Speaker 1: There's a well known gap between men and women when
Speaker 1: it comes to how much people get paid. But here's
Speaker 1: a statistic that's really eye opening. Workers at men's clothing
Speaker 1: stores earned fifty six percent more than employees at retailers
Speaker 1: of women's wear. It's a huge gap and seems troubling
Speaker 1: on the surface, but much of it can be chalked
Speaker 1: up to that classic phrase in economics, supply and demand.
Speaker 1: Welcome to Benchmark. I'm Scott Landman, economics editor with Bloomberg
Speaker 1: News in Washington, and now I'm Daniel Moss, economics writer
Speaker 1: and editor at Bloomberg View in New York. So, Dan,
Speaker 1: let's talk a little bit about something that we don't
Speaker 1: cover too much on this show. Can you tell me
Speaker 1: how you normally shop for clothes? Do you do you
Speaker 1: go to the big department stores or do you frequent
Speaker 1: some of those boutiques that are springing up all over
Speaker 1: your Brooklyn neighborhood. Well, in our idiot neighborhood, it's mainly
Speaker 1: bars and restaurants, so not a lot of clothes shopping there.
Speaker 1: I did buy something the weekend before last, but I
Speaker 1: used a gift card that I was given for Christmas.
Speaker 1: As for me. I don't really shop at stores that
Speaker 1: cater just two men specifically, I probably go to places
Speaker 1: that sell to both men and women. But we're gonna
Speaker 1: talk today about stores that are catering more to high
Speaker 1: end customers and why that's driving this wage gap that
Speaker 1: I was talking about at the top. So let's bring
Speaker 1: in two colleagues who will be our guests today. Katya
Speaker 1: Dmitrieva is a reporter in our Washington bureau covering the
Speaker 1: US economy who recently transferred here from Canada. It's actually
Speaker 1: her second time on the podcast. Last time she was
Speaker 1: in Toronto talking about the crazy real estate market there. Katia,
Speaker 1: thanks for joining us, glad to be here. And our
Speaker 1: other guest is Lindsay Rupp. She's a reporter in our
Speaker 1: New York office covering retail, and she also recently concluded
Speaker 1: a run as co host of Bloomberg's Material World podcast.
Speaker 1: You can listen to all of those episodes wherever you
Speaker 1: like to find podcasts. Lindsay, thanks so much for being
Speaker 1: with us on Benchmark. Thanks for having me. So I
Speaker 1: wanted to talk a little bit about how we got
Speaker 1: this story first. This was pretty simple. We were looking
Speaker 1: at wage data that the Labor Department provides and put
Speaker 1: it into all into a spreadsheet, sorted it by industry,
Speaker 1: and something really funny came up. I noticed that men's
Speaker 1: clothing stores were showing huge increases in wages and the
Speaker 1: wages that women's clothing stores were actually declining. So I
Speaker 1: went to Katya and I said, why don't we write
Speaker 1: an article about this? Could you look into it? So Catchia,
Speaker 1: tell us a little bit about what you found out. Yeah,
Speaker 1: and I remember you bringing that up in the newsroom,
Speaker 1: and I think the reaction was all very shocked, because
Speaker 1: you would think that at least in this industry that's
Speaker 1: been so traditionally catered to women, you would have that
Speaker 1: potentially be reversed. But instead, what I found is that
Speaker 1: if you work at a men's clothing store, especially right now,
Speaker 1: you're likely to be paid a lot more than women's stores.
Speaker 1: And some of it is related to the gender wage gap.
Speaker 1: You see this all across industries in North America, but
Speaker 1: it doesn't really explain in particular, like you said, this
Speaker 1: huge difference that's happened, especially in the last two years.
Speaker 1: So I started to call economists as well as Heidi Hartman,
Speaker 1: who specializes in labor economics, and we talked about this
Speaker 1: issue and when I mentioned supply and demand as affecting
Speaker 1: this market, what can you tell us about that? Well,
Speaker 1: the reality is that there's just a smaller pool of
Speaker 1: men's clothing store workers. There's a smaller pool of men
Speaker 1: to choose from to work in these clothing stores. And
Speaker 1: especially at a time when the labor market is so
Speaker 1: tight already and you're dealing with this smaller pool of workers,
Speaker 1: you have to pay up in order to get them.
