Next door to the new Amazon four-star store at Park Meadows mall, Lisa Roina helps a customer buy a stick of all natural Paw Wax from Leashes by Liz.
The co-owner of Makers Market is quite cheerful even if her store isn’t buzzing with customers like the new neighbor is. Her store doesn’t have fancy digital price tags showing real-time price fluctuations that are happening online. And where the Amazon store has a table displaying top-selling and trending items based on actual Denver customer data, Roina’s entire store is full of Colorado merchandise and items from local vendors and artisans.
Different merchandise, different clientele. “We can coexist,” she says.
But it’s Amazon’s new $15 an hour minimum wage, which started Nov. 1 nationwide, that will be tough to compete with, Roina said.
“We just can’t hire at $15 an hour. That’s why we’re here all the time,” she said about herself and co-founder Carol Konz, who also operate The District Shops at Cherry Creek.
The entry-level job market in Colorado is already a rough place for employers searching for applicants. While the number of jobs — and workers — has grown for all industries in the state, the growth in retail sales workers has pretty much been flat, according to data from the Colorado Department of Labor and Employment.
Local merchants aren’t just competing for workers with other retailers or restaurants. Entry-level workers today have their choice of tip-earning gigs, like driving for Lyft and Uber, or working for more than minimum wage at area warehouses, like three Amazon owns in metro Denver. Finding a good crew was difficult even before Amazon and its $15 wage arrived.
“The mall is really cutthroat. (Other stores) come around to stores and try to pinch employees. People working here come in and — I’ve been hit up — and they’re like, ‘Hey, how’s it going? Just so you know we’re hiring,’” said Roina, as she slid an invisible business card across the display case to make her point. “We’ve never done anything like that.”
Retailers have resorted to dangling perks, like hot cocoa, transit passes and cash giveaways, to retain employees. But that may not be enough. While the overall number of retail employees has grown since 2010, some communities in Colorado saw worker declines in 2017, including in Boulder, Pueblo and Greeley.
“Retail is pretty much close to flat growth. We have seen a lot of big box closures. I’d say there is definitely a shift in the retail industry,” said Ryan Gedney, senior economist with the Colorado Department of Labor and Employment. “It’s a tighter (labor) market, and big boxes and Amazon are increasing their wage base to attract the talent.”
Most of the state’s retail workers earn more than minimum wage, according to 2017 data when the state minimum wage was $9.30 per hour. At the time, Colorado Springs and Pueblo had the lowest starting average wage at $9.35 an hour. That compares to the current federal minimum of $7.25. Colorado’s minimum wage jumps to $11.10 on Jan. 1 and then to $12 in 2020.
Finding enough retail workers isn’t a crisis yet in Mesa County, where college students often fill the seasonal openings, said Celina Kirnberger, business services supervisor at Mesa County Workforce Center in Grand Junction. But it’s still a challenge.
“With the low unemployment rate, there’s not a lot of people looking for work,” she said. “What ends up happening is they (retailers) just end up waiting longer to fill the position. Sometimes they’ll adjust the wage. When the unemployment rate was higher, they were able to start at $12 an hour and were getting more applicants. Now, they’ll start the posting and if they can’t find anything, it’s ‘OK, let’s go ahead and up it a dollar.’ ”
When Amazon announced Oct. 2 that it would raise its minimum wage, the company said it was a response to critics chastising the company for seeking government incentives even as some of its employees relied on food stamps. In a statement, CEO Jeff Bezos said Amazon “decided we want to lead.” Within 48 hours of announcing the pay raise, the company said it received 70,000 applications for open customer-fulfillment jobs. More applications came in that first week than in the month of August.
But paying above minimum wage doesn’t always attract enough help. Longmont-based Circle Graphics, which prints items such as giant highway billboards and personalized photo canvases for retail clients, struggles to find enough workers for its Boulder County warehouse. And that’s tough during the holidays, when seasonal help swells its workforce to about 1,000 people, from 600.
“We’re trying to recruit at $12 to $13 an hour, and we’re still struggling,” said CEO Andrew Cousin. “The Colorado challenges are probably what you hear from everyone else. The labor market is terrible. … Sadly, to a certain extent, a lot of the growth we’re experiencing and managing, we’re pushing into other states.”
