1. What Pays Off? Older Workers and Low-Wage Retail Jobs
Ellen G. Frank-Miller MA, Susan J. Lambert PhD, Julia R. Henly PhD The University of Chicago School of Social Service Administration
INTRODUCTION
RESULTS – QUESTION 1
RESULTS – QUESTION 2
The American workforce is “graying.” While the popular press reports on professionals delaying retirement or taking ‘bridge’ jobs, a growing number of older adults find themselves in lower-level hourly positions. Images of Wal-Mart greeters suggest a welcoming environment, but little is known about how older adults are received in frontline retail jobs. Older adults work for varied reasons, but in surveys financial need consistently tops the list of reasons for continuing or returning to work. Human capital approaches suggest age, as a proxy for experience, should result in a wage premium for older workers. Sociological literature, however, suggests older workers are often disadvantaged in the workforce due to negative stereotypes of their abilities. We draw on administrative data from a national women’s apparel retailer to examine older workers’ (age 55+) wages.
Our investigation is guided by two research questions:
1) How do older workers fare in terms of hiring, job type, full-time/part-time status, seniority, and wages?
 2) How is age related to starting and current wages, independent of worker characteristics?
We examined administrative data from the Work Scheduling Study, an investigation of a national women’s apparel retailer. Two samples of hourly workers were included in this analysis:
 1) Hourly workers hired between 8/06 and 12/09 (“New Hires”) (n=3,312);
2) Hourly workers employed as of 12/31/09 (“December 2009 Employees”) (n=1,339)
Descriptive statistics address Question 1 and multiple regression provides estimates of the relationship between age and hourly wage, controlling for job type, full-time/part-time status, seniority, race, and geographic region.
Our samples, New Hires and December 2009 Employees, are similar with respect to race (58% white, 42% other races) and geographic distribution.
With respect to job type, overall, new employees are most frequently hired to fill Sales Associate positions (83%) and represent a greater proportion of the New Hires sample than Sales Associates in the December 2009 Employees (67%). Conversely, Assistant Store Managers represent a smaller proportion of the New Hires sample (11%) than in the December 2009 Employees (27%). Consequently, more new hires obtain part-time jobs than workers employed as of 12/09, since Sales Associates are more likely than Assistant Managers to work part-time.
Workers age 55+ are more likely to be employed as Sales Associates than younger workers in the New Hires sample (p<.05). Similarly, workers age 55+ are also more likely to be employed as Sales Associates than younger workers in the December 2009 Employees sample (p<.05). However, workers age 55+ are no more likely to be employed part-time than younger workers in either sample
Overall, mean seniority for December 2009 Employees is 3.4 years; the median is 1.9 years. Employees age 55+ have more than twice the seniority of younger workers with a mean seniority level of 5.7 years, compared to 2.6 years for younger workers (p<.001). Relatively few employees age 55+ have less than one year of seniority (14%), compared to 40% of younger employees (p<.001). Nearly two-thirds of employees age 55+ have seniority levels over three years (63%), compared to 28% for younger employees (p<.001).
Overall, hourly wages for New Hires range from $7.25 to $ The mean hourly wage is $8.36; the median is $8.00. In contrast, hourly wages for December 2009 Employees range from $7.75 to $ The mean hourly wage is $9.80; the median is $8.50. Bivariate analyses indicate that there is no statistically significant difference in mean hourly wages for new employees age 55+ ($8.32 per hour) and younger employees, nor for older workers employed as of December 2009 ($9.94 per hour) and younger workers.
Our models explain most of the variance in observed wages for these employees (R2=.8336 for New Hires and R2=.8442 for December 2009 Employees). While age does help explain some variance in wages, our findings indicate that job type and full-time/part-time job status explain the most variance in wages.
Bivariate analyses indicate older workers are more likely than younger employees to work in lower level hourly jobs (Sales and Stock Associates) than in higher paid hourly jobs (Assistant Managers). Older workers are also no more likely than younger workers to be employed in full-time jobs, which tend to offer higher hourly wages. These findings suggest that older workers are at a slight disadvantage with respect to wages, lending support to a sociological perspective on wage differences. Further, when we examine the proportion of Store Managers (salaried workers) who are age 55+, we find that older workers are also less like to be employed in these better-paying jobs. However, when controlling for job type, full-time/part-time job status, seniority, race, and geographic region, we find that older workers are paid a slight wage premium, both when hired and as of 12/31/09. This finding seems to support a human capital explanation for wage differences when age is used as a proxy for work experience.
NEW HIRES
Age 55+
Under Age 55
Sales Associate*
89%
83%
Assistant Manager* 8%
11%
Part-time
90%
Full-time
10%
*p<.05
RESEARCH QUESTIONS & METHODS
MODEL 1:
MODEL 2:
NEW HIRES
CURRENT EMPLOYEES
August December 2009
as of
December 2009
DV: log hiring wage
DV: log current wage
b(SE) β
Age 55+
.010*
.018
.023**
.044
(no 0, yes 1)
(.004)
(.006)
Job Status
-.132**
-.245
-.134**
-.259
(full-time 0, part-time 1)
(.009)
(.010)
Job Type
-.372**
-.674
-.345**
-.653
(Assistant Manager 0,
Sales Associate + Stock Associate 1)
Seniority 3+ Years
n/a
.056**
.115
n =
3,312
1,339
R2 =
.834
.844
** p< * p< p<.10
December 2009 Employees
Age 55+
Under age 55
Mean seniority***
5.7 years
2.6 years
Seniority <1 year***
14%
40%
Seniority >3 years***
63%
28%
* p<.05 ** p<.01 *** p<.001
RESULTS – QUESTION 1
MEAN HOURLY WAGE
New Hires
December 2009 Employees
Overall
$8.36
$9.80
Age 55+
$8.32
$9.94
Under age 55
$8.37
$9.75
OVERALL
New Hires
December 2009 Employees
Sales Associate
83%
67%
Assistant Manager
11%
27%
Part-time
89%
71%
Full-time
29%
Notes: 1) Hiring wage is adjusted to 2009 dollars; 2) Models include control variables for race and geographic region