Speaker 1: As you said, supplying demand. So if you want to
Speaker 1: get those highly skilled workers for these stores like Hugh
Speaker 1: and Cry where I went in Georgetown in Washington, then
Speaker 1: you're going to have to pay them more. And not
Speaker 1: only are is the demand for these workers higher or
Speaker 1: there's a smaller pool of them, but the sales at
Speaker 1: men's stores are rising and women's where retailers are kind
Speaker 1: of struggling. Lindsey, could you tell us a little bit
Speaker 1: about that. Yeah, absolutely, So. One thing I've been hearing
Speaker 1: a lot in the industry lately is that men are
Speaker 1: the new women all the sudden. Men care a little
Speaker 1: bit more about how they look, and that's showing up
Speaker 1: in beauty it's showing up in apparel, and that's not
Speaker 1: all men, but men of a certain wealth level in particular.
Speaker 1: So that kind of explains a little bit why their
Speaker 1: sales might be rising at a faster rate. But keep
Speaker 1: in mind there's still not a huge portion of the
Speaker 1: overall retail sales. Women still do the bulk of the purchasing,
Speaker 1: they do the bulk of the spending. They're also just
Speaker 1: a lot more women's apparel stores. I mean, apparel retail
Speaker 1: right now is going through this existential crisis. I mean
Speaker 1: it's in total upheaval. In a lot of places, there
Speaker 1: are too many stores, so everybody's trying to figure out,
Speaker 1: how can I have the right number of stores in
Speaker 1: the right locations. They're trying to grapple with online retailers
Speaker 1: who are springing up almost out of nowhere, have very
Speaker 1: low barriers to entry, and even if they only sell
Speaker 1: a couple hundred thousand dollars worth of goods, they're still
Speaker 1: taking away incremental business from these bigger guys. So it's
Speaker 1: a tough time. And just to be clear what we're
Speaker 1: talking about here, are we talking about two employees same store,
Speaker 1: one male, one female. The female gets less or are
Speaker 1: we saying that stores that kate predominantly to men pay
Speaker 1: more than stores that kater predominantly to women. It's stores
Speaker 1: that cater predominantly to men or women. But at these stores,
Speaker 1: what I was told is they're more likely to employ
Speaker 1: people of the same sex. So if it's a men's
Speaker 1: clothing store, they're more likely to hire more men. If
Speaker 1: it's a women's clothing store, more likely to have more women.
Speaker 1: And can you tell us a little bit catya about
Speaker 1: the store you're mentioning. It's called Hugh and Cry and
Speaker 1: it's in DC, and it's kind of a microcosm maybe
Speaker 1: of what's happening in this market right now. Yeah, it
Speaker 1: was very interesting because you are on this main drag
Speaker 1: Wisconsin Avenue, and it's full of retail shops and a
Speaker 1: lot of them are of women's specific retail. And then
Speaker 1: you kind of turn this side street and then down
Speaker 1: a bricklined alleyway, narrow alleyway, you come to the end
Speaker 1: to this door. It's almost like a secret club, and
Speaker 1: here is Human Cry. It's a men's boutique and it's
Speaker 1: outfitted in a very mid century modern furniture, lots of
Speaker 1: hanging art on the wall and you go around. If
Speaker 1: you're shopping there, you just pick items off the shelf,
Speaker 1: can try on in the store. You can also order
Speaker 1: it online if they don't have it, and get it
Speaker 1: delivered to your door or in the store. And it's
Speaker 1: very specific to the client. It's not your traditional you
Speaker 1: walk into a retailer and you know, hey, how's it going.
Speaker 1: Can help you find anything? Can I tell you about
Speaker 1: all the discounts we have in the store. It's more like,
Speaker 1: you come in, do you want me to get you
Speaker 1: anything to drink? Um? What are you looking for? They
Speaker 1: can tell what your size is by looking at you.
Speaker 1: And then they have some clients who come in the
Speaker 1: day of their wedding and they're looking for a white shirt,
Speaker 1: or if they're working on the hill and they happen
Speaker 1: to spill some coffee, they can get a shirt within
Speaker 1: the next couple of hours. So it's it's definitely what's
Speaker 1: happening across the board this trend. Let me take a
Speaker 1: step back, you know, Lindsay, for a couple of years,
Speaker 1: I've been hearing in news meetings and hearing on TV
Speaker 1: that retail is dying, the death of them all, the
Speaker 1: death of retailing. So if this is going out, why
Speaker 1: does it really matter anyway. I don't think retail is
Speaker 1: ever going to go away. I think the death of
Speaker 1: retail has been largely overstated. It's definitely changing and a
Speaker 1: lot of retailers will die. Um. Don't get me wrong.