Retail wages have long relied on the balance of supply and demand, said Pamela Kelly, senior general manager for Park Meadows shopping center.
“Minimum wage is arbitrary. It adjusts itself depending on what the needs are of the labor market. In many cases, it’s their first job. (For those on commission) it’s a reward-type business. And retail can be a career business,” said Kelly, who’s worked in the retail industry for 40 years.
Retail jobs often supplement household income. Even at $15 an hour, a full-time worker would make $31,200 a year, excluding benefits. That’s less than half the state’s median income of $62,520, according to U.S. Census estimates.
As with any job, employees work their way up to higher wages. And retail sales jobs include selling furniture, appliances and automobiles. But right now, Kelly said, “In the Colorado market we aren’t able to hire anyone in at what would be an Amazon minimum wage.”
According to state data, retail workers with experience make an average of $16.48 an hour, with those in Greeley coming in with the state’s top average high of $19.83. And at the highest end of this level of experience in Greeley, the 90th percentile collect $30.99 an hour.
Employees at some Park Meadows merchants with “Now Hiring” signs acknowledged the challenge of hiring enough seasonal workers. But most referred questions to their out-of-state corporate home offices. And from a far distance, the employee market in Denver is doing just fine.
“In fact,” said Andrea Schwartz, a vice president of media relations for Chicago-based Macy’s in an email, “Macy’s has already hosted a hiring event on Oct 18 and feel good about our current staffing levels and the number of seasonal colleagues we plan to hire.”
Macy’s has already been offering all employees cash as part of its “Path to Growth Incentive Plan.” Other retailers also upped the ante this season. Target, hoping to hire 120,000 workers for the holidays, will pay a minimum wage of $12 an hour and offer a chance to win $500 gift cards. JCPenney plans random drawings, for things including $5,000 gift packages, and a 25 percent employee discount. Gap is offering a 50 percent employee discount on full-priced merchandise.
In Colorado, shopping centers and malls are offering their own incentives to help their retailers. At the Outlets at Castle Rock, which hosted a seasonal job fair on Nov. 2, the mall works with the community to create a pipeline of potential candidates.
“Apart from hosting job fairs to assist stores with finding qualified employees, The Outlets at Castle Rock work with the Town of Castle Rock and Castle Rock Chamber of Commerce to bring education opportunities to grow the candidate pool in Castle Rock,” said Clara Tsang, the Outlet’s director of public relations.
Over at Park Meadows, the mall offers an employee shuttle service, free transit passes and perks like hot cocoa and breakfast bars for all mall employees. The mall also has changed its approach to a tight labor market and holiday hiring, Kelly said.
“It’s really the employees’ market, where they can work where they choose,” Kelly said. “I wouldn’t say it’s more challenging, but we’ve become more acceptant of it. We used to do holiday hiring fairs and focus on seasonal help in October. Now we’re looking at it in July, August and September.”
The new Amazon store makes it easy for its sales people. All items were rated four stars or higher by online customers, so it’s already a curated gift selection. Amazon Prime members get a discount on many items and that paves the way for the store to sign up membership on the spot.
Items are also arranged much more like an online store, with dog toys next to pet fountains next to books on dogs — much like the “Customers who viewed this item also viewed” feature online.
And finding enough workers — 22 on day one and still hiring — wasn’t difficult, said Cameron Janes, Amazon’s vice president of physical stores.
“Certainly having a competitive wage and competitive benefits helps with hiring,” Janes said. “There is no question about that.”
Next-door neighbor Makers Market recently tried advertising its job openings for the first time on Indeed.com.
It didn’t go well, Roina said. About 20 people applied.
“We had 10 no shows,” she said.
But the employees who get hired often stick around, even if starting pay hovers about a dollar over minimum wage. There’s no corporate mentality. No clocking in or out. And the bosses are friendly, she said.
“The people we have are fantastic. But we don’t pay what everyone else can pay. It’s a labor of love” for employees, she said. “It really comes down to they have to like us.”
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