The Employment in Retail Trade, 1973-1985

By Haugen, Steven E. | Monthly Labor Review, August 1986 | Go to article overview
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The Employment in Retail Trade, 1973-1985


Haugen, Steven E., Monthly Labor Review


The employment expansion in retail trade, 1973-85 One of the largest and fastest growing industries in the United States, in terms of employment, is retail trade. Nearly 17.4 million persons were employed in this field in 1985, or more than 1 of every 6 nonagricultural wage and salary workers. From 1973 to 1985, retail trade employment expanded by 5 million, accounting for a fourth of the total nonagricultural employment increase over the period. Only services and manufacturing employed a larger number of workers, and only services; finance, insurance, and real estate; and mining exhibited a higher rate of employment growth over the 12-year period. Although growth in retail trade employment was pervasive, a closer inspection reveals that most of the increase can be attributed to very sharp expansion in two key industries within the retail trade division--eating and drinking places, and food stores.

This article discusses employment trends in retail trade as well as in key industry groups since 1973. In addition, it explores the changing demographic, occupational, and earnigs characteristics of retail trade workers, as well as the incidence of self-employment in the industry. Data for the years 1973 and 1985 were chosen for comparison, because they are indicative of periods characterized by relatively robust economic activity and, more importantly, because they each represent the third year of recovery following a recession.

Data for this study were derived from both the Current Employment Statistics survey and the Current Population Survey. The Current Employment Statistics survey is a monthly sample of the payroll records from 250,000 business establishments nationwide and is widely regarded as the most detailed and statistically reliable source of information on industry employment, hours, and earnings. Data from this survey are used in the analysis of employment and earnings trends among wage and salary workers in retail trade industries over time. However, because the payroll survey does not provide information on teh demographic or occupational characteristics of workers, or on self-employed and unpaid family workers in the industry, data on these subjects were derived from the Current Population Survey, a monthly sample survey of 59,500 households nationwide.

What is retail trade?

The role of retail trade industries in a market-based economy is obvious: to serve as "middlemen" between those who supply goods and those who purchase the goods for final consumption. More formally, the retail trade division, as defined in the 1972 Standard Industrial Classification Manual, includes ". . . establishments engaged in selling merchandise for personal or household consumption, and rendering services incidental to the sale of the goods." These firms are classified into eight major component industries, including general merchandise stores, food stores, automotive dealers and gasoline service stations, apparel and accessory stores, and eating and drinking places. Altogether, there were about 2 million retail establishments in 1982. Clearly, retail industries are the major conduits for the distribution of goods from producer to consumer. As such, they should be distinguished from their wholesale trade counterparts, which employe roughly one-third as many workers basically in the sale of goods to retailers or to industrial or commercial users.

Retail trade, by nature, is highly labor intensive, and by and large it is the retail worker who usually plays the preeminent role in the transaction between buyer and seller. Although there have been recent developments in the way retailers conduct business that are lessening the dependence upon workers for certain tasks, such as the extensive use of computerized gasoline pumps to serve customers, there are many services provided by the industry for which it has been exceedingly difficult to substitute capital for labor. Whether through providing information and assistance to the customer in the selection of the product, ringing up the sale, or in delivering the product, the retail worker is an intrinsic and seemingly irreplaceable "factor of production" in the industry.

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