Speaker 1: We've seen a record number of bankruptcies and we're probably
Speaker 1: going to continue to see a lot of bankruptcies in
Speaker 1: retail in the next two to five years. Everyone seems
Speaker 1: to be on the same page about that. A lot
Speaker 1: of malls are going to go away. We have too
Speaker 1: many malls and too many stores, and that's a difficult
Speaker 1: business to correct when you're this far down the line.
Speaker 1: It's also really easy to get into this business, so
Speaker 1: there's more competition than ever before. But that said, people
Speaker 1: are still buying things. They want to buy things. They're
Speaker 1: just buying things differently, or they're spending less money on
Speaker 1: apparel and more money on things like technology, eating out,
Speaker 1: going on a cool vacation. As purchases migrate to the web,
Speaker 1: isn't gender disparity in wages going to go away? I mean,
Speaker 1: if you're doing this from your computer or your tablet
Speaker 1: or your phone, you don't know who the person at
Speaker 1: the other end is. It could be anyone anywhere. Why
Speaker 1: does it matter? Or it could get worse if more
Speaker 1: men are working at online sites and they're the ones
Speaker 1: making more money. Could that happen to right? But if
Speaker 1: you're talking about someone who's behind a click at a site,
Speaker 1: then the employee is not necessarily going to care whether
Speaker 1: they hire a man or a woman, are they? It
Speaker 1: depends on the job probably. I mean a lot of
Speaker 1: these web retailers they don't necessarily even own any inventory.
Speaker 1: They might have some designers, some web folks, and then they,
Speaker 1: you know, contract out to people in China or Asia
Speaker 1: who make the goods, and they contract out to people
Speaker 1: to ship the goods. They contract out to a distribution
Speaker 1: center and a warehouse. So who knows who that retailer
Speaker 1: actually employs directly. Um. You know, warehouse and shipping jobs
Speaker 1: do tend to be male dominated. Right now. The retail
Speaker 1: industry is a heavily female industry. The bulk of people
Speaker 1: who work in retail are women, often women of color. Um,
Speaker 1: So we are going to see that job change as
Speaker 1: the retail landscape of America changes, that's for sure. Well,
Speaker 1: for a store that Kate is too main. Why does
Speaker 1: it matter to a man whether the person serving them
Speaker 1: in the store is a man or a woman. I mean,
Speaker 1: you just said most of the workers are female. What
Speaker 1: why is that a lot of stores sell women's goods.
Speaker 1: Retail has always been seen as sort of a women's
Speaker 1: dominated industry, you know, and that it's a lot of
Speaker 1: women who shop. Women make up something like of the
Speaker 1: purchasing decisions and actual execution. And it's also seen as
Speaker 1: you know, sort of low skill work. It's highly interpersonal work.
Speaker 1: So it's been a largely female industry for a long time.
Speaker 1: I don't necessarily know that a man would walk into
Speaker 1: a men's boutique and say, oh, I don't want to
Speaker 1: shop here because only women are associates. I don't know
Speaker 1: that it's even that overt. I think you want to
Speaker 1: talk to someone who you feel has a connection to
Speaker 1: what you're buying, can understand, can give you a personal advice,
Speaker 1: can say, you know, I wear this size jacket and
Speaker 1: it's a little short in the risks, and he's going
Speaker 1: to know exactly what that means. It's not that a
Speaker 1: woman couldn't do that job, but like tends to look
Speaker 1: for like and if you're a men's retailer catering two men,
Speaker 1: you might hire more men. That's exactly what James Majuski
Speaker 1: from Human Christ said as well. He said there employees
Speaker 1: tend to be like mannequins for their clothing. So when
Speaker 1: guys come in, they look at the person in front
Speaker 1: of them and they might say, Hey, that's a nice jacket.
Speaker 1: Where did you get that? Oh, your own store? Can
Speaker 1: you show me? Can I try it on? All right,
Speaker 1: let's turn to the national implications of this story that
Speaker 1: we've been talking about. We write a lot about the
Speaker 1: national labor market about wages here at Bloomberg, and one
Speaker 1: story we've been covering pretty closely is that wage growth
Speaker 1: for workers on a whole has been fairly weak during
Speaker 1: this recovery, at least at the late stage. With the
Speaker 1: unemployment rate just over four percent, which is the lowest
Speaker 1: level since two thousand. Some people think that wages should
Speaker 1: be rising at a faster clip, and yet this men's
Speaker 1: clothing market seems to show that if sales are rising
Speaker 1: and you have a relatively small labor pool, then wages
Speaker 1: can actually pick up at a fairly rapid clip. Cat
Speaker 1: What did people tell you about whether this means that
Speaker 1: wages might pick up more broadly, Well, you're right, it
Speaker 1: is showing the same dynamics that we've been seeing and
Speaker 1: hearing about for some time in the US economy. At
Speaker 1: a time when you've got this low unemployment rate, why
Speaker 1: aren't companies paying more to retain workers or to attract workers?
