What Pays off? Older Workers and Low-Wage Retail Jobs

Purpose: 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. We draw on administrative data from a national women's apparel retailer to examine older workers' (age 55+) wages. 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. Our investigation is guided by these 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?

Method: We examined wages for two samples of female workers: hourly employees hired between August 2006 – March 2009 (N=2,580); and hourly workers employed as of March 2009 (N=1,396). 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.

Results: Question 1: Fewer than 10% of workers hired between 2006 – 2009 were 55+; 2% were 62+. Older workers comprise a larger proportion of current employees. As of March 2009, 24% of the workforce was 55+ and 9.6% were 62+, reflecting the significantly longer seniority of older versus younger workers (5.4 years among workers 55+ versus 2.5 years for others). A smaller proportion of older versus younger workers was hired into, or currently works in, full-time jobs or management positions. Although older workers have, on average, greater seniority in the firm, bivariate analyses indicate their average hourly wage ($8.27) is not significantly different from younger workers ($8.29). Question 2: On the face of it, results of regression analyses support human capital propositions that age pays off in terms of wages. After controlling for personal and job characteristics, being age 55+ (or 62+) is positively related to both starting and current wage. However, the variables that explain the most variation in both wage rates are job type and full-time/part-time status, and, as noted above, older workers were significantly less likely than their younger counterparts to work in full-time or management positions.

Implications: A growing number of older adults live in poverty; the current recession seems likely to exacerbate this trend. Our results suggest the story of older workers in low-wage jobs is not straightforward. Although age may bring some dividends, older workers may be disadvantaged by the jobs in which they are placed and remain. Understanding the job conditions older workers face is important when considering the economic fortunes of workers as they age.