Anyone looking for a temporary job during the upcoming holiday shopping season might have to look a little harder to find one than in past years.
U.S. retailers are expected to add only 410,00 seasonal positions this year, the lowest number since 2008, according to Challenger, Gray & Christmas Inc., an outplacement and career transition service in Chicago.
That prediction is based on non-seasonally adjusted data from the U.S. Bureau of Labor Statistics.
By comparison, U.S. retailers last year added 509,300 jobs during the holiday season, which Challenge defines as the last quarter of the year. That was a 27.4 percent drop from 2021, when 701,400 seasonal jobs were added nationwide, according to the bureau.
Despite that, the U.S. retail market is in reasonably good shape heading into the last three months of 2023. Fifteen million five hundred and thirty thousand people had retail jobs in August, more than were employed in that sector right before the pandemic hit in the spring of 2020.
However, that number is lower than in 2018, when 15,713,500 worked in retail. U.S. retail employment peaked in December 2016, when 16,338,300 retail jobs were filled, according to the bureau.
One reason for this year’s less-than-optimistic forecast is that retailers announced 55,755 job cuts by the end of August, a 524 percent increase compared with the first eight months of 2002 when only 8,940 retail jobs were eliminated.
The overall picture is of an economy that is slowing, but only slightly, which means hiring has slowed as well. With labor costs and interest rates both rising, ‘consumers and employers [will] feel the crunch,” Challenger predicts.
“With inflation slowing, companies, particularly retailers, won’t be able to pass increased labor costs to the consumer as easily,” said Andrew Challenger, senior vice president and workplace/labor expert, in the forecast. “This could lead to more cuts, rather than more added positions, as evidenced by the increase in job cuts in this sector.”
There have been only a few seasonal hiring announcements this year. The largest so far is Amazon, which plans to hire 250,000 seasonal workers nationwide, including 30,000 in California.
One year ago, the online retail giant said it expected to hire 150,000 seasonal workers.
UPS says it expects to hire 100,000 workers to help it get through the Christmas shopping rush. Most of those positions will be delivery drivers and package handlers in full and part-time positions, according to a statement.
That’s the same number of temporary workers Amazon hired one year ago, but in 2023 the temporary workers will be paid more money. In August, UPS and the Teamsters Union agreed on a contract that would pay seasonal workers $21 to $23 an hour, depending on their jobs.
In 2022, package handlers started at $15.50 per hour, and delivery drivers were paid at least $21 an hour, according to reports.
“We’re proud to offer industry-leading pay for UPS part-timers, full-timers, and seasonal employees alike,” said Nando Cesarone, president and executive vice president of UPS’ U.S. operations, in a statement.“We’re looking forward to delivering another leading on-time performance this holiday season and helping thousands of workers kick off their UPS careers in the process.”
Target announced plans to hire 100,000 seasonal workers this year, the same as the last two years, while Macy’s says it will hire 38,000 and 1-800-FLOWERS.COM will bring on 8,000 extra holiday workers. Kroger, the supermarket and multi-department store chain, said it will hire “thousands” of holiday workers but did not release a specific number.
That leaves some major retailers – Kohl’s (90,000 last year), U.S. Postal Service (28,000) Michaels (15,000), and Dick’s Sporting Goods (9,000) – among those still to be heard from.
“Seasonal employers have a few issues to grapple with in the coming months,” Challenger said in the statement. “One is the cost of labor, which limits the [ability] to add workers,” “Another is whether consumers will continue to spend at the same rate as they are now. The third issue is one that has been fairly constant since the pandemic: Can they attract workers?
Spending patterns have changed now that COVID-19 is no longer the threat that it once was, said Robert Kleinhenz, a private economic consultant in Long Beach whose clients include retail businesses.
“As we move further away from the pandemic, people are spending more money on services than on goods,” Kleinhenz said. “They’re going on vacation or they’re going to dinner in a restaurant because they can, unlike when the pandemic was happening.
“That’s been the trend at the national level for a while.”
Persistent fears about an economic slowdown have also led to people curtailing their spending, which means retailers don’t need to hire as many temporary workers.
“There were fears about a recession last year and again this year, and it didn’t happen either time,” Kleinhenz said. “ But those fears can still affect people’s spending.”
Another reason for the retail spending slowdown has been the slow disappearance of money from the federal assistance programs that helped individuals and businesses get through the pandemic, like the American Rescue Plan Act and the Paycheck Protection Program, according to one local economist.
“That money has helped keep the economy afloat, but most of that is gone now,” said Jay Prag, professor of economics at the Drucker School of Management at Claremont Graduate University. “People aren’t spending as much, and consumer confidence is down. It [the Challenger forecast] is pessimistic, and I agree with it. I believe it’s accurate. I might even be a little more pessimistic than it is.”