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Barbara Farfan

Best Retail Jobs and Employers Aren't Good Enough for College Grads Says Underemployment Report - U.S. Retail Industry Employees Undervalued, Underpaid, But Not Overqualified (COST)

By January 29, 2013

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Two different reports identifying and ranking the best U.S. retail industry employers were released in January 2013 by two different organizations. But no matter how good U.S. retail employers and jobs may be, they're not good enough for today's college graduates, according to a different report on unemployment released last week by The Center for College Affordability and Productivity (CCAP).

> 2013 "Best Retail Companies to Work For" >
> "Employees Choice Best Retail Employers" 2013 >

Using qualification conclusions drawn by the Bureau of Labor Statistics, (BLS), the CCAP concludes that since a majority of retail jobs should only be filled by people who have no more than a high school diploma, then 25% of current retail industry employees with college degrees who are working in "unskilled" retail jobs are underemployed and stuck in retail underemployment because of their higher education credentials.

Listed among the jobs that should require less than a high school diploma are retail sales persons, cashiers, waiters and waitresses, bartenders, counter and retail clerks. Listed among the jobs that require a high school diploma but nothing more are sales reps, business operations specialists, customer service representatives, managers, restaurant front line supervisors, and front line retail supervisors.

Listed among the people who have obviously not recently worked in or managed a retail store, restaurant, or customer service operation are the pencil pushers at the BLS and CCAP.

Repeatedly the report points to the number of college graduates that are working in retail jobs which, according to the Bureau of Labor Statistics, "require no postsecondary training." This educational conclusion is just accepted as fact by the BLS, the CCAP, and just about anybody you talk to.

And based on that premise, the CCAP then presents a chart which compares the 5% of retail employees with college degrees in 1970 and the 25% of retail sales clerks with college degrees in 2012 as evidence that there is an oversupply of college graduates in America and an undersupply of "real" jobs that are worthy of their educational superiority.

News flash. The retail industry has changed a little bit in 42 years. The bureaucrats at the BLS and the report writers at the CCAP are living in a bad 70's TV sitcom rather than a 21st century retailing reality if they think the labor requirements between the two time periods are remotely comparable.

Retailing is a real profession that requires real knowledge, skills, training and education. It's more globally competitive than ever before. And, by the way, it accounts for 70% of the GDP of the U.S. economy. Is it really wise to entrust two-thirds of the U.S. economy to a completely uneducated labor force?

Whatever happened to the notion of working your way up the corporate ladder? When did it become a foregone conclusion that a college degree gives you a free pass into middle management or a six-figure income without paying any professional dues? When did college students get too good for practical wok experience?

Who says that there's no value in working a retail job, even if its not your chosen field? People who have never worked one and people who go into it with the attitude that working retail is tantamount to career slumming.

When the U.S. economy was booming, college graduates were living in a fairy tale job market where they could step directly from their college dorm into a fully furnished apartment with a six-figure job without even having so much as a part-time summer job on their resume.

Well, some of those college graduates with no "menial" job experience have worked for me and have worked with me. So far I have never known a college graduate without at least one front-line job on their resume that wasn't a detriment to their employer and co-workers in a number of ways.

Among other things, they don't know how to work or play well with others and they don't understand how to function effectively in an organization. They generally aren't teachable and they often act like the world owes them something because they have a piece of paper that cost them four years and $100,000.

What is the essential difference between the job description of a bank teller and retail store cashier? Very little. And yet it seems that the people who handle money behind a teller window need more education than the people who handle the money for the industry that produces 70% of the U.S. GDP.

I doubt if most bank tellers use 2% of the information that they learned in college. But the reason that at least 50% of the bank teller job openings currently listed on the CareerBuilders.com require a college degree is because a bank wants the professionalism, maturity, and the ability to complete tasks and achieve goals that the typical college graduate possesses.

Banks want good communication skills, critical thinking, responsibility, and a professional image that matches their brand in their money counters. They look to college graduates to bring these qualities with them. Why shouldn't a retail organization want the same in their cash handlers too? And therefore, why wouldn't a retail organization also need and want college graduates that bring those qualities with them?

What's the essential difference between a restaurant server and a flight attendant? The airlines would tell you that flight attendants are highly trained aeronautic safety experts and a college degree is appropriate for those responsibilities. And yet in my lifetime I've seen more customers carted out of restaurants by EMTs (including one who had a heart attack before I could serve him his sandwich) than I've seen flight attendants saving passengers with inflatable life vests.

The notion that bank tellers and flight attendants should require a college degree but retail and restaurant customer service employees, front line supervisors and managers should not is just fabricated professional discrimination.

I had a college degree long before I took what would be considered by the BLS and the CCAP as a downward step on the employment ladder to work an hourly position at the Walt Disney World Resort. I'm not saying I didn't have those for-this-I-went-to-college moments, but I realized pretty quickly that working for a superior employer like Disney could teach me more about the realities of successful business and management than any college curriculum.

