Stores Seek More Help for the Holidays

As Christmas season approaches, labor shortage could mean long lines, less service.

At one end of the Fashion Square Mall here, part-time employee Mark Blakeslee dashes between Crock-Pots and stainless steel skillets in the housewares section of Macy's. The service representative from the nearby UCLA Medical Center wanted a second job for the holidays and was hired the same day he applied.

At the far end of the same mall, Bloomingdale's manager Dave Wong scrambles alone to hang women's fashion apparel.

"Finding help for the holidays has been a real challenge," he says. "We are having to pursue workers more than we ever have."

From Macy's to Bloomingdale's, Savannah, Ga., to San Jose, Calif., the rush is on to find seasonal workers amid the lowest US unemployment rate in nearly a quarter century. For employers, that has meant more "Help Wanted" signs than help available, and higher wages - $7 to $10 per hour - for those employees who can be found.

For shoppers, it also means the prospect of longer lines, less service, and costlier goods as retailers try to entice and hold part-timers with higher pay, and perks from better hours to longer breaks and store discounts.

"Most potential employees are happy where they are and don't need a second income," says Mr. Wong, "If we're going to get them and keep them we've got to make really attractive deals."

The phenomenon is a direct result, say economists, of steadily dropping US unemployment figures, which have hit 4.7 percent, the lowest rate since 1973. With 13.5 million jobs added to the economy since 1993, more Americans are working with hourly earnings that continue to rise. Even in California, where recession hit harder and later than in the US as a whole, the unemployment drop has been steady - from 9.7 percent statewide in 1992 and 1993 to 7.1 a year ago to 6.3 percent in September.

Low-end wages up

Here and across the country, wages for those at the low end of the wage scale - the bottom 20 percent of wage earners - have begun to inch up for the first time in 15 years. According to Jared Bernstein, research economist at the Economic Policy Institute, the 2.5 percent rise in real wages (from $6.52 on average to $6.68) for these workers is a much larger increase than anytime since 1982. "This means a much needed relief for workers at the bottom of American society," says Mr. Bernstein.

For the holidays, that relief is large in many areas of the country, even though it is primarily limited to part-time work.

"Employees are getting the $7, $8, and $9 an hour for the jobs they used to get $4, $5, and $6," says Patrick Ryan, president of Tri-state Professionals, a temporary-employee job-search firm in Keene, N.H. "It's definitely an employee's market with businesses having to up the ante."

If the new situation is exasperating for employers, it has peeved many shoppers as well. Besides creating pressure for retailers to raise prices to recover increased labor costs, the employee demand is bringing new people into the job market, many of whom have no experience and few skills. "I'm running into sales people who can't run a cash register or make change," says shopper Jeff Daniels, a computer technician in Phoenix. "Meanwhile, I wait in line longer and pay more." Such frustrations will increase during the holiday rush, economists say.

"Stores are going to be stretched very thin and the help they have will be less experienced," says Mark Zandy, an analyst at Regional Planning Associates in Westchester, Pa. "Laborers are getting more emboldened in doing less and asking for more and getting it."

Record purchases?

Inept or inadequate help may not hurt overall holiday spending however, say economists. Because so many people are already working and wages are up, the stage is set for record purchases in gifts from software to socks.

"All the signs are there," says Ira Silver, chief economist for J.C. Penney in Dallas, Texas. "Low unemployment, new job creation and income growth, low inflation and interest rates ... that's about as positive a formula as you can get for the Christmas business."

For the American public as a whole, warn some economists, a downside to the current tight labor market is that wage increases could eventually create the shopper demand that will revive inflation and push the Federal Reserve to increase interest rates. The inflation rate has been low for the past seven years.

There are also concerns that statistics of low unemployment coupled with the high availability of seasonal employment present a too-rosy picture that belies the plight of inner-city and minority workers. Joblessness among blacks is 33 percent and is at 23 percent for Hispanics, according to Robert Ginsburg, research director at the Midwest Center for Labor Research..

Nor do seasonal jobs solve employment concerns for employees laid off in recent downsizings of large American corporations.

"The jobs are there but they are essentially low wage, temporary jobs with no benefits, not the kind of employment that people can make a living off of," says Kate Bronfenbrenner, an economist at the Cornell University School of Labor Relations. "I am concerned that this point is continually lost in the current discourse over tight job markets."

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