushing for a living wage requirement for retailers hoping to use the facility.

The activists see living wage as a way to maintain a healthy, gainfully-employed lower middle class neighborhood against the fragmenting force of gentrification. The developer sees it as a potential deal-killer for businesses looking to move into the refurbished building. Both sides, however, are missing the true beneficiaries of the higher pay scale: retailers and customers.

In the current environment, entry-level employees, presented with minimum-wage jobs, have little or no reason to dedicate themselves to their work. Just as they are easily replaceable cogs in the retail infrastructure, the jobs themselves are easily replaceable: When store employees are fired because of shoddy work, poor customer service, or layoffs, they can take their minimal housekeeping and register-jockeying skills to the next, equally generic job. The things that drive sales and inspire customer loyalty -- like knowledge of product lines, employee eagerness, and pride in work -- become old-fashioned luxuries that companies feel they cannot afford.

Of course, even the lowest level job requires some minimal amount of training. When poor wages encourage high employee turnover, many companies try to make up the difference by streamlining the job-education process. By massively simplifying the work that they ask their employees to do, the retailers ensure that training becomes the simplest link in the chain.

The standard line about such jobs is that "a monkey could do it." However, as any zoo visitor could attest, monkeys aren't noted for their attention to detail, customer service skills, or tendency toward job retention. By designing work for the lowest-common denominator, retailers encourage their employees to live down to expectation.

American culture is liberally littered with depictions of intelligent, engaged salespeople. From Mr. Whipple, who asked customers to avoid assaulting the Charmin, to Sam the Butcher, who offered the Brady family the best in meat products, the involved, informed store employee is an ideal that underlies the central concept of American commerce.

In this context, the ultimate victims of the replaceable employee system are the customers who must endure its ravages. Whether the end-product is electronics salesmen who don't know about the TVs that they are pushing, clothing store employees who ignore customers, or fast food workers who don't think twice about skipping work, the final result is in-store interactions that are confrontational, time-consuming, and unsatisfying. Customers, in turn, shift their purchases to the Internet, grumble about the good old days, and search hopelessly for the holy grail: stores with employees that are helpful, knowledgeable, and friendly.

Part of the key problem is that many retailers -- and legislators, for that matter -- regard minimum-wage jobs as short-term stints that most workers rely on in the interim between better-paying careers. For much of the population, however, these jobs are, effectively, careers. Faced with the option of long-term gainful employment at decent wages, many workers would be inspired to stay at their jobs, gaining experience and knowledge, and becoming a greater asset to their company. In the current context, however, this sort of devotion is justifiably perceived as a waste of time.

In the Kingsbridge Armory situation, the activists have designated a living wage as $10 per hour with benefits, or $11.50 per hour without. This wage, approximately $2.75 per hour above the new minimum wage, would effectively transforms the Armory jobs from easily-replaceable wage-slave positions to prized careers. For customers, it could turn the Armory into a place with a reputation for superior service, a true shopping destination.

That, of course, would be good business for everyone.


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