To say that you are overqualified when working in any position in a superior retail organization is to be educationally arrogant and professionally inexperienced and immature. Which is all the more reason why you need to spend some time in the real working world before you will be of great value to any company in a higher level position.

Some Container Store sales associates were paid more than $44,000 in 2012, which is more than the average teller is paid. Despite what level of education they do or don't bring with them to their first day at work, the Container Store intends to give all their new employees 263 hours of training in the first year. Obviously the Container Store doesn't view their primary point of customer contact as unskilled laborers.

Most college graduates would consider a job at a gas station as the ultimate bottom of the barrel underemployment situation. And yet a QuikTrip Relief Assistant is paid $32,000 - $44,000, per year, which is also more than the average teller job, and a respectable college graduate salary.

Nugget Market pays some of its cashiers about $40,000 per year, which is a wage that can also be earned by a Nordstrom salesperson, or a Costco cashier. Some Trader Joe's Mates (front line supervisors) can make more than $60,000 per year.

This is definitely above average pay for retail employers. And it's no surprise because Container Store, QuikTrip, Nugget Market, Nordstrom, Costco (COST), and Trader Joe's are consistently on the Best Retail Employers list and generally above-average retail chains in many ways. While none of the currently open entry level job positions advertised by these high-paying retailers indicate that a college degree is required to be seriously considered, why wouldn't these leading edge retailers want that? And why wouldn't they deserve that in the first-rate retail operations that they are running?

These shots aren't just being fired in the direction of the CCAP and the BLS, they're also aimed at the U.S. retail industry which currently undervalues its own labor force. The real reason why most college grads think retail jobs are beneath them is because the pay is crappy. And the reason why many of the largest U.S. retail chains attract and even actively seeks employees without college degrees is because they want to pay them crappy wages.

The bottom line conclusion of the CCAP report is that there is a supply and demand problem - too many college graduates and too few jobs that require a college degree. But I think that is not even close to the bottom of the college grad employment line.

College grads are not so much underemployed, as they are unrealistic in their expectations, and underpaid for their contributions to America's most important industry. Today's college grads will continue to be appropriately employed but inappropriately paid as long as Americans consume more than they create or contribute, and as long as American consumers are only willing to pay a price high enough to support the lifestyle of workers in other countries, but not their own.

I think the obvious question is ridiculously unaddressed in the CCAP report. Why aren't American universities able to deliver a decent college-level education for an affordable fee? That study would be titled "Why Are American Universities So Overpriced and Undereffective?" And that would be a report that might have some real answers.

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January 29, 2013 at 6:00 pm
(1) Zlatko Milanovic says:

You’re sort of missing the point. There is value in work experience and working your way up the ladder, but it’s a ladder to no where. There’s no good salary, no benefits, no health insurance, no retirement, etc. If the ladder lead to those good things, people would climb it willingly. Instead, only a very small group at the top run off with all the money that your hard work and talent created. Understand?

November 16, 2013 at 2:32 am
(2) Be Realistic says:

Your missing the point. Retail jobs, even simple ones at the cashier level are under-trained, and underpaid. You’re only going to make that $44,000 dollars annually if you’re working full-time too. You only get employment benefits like annual leave and so on if you’re working full-time, or permanently part-time.

If you’re only Casual which alot of retail jobs are, especially, at the cashier level, your employment situation is incredibly insecure. You don’t qualify for full-time employment benefits, so annual leave and such guaranteed to full-time workers are out. You have no guarantee over getting enough rostered hours to cover general living expenses either, especially on the minimum wage.

April 18, 2014 at 12:54 am
(3) Cloudyyo says:

“You’re missing the point” ;)

As a college graduate that works full time with some benefits for $9 an hour, for one even a living $35000 a year is beyond me and my coworkers’ means. Retail in America is a routy, disorganized, inhumane system that needs major overhauling. Managers mis communicate procedures, yet workers get the blame for the confusion. Having done multiple retail jobs, I’ve learned only one maxim: retail is a no win situation. You don’t work hard, you certainly get punished. You work hard and take one for the team, you still get reprimanded. To add to it, I observe silly procedures or “operational idiosyncrasies” less educated retail workers do and try to “educate me” on that are just, for a lack of a better word, ridiculous.

Overall, retail in America is a messy business occupied by mostly unprofessional people. Many of my coworkers don’t think, innovate, nor take one for the team. You can blame it on poor pay and morale, or laziness(pick one or both). Poor pay and poor impressionable management makes it seem like a ruffian house most highly educated aspiring professionals would prefer to avoid.

If you put kids like me who have been on the ground and experienced this mess in positions of change and influence in the industry, I bet we can turn it over on its head and fix it.

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