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Behind The Store Front Prepared for the Retail Council of Canada in partnership with Industry Canada By Jacobson Consulting Inc. Work Force Retail Compensation

This section discusses variations in worker incomes across the various retail sectors. Generally, average worker incomes will be dependent on the extent of full-time employment and on the retail format. For retail, incomes are lowest in sectors emphasizing:

• self-service/cashier sales models, or
• smaller-scale stores with limited staff such as gift, sport and hobby stores.

The next chart (Figure 54) presents income estimates from the Census 2001 for the employed labour force who worked full-time and for the full year in 2000 for wage-earners and for self-employed workers.

Figure 55 Structure of Income by Sector

The chart indicates that workers in the automotive retailing sector appear to receive the best compensation followed by the electronics and appliance stores. Reference to the earlier chart (Figure 11) on sector profitability highlighted the narrow margin in the automobile retail sector. The next chart presents similar income data for workers in each retail sector but specifically for the occupation of retail trade managers. For self-employed retail managers, incomes are noticeably lower in sectors such as miscellaneous retailers (gifts etc.) that emphasize small formats. Self-employed managers are likely often in store formats that are much different than from the stores with retail managers classed as wage earners.

Figure 56 Structure of Income for Retail Managers By Sector

It is interesting that wage-earning managers in the electronics and non-store sectors earn more than their self-employed counterparts. The relatively low incomes of managers in the general merchandise sector reflects the enormous variation in store format ranging from convenience and dollar stores to the large warehouse chains. A comparison of the relative income by sector in both charts with information on union coverage, presented below, suggests that relative sector incomes are apparently not strongly related to the degree of union coverage. The next chart (Figure 57) shows the degree of union coverage for employed workers. In other words, the chart excludes self-employed persons. Utilizing Labour Force Survey data, the chart shows that unionization is concentrated in the food and beverage sector. An all-retail average is shown, both with (15.4%) and without (5.9%) the food and beverage sector is shown for 2004. Table 61, in the statistical appendix, provides estimates of union coverage of employed workers over time. The data do not indicate any obvious trend. Estimates from the WES survey for 2001 indicate that the retail average is 11.5% and only 4.8% if specifically supermarkets are excluded.

Figure 57 Employed Workers — Union Coverage — 2004

The Survey of Employment, Payroll and Hours provides a perspective of labour compensation. The wage estimates are derived from payroll sources and exclude benefits. The table (Figure 58) below presents average weekly earnings by detailed sector as well as a relative indicator.

Average Weekly Earnings by Sector

Sector	AWE 2004	Relative	Sector	AWE 2004	Relative
44-45 Retail Trade	453.98	100.0%	4482 Shoe Stores	376.10	82.8%
441 Motor Vehicle and Parts Dealers	763.32	168.1%	4483 Jewellery, Luggage and Leather Goods Stores	405.10	89.2%
4411 Automobile Dealers	832.62	183.4%	4511 Sporting Goods, Hobby and Musical Instrument Stores	343.66	75.7%
4413 Automotive Parts, Accessories and Tire Stores	539.21	118.8%	4512 Book, Periodical and Music Stores	367.98	81.1%
4421 Furniture Stores	570.46	125.7%	452 General Merchandise Stores	353.16	77.8%
4422 Home Furnishings Stores	490.94	108.1%	4521 Department Stores	342.80	75.5%
4441 Building Material and Supplies Dealers	571.09	125.8%	4529 Other General Merchandise Stores	367.50	81.0%
4442 Lawn and Garden Equipment and Supplies Stores	464.25	102.3%	453 Miscellaneous Store Retailers	404.55	89.1%
445 Food and Beverage Stores	406.01	89.4%	4531 Florists	402.81	88.7%
4451 Grocery Stores	404.62	89.1%	4532 Office Supplies, Stationery and Gift Stores	377.34	83.1%
446 Health and Personal Care Stores	467.56	103.0%	4533 Used Merchandise Stores	472.87	104.2%
447 Gasoline Stations	334.28	73.6%	4539 Other Miscellaneous Store Retailers	403.68	88.9%
448 Clothing and Clothing Accessories Stores	378.54	83.4%	4541 Electronic Shopping and Mail-Order Houses	565.27	124.5%
4481 Clothing Stores	375.79	82.8%	4542 Vending Machine Operators	446.56	98.4%
			4543 Direct Selling Establishments	671.25	147.9%

Source: SEPH

Figure 58 Average Weekly Earnings by Sector

SEPH provides the advantage of more sectoral detail than any other industrial survey for such information. The survey covers only employees. Also, there is no distinction between full- and part-time employees. The relatively low average wages shown in sectors such as grocery stores reflect the significance of part-time employment relative to other sectors. This is reflected in data which show that average weekly hours for hourly rated employees in the grocery sector was 23.5 compared to 26.4 hours for the total retail sector in 2004. In contrast, employees in the automobile dealer sector average 35.6 hours per week. This relationship in average hours is one of the underlying factors in the wage relationship.

The next chart (Figure 59) shows the average weekly earnings by province indicates that retail compensation is strongest in Western Canada. However, somewhat stronger gains have been recorded by workers in Eastern Canada relative to other regions since 2001.

Figure 59 Average Weekly Earnings

One of the advantages of the Labour Force Survey as a household survey is that it is able to maintain the distinction between full- and part-time workers. The next chart (Figure 60) utilizes occupational data from the LFS for the broad retail sales category. This occupational category includes cashiers and retail supervisors so there is a broad mix within the group. The chart shows that the majority of the workers in this class are clustered at the lower end of the spectrum but with an increasing emphasis on part-time in the lower wage rates. The data indicate there were more than 120,000 persons, mostly full-time, earning more than $16 per hour in this occupational group.

Figure 60 Distribution of Hourly Wage Rates — Retail Sales Occupation

Non-wage benefits are an important part of the compensation picture and of labour conditions. Analyzing the incidence of health benefits particularly indicates, broadly speaking, that the size of the workplace is one of the key determinants of benefits being offered. This probably reflects the influence of the fixed costs of administering health benefit programs. Because the retail industry generally has smaller workplaces, the incidence of benefits is lower than the all-sector sample. Only 25.5% of retail and consumer service workplaces offered such benefits compared to an economy-wide average of 35.6%. Generally, in all sectors, non-wage benefits are likely to be most frequently offered to employees with full-time and longer tenure. The incidence is higher for managers than for sales occupations.

The next chart (Figure 61) provides some summary measures of the characteristics of employees receiving health benefits in the two samples used in the WES analysis. Generally, the sample excluding supermarkets shows a slightly lower incidence of health benefits for all of the standard attributes. This is not likely attributable to the unionization status but rather to the increased emphasis on smaller workplaces and enterprises in the non-grocery sample.

Figure 61 Incidence of Health Benefits — 2001

Supplementary data, presented in the appendix in Table 75, indicates that similar characteristics were apparent in the 1999 sample. Generally full-time workers are more likely to have health benefits. However, roughly 20% of part-time employees in retail have health benefits. This is in line with estimates for the full WES sample.

The next chart (Figure 62) analyzes the incidence of health benefits by occupation. As would be expected, the incidence of health benefits is higher for managers and professionals than for marketing and sales occupations.

Figure 62 Incidence of Health Benefits by Occupation — 2001

There does not appear to be a big impact from the inclusion of the more unionized grocery sector in the analysis. Comparison of the 2001 estimates with the 1999 sample (Table 76) indicates a significantly higher incidence of health benefits for managers and professionals. This suggests that firms were improving working conditions for their management level staff.