Speaker 1: And here in specifically in men's clothing, we're seeing that
Speaker 1: playing out. So the question is when are we going
Speaker 1: to see that in the broader economy in other sectors.
Speaker 1: This is perhaps not going to mean an immediate effect.
Speaker 1: This is not like our Bloomberg economist Yelena said on
Speaker 1: the phone to me. She said, you can't draw a
Speaker 1: direct correlation, but there's certainly the same dynamics playing out.
Speaker 1: So it does show. It's should provide people with some
Speaker 1: optimism that we can start to see wage growth picking up. Lindsay,
Speaker 1: is this something that's unique to clothing retailing in the
Speaker 1: United States or is this part of a worldwide picture
Speaker 1: the wage question. I don't know the answer to that. Actually,
Speaker 1: the US has a really specific apparel retailing landscape that's
Speaker 1: that's a lot different than it is in Europe or
Speaker 1: in Asia. You know, in Asia, people are much more
Speaker 1: comfortable shopping online, and Europe there are a fewer stores generally.
Speaker 1: So the US really is in a special situation and
Speaker 1: that has too many stores. There's too much supply, and
Speaker 1: I'm sure that that's affected wages accordingly. Um, But you know,
Speaker 1: retailers are raising their wages because as they need to
Speaker 1: compete for better talent. I think a lot of times
Speaker 1: this is seen as an entry level job. About one
Speaker 1: in three people, it's estimated, start their careers in retail.
Speaker 1: That's an astounding fact in the US. But you know,
Speaker 1: as we close stores and have fewer retail associates, that
Speaker 1: is likely to change. How unionized is apparel retailing and
Speaker 1: other unions doing anything about this, That's a great question.
Speaker 1: It's not a highly unionized industry. The unions are very
Speaker 1: vocal about pay, especially because you know, retail talks about
Speaker 1: how they need to have better experiences and service in
Speaker 1: their stores. They need to offer more customization. If you're
Speaker 1: actually going to walk into their store, you have to
Speaker 1: walk away saying like, Wow, what a great time I
Speaker 1: had in that apparel store. But at the same time,
Speaker 1: they're not paying people to provide that better service or
Speaker 1: recognizing the skills it takes to do that. Um. So
Speaker 1: the unions have been very vocal, but so far not
Speaker 1: very effective because these people are seen as you know,
Speaker 1: disposable or I don't want to give them benefits. I
Speaker 1: don't want to provide people with you know, full time
Speaker 1: schedules and hours. I don't want to raise wages because
Speaker 1: I'm really strapped for cash and there's going to be
Speaker 1: somebody else in line to take that job if this
Speaker 1: person leaves. So Lindsay or Caca, is there an opportunity
Speaker 1: for women's clothing retail to kind of go down the
Speaker 1: road that men's has gone down or are they just
Speaker 1: going to basically stay permanently different markets. Well, I think
Speaker 1: that there are a lot of apparel retailers that cater
Speaker 1: to women who are a lot like human cry who
Speaker 1: you know, are small, they have a specific customer. That
Speaker 1: customer is very loyal, and probably they have higher wages
Speaker 1: and strong margins. But I think women's apparel overall, the
Speaker 1: key is to have a compelling product that people want
Speaker 1: to pay full price for. Whether you're a Gap or
Speaker 1: Jay Crew or Nemon Marcus. You know, that's the ultimate goal,
Speaker 1: is to have the best product at a price that
Speaker 1: people see as fair. Um, that's part of the reason
Speaker 1: people love t J Max. I mean, when's the last
Speaker 1: time he walked into a t J Max and said,
Speaker 1: what great customer service I'm having. It's just a very
Speaker 1: different value proposition. And it's interesting that you pointed out
Speaker 1: that stores like Human Cry do exist in women's wear.
