Retail: The quiet crisis

The industry shed more than a half-million jobs in 2008. But that doesn't get a lot of attention in Washington

 

There's a major American industry that lost 522,000 jobs last year and is on one of the longest sales losing streaks in its history.   But the retail industry's crisis isn't getting the kind of government attention being showered on the nation's automakers.

Monthly store sales have declined for six straight months. In the midst of the longest recession in decades, the industry has lost more than three times the 163,000 manufacturing jobs shed by the auto industry last year.

Marshal Cohen, chief retail analyst with NPD Group, said he's especially concerned about this significant erosion of retailing jobs.  Unlike with the auto industry, Cohen fears the issue of retail job losses either isn't getting its fair share of attention from Washington or keeps "getting swept under the rug."

"When the industry is losing 34,000 jobs every couple of weeks, you better pay attention," Cohen said. He was referring to Circuit City's announcement last month that the electronics retailer, which employs 34,000 people in the United States, was going out of business.

"Retailers are the largest group of private employers in the country," Ullman said during a panel discussion last week at the National Retail Federation's (NRF) annual convention in New York.

"We lost twice the number of workers last year than automakers and we hired 45% fewer holiday workers last year," he said. "If that doesn't (press) the point, I don't know what would."

Said Cohen, "Consumer spending at retailers fuels 75% of the economy. So you have to make sure these people have jobs.  "If not, the ramifications are so overarching that it's enough to put the economy in a tailspin," he said. "These people losing jobs are full-time workers, part-time workers, college kids, senior citizens. They aren't only employees. They are consumers and taxpayers too."

Scott Hoyt, senior director of consumer economics for Moody's Economy.com, said he doesn't have a "good answer" as to why the the retailing industry hasn't been as effective as other industries in highlighting the issue of escalating jobs losses.

"If we put it in perspective, although the number of actual jobs lost in retailing is much bigger, the percentage of the total is not as high as for the auto industry," Hoyt said.

The retailing sector employed 15 million Americans in 2008 versus 800,000 jobs in the U.S. auto manufacturing industry, according to the Labor Department.

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