Retail employment sinking

Retail now has the highest share of redundancies and unemployed workers are finding it harder than others to find new jobs, according to a new report.

The Resolution Foundation report – Sorry, we’re closed – argues that falling employment in retail – equivalent to 320,000 missing jobs since 2003 – is part of a long-term trend that pre-dates the recent impact of online shopping.

The report says the steady employment share decline – down 12% since 2003 – has been absorbed by a buoyant labour market up until recently, but that it has taken “a more worrying turn” recently. The Foundation’s analysis shows that retail workers now have a higher rate of redundancies than any other sector. Those leaving retail are now also more likely to become unemployed than leavers from any other sector (31 per cent, compared to an average across all sectors of 26 per cent).

Longer term unemployment

The report also finds that ex-retail workers are also staying unemployed for longer than ex-workers from other sectors. Two in five (41 per cent) ex-retail workers have been unemployed for six months or more, the second-highest of all sectors. This is a stark turnaround from before the crisis, when ex-retail workers had among the lowest unemployment durations, says the report.

The Foundation notes that this increased unemployment risk has been most significant for younger workers, with three in five unemployed ex-retail workers aged under 30, despite barely a third of retail’s workforce being in this age bracket.

These growing unemployment risks are all the more challenging for household finances due to the growth of ‘breadwinner shop workers’, says the Foundation. The report finds that 34 per cent of retail workers report working the same or more hours than their partner, up from 30 per cent in 2002.

The report highlights how retail’s shrinking role as an employer has coincided with a boost in productivity and pay for those working in the sector. Productivity has increased by 40 per cent in retail since 2000, and typical real hourly pay in the sector has increased by over 5 per cent in real terms since 2009 – compared to an average fall of 4 per cent.

However, retail continues to be a large low-paying sector, the typical hourly wage in retail is almost a third lower than typical wages across the workforce as a whole (£8.80 compared to £12.73).

Job creation in other sectors

Daniel Tomlinson, Research and Policy Analyst at the Resolution Foundation, said: “Retailers’ woes have hit the headlines in recent years, but this is an economic and cultural change 15 years in the making. And while big name brands will inevitably grab the spotlight, we need to focus far more on the people and places most affected by the changing face of retail.

“The good news is that job creation in other sectors – from social care to hospitality – is generating new opportunities. We are unlikely to see the large unemployment hotspots that were left behind by previous rounds of economic change.

“However, in recent years life has become tougher for those leaving retail, who are more likely to find themselves unemployed – and for longer too.

“So while policy makers can’t reverse major and long-lasting changes in how we shop, they can and should focus on the people and places most affected. Rather than trying to rescue the 20th century model of shop-dominated high streets, town centres have an opportunity to diversify and become 21st century destinations for leisure, as well as retail.”

Skills shortages

Meanwhile, a new study from the Recruitment and Employment Confederation (REC) finds that an increasing number of UK employers are worried about a shortage of skilled workers amid falling confidence in the economy. The poll of about 600 recruiters reveals growing concerns over the availability of skilled staff, especially in engineering, technical, social care and hospitality. REC chief executive Neil Carberry said the survey showed beyond any doubt that political uncertainty was “damaging for job creation”. He added: “With only a month before Britain is due to leave the EU, businesses across the country are clear that they need clarity about the plan for after the end of March.”

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