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