Watch CBS News

In retail, a race problem hidden in plain sight

When it comes to equal pay and promotion opportunities, it appears blacks and Latinos are losing out in the retail industry.

Minorities tend to hold fewer managerial roles and suffer from a significant pay gap when compared with white workers, according to a new paper from Demos, a left-leaning think tank, and the NAACP. Some policies retailers use, such as relying on "just in time" scheduling and part-time workers, also tend to hurt racial minorities, given that black workers often want to work more hours than they're given, the report noted.

The findings come amid a push for higher wages in low-wage industries such as retailing and the fast-food segment, with the Fight for $15 labor movement striving to address both economic and racial equity. That push is having some success as municipalities and states across the country boost their minimum hourly rates.

Workers protest for $15 minimum wage 01:21

But racial disparities appear to remain deeply embedded in the retail industry. Full-time black and Hispanic salespeople, for instance, earn just 75 cents for every $1 earned by their white peers, Demos said.

"It's telling that we have so many kinds of workforce statistics that have made no gains since the civil rights era, like the relationship of the black and white unemployment rate," Catherine Ruetschlin, senior policy analyst at Demos, told CBS MoneyWatch.

The black unemployment rate stood at 9.6 percent in April, or almost twice the 4.7 percent rate for white workers. That two-to-one ratio hasn't budged for about 40 years. Ruetschlin added: "Black family income is lower in relation to white family incomes since the civil rights era. We've actually backtracked."

The National Retail Federation took issue with the report, saying that the retail industry is "color blind."

"Retailers work every single day to ensure that their workforce can achieve personal and professional gain to the benefit of the employee, their families and the communities where they live and work," said NRF senior vice president Bill Thorne in a statement emailed to CBS MoneyWatch. The industry provides "jobs and opportunity for millions of Americans regardless of race, age, background or experience."

For black families, the retail industry is the No. 2 employer after education and health services. Still, the share of black workers in retail is similar to that of the workforce overall, yet black retail workers are more likely to be part of the "working poor" than white families.

That's due to a number of factors, such as lower wages compared with white workers and the fact that black workers are more likely to be the sole earner in the household, Demos noted. While 9 percent of all retail workers (regardless of race) live below the official poverty rate, that jumps to 17 percent for black retail workers and 13 percent for Hispanics working in retail, according to the report.

Black workers "aren't getting the same opportunities as white workers," Ruetschlin said.

Even though black workers make up 11 percent of the retail workforce, they represent only 6 percent of retail managers. One in five black retail workers is employed involuntarily with part-time hours, compared with fewer than one in seven white workers, the study said.

The inability to find full-time work has become a problem for many American households, regardless of race, thanks partly to the rise in sophisticated scheduling software that allows many low-wage employers to change work schedules at the last minute. About 17 percent of the U.S. workforce is coping with an unstable schedule, the Economic Policy Institute said in an April report.

But that might affect black and Hispanic workers to a greater extent than white workers when looked at in the broader context of unequal incomes, Ruetschlin said.

"Black workers tend to have longer commute times than white workers," she said. "If you pay your bus fare, find a baby sitter, and show up to be told you don't need to be there, you have paid all of the costs and have not been paid anything for your troubles."

Because black retail workers are also more likely to be the sole earners in their homes, that instability adds to their financial problems.

The problems aren't necessarily due to overt discrimination but to a complex set of issues that, if left unexamined, may only perpetuate the racial divide in retail, she added. For instance, some employers rely on credit scores to determine if a job candidate will be a good fit, but that tends to stigmatize black applicants, since black households with credit card debt are less likely than similar white households to report good or excellent credit.

New York City recently banned most employers from checking a candidate's credit record on the reasoning that it unfairly locks many applicants out of jobs.

So, what are the remedies? Demos recommends a higher minimum wage, an end to employment credit checks and protecting part-time workers from issues such as unfair scheduling systems.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.