Speaker 1: During the reporting of this story, when I went across
Speaker 1: the street from Human Cry to the Loft store, which
Speaker 1: I used as an example, and then right beside it
Speaker 1: is made Well and made Well's parent, Jay Crew has
Speaker 1: had several consecutive quarters of losses, but made Well is
Speaker 1: doing very well. So you do have examples in women's
Speaker 1: where where you know the growth is continuing and their
Speaker 1: employees might actually be compensated for that as well. What's
Speaker 1: the industry doing about this absolutely shocking pr they've got here.
Speaker 1: It's not just that wages a low, but that there
Speaker 1: is this gender disparity which seems like a relic from
Speaker 1: well the mad Men era talking about suits. The industry
Speaker 1: doesn't really seem to have much of a response. I mean,
Speaker 1: the people that I reached out for the story didn't
Speaker 1: really have anything to say. I mean, I just don't
Speaker 1: think that the industry is very focused on wages, especially
Speaker 1: at a gender level right now. I think they have
Speaker 1: more existential issues to focus on in a lot of
Speaker 1: cases and staying in business, figuring out how to close stores.
Speaker 1: I mean, I think that they would argue that they
Speaker 1: pay competitively and that they have equal opportunity hiring practices.
Speaker 1: I think that they would take issue with the data
Speaker 1: at large and say, oh, that's a bigger problem, but
Speaker 1: that's not me push you a little bit on that.
Speaker 1: I mean, they've hurried in the past to get ahead
Speaker 1: of bad pr When ten story sweatshops making T shirts
Speaker 1: in the US in Bangladesh have collapsed and not only
Speaker 1: have all the people died, but all the dyes have
Speaker 1: gone under the river and poison the village water, etcetera, etcetera.
Speaker 1: There's a big organic clothing fair trade clothings going on.
Speaker 1: They didn't have any problem getting ahead of that, or
Speaker 1: rather responding quickly, Well, this probably doesn't rise to the
Speaker 1: level of some major scandals yet, Dan, would you say
Speaker 1: or lindsay, well, look, I mean you've seen retailers like
Speaker 1: Walmart come out and say, oh, thanks to the US
Speaker 1: tax overhaul, we're going to raise our starting minimum wage.
Speaker 1: That's great, but I think a lot of people are
Speaker 1: doing that because they need to raise wages to be competitive.
Speaker 1: So you've seen retail at large start to raise its wages.
Speaker 1: But retail has been at the bottom of the barrel
Speaker 1: and pay for a long time, and they've never been
Speaker 1: penalized for it before. Ultimately, your shopper walks into the
Speaker 1: store and cares whether you have the right pair of
Speaker 1: jeans at a price that they think is fair, and
Speaker 1: whether or not they have to wait in line for
Speaker 1: a long time to get them. They don't think about
Speaker 1: how much the person behind the counter or the person
Speaker 1: who helps him into the fitting room is necessarily making.
Speaker 1: They just want to buy their product. And as callous
Speaker 1: as that sounds, that's what we've seen with fair trade
Speaker 1: apparel to people say, oh, it's horrible about factory collapse ups,
Speaker 1: but they still walk into H and M and bio
Speaker 1: four dollar bikini. There's just still a disconnect in our society.
Speaker 1: So what it's really going to take is for us
Speaker 1: to value that service more, to value the jobs that
Speaker 1: these people are doing more as a society, to really
Speaker 1: see the wages rise along with them. All right, Well,
Speaker 1: why don't we come back in a year and see
Speaker 1: whether this wage gap has widened even further or if
Speaker 1: Amazon and t J Max have just destroyed everybody in
Speaker 1: the meantime, Katia Dmitrieva and Lindsay Ruth, thank you so
Speaker 1: much for joining us today. Thank you, thank you. I
Speaker 1: think we'll have to come back and talk about how
Speaker 1: the death of retail was exaggerated. That's the real takeaway
Speaker 1: here some recanting from the retail team. Benchmark will be
Speaker 1: back next week. Until then, you can find us on
Speaker 1: the Bloomberg terminal, Bloomberg dot com, our Bloomberg app, as
Speaker 1: well as wherever you enjoy podcasts, including Apple podcasts, overcasting, Stitcher.
Speaker 1: Please take the time to rate and you the show,
Speaker 1: and you can also find us on Twitter. You can
Speaker 1: follow me at at Scott's Landman. Dan You're at most
Speaker 1: under School, Ko, Katia, You're at Katia d m I.
Speaker 1: And Lindsay your Twitter handle is l c rup. Benchmark
Speaker 1: is produced by Toper foreheas the head of Bloomberg Podcast
Speaker 1: is Francesca Levie. Thanks for listening. See you next time.