Minimum Wage Increase: Effect on the Retail Market Alexandra Chotin | Jody Finch | Donald Eaton | Gene Engholm | Aaron Goldblatt.

Alexandra Chotin | Jody Finch | Donald Eaton | Gene Engholm | Aaron GoldblattAlexandra Chotin | Jody Finch | Donald Eaton | Gene Engholm | Aaron Goldblatt

Federal Minimum Wage Introduced October 1938

Created to protect those producing goods for interstate commerce

1961 - Expanded to non-exempt employee

Retail Industry: OriginsRetailer - Sale of Goods for personal consumption from a fixed location

1846 - First U.S Department store established Marble Palace.

Retail began in large cities - expanded to urban population quickly via catalog mail order.

Retail Industry: Inside ViewUp Flow Down Flow

Production

Finished Product

Raw Material

AssemblyWarehouse/Distribution

Retail Channel

Consumer

Federal Minimum Wage

60% of Minimum Wage workers are between 16 and 30 years old

Typically low-skill high-labor jobs including retail and service which require little or no training.

Growth in Teen Unemployment Washington D.C began indexing

minimum wage in 1999.

Since implementation D.C has experienced a 10% growth in teenage unemployment verses a 4% growth nationally.

State Minimum Wage Laws

Match Federal

Greater than Federal

No Law

Less than Federal

Minimum Wage:

Effects on Retail - Frontline EmployeeIncrease in Minimum Wage Means:

- Fewer Employees Maintaining Inventory

- Fewer Employees assisting customers

- Worsened buying experience

Minimum Wage:

Effects on Retail - LogisticsIncrease in Minimum Wage means:

- Shift in shipping practicesSlower shipping = cheaper shipping

- Longer product lead time

- Increased planning and inventory labor

Minimum Wage:

Effects on Retail - WholesaleIncrease in Minimum Wage means:

- Increased Secondary Trading

- Decreased employment

- Increased Automation

- Increased Direct-to-Customer Sales

Minimum Wage:

Effects on Retail - AnalysisIncrease in minimum wage adversely affects all business but for retail the adversely affects entire process. Increased minimum wage causes:

Higher Production Cost

Higher Transportation Cost

Higher Front-line employee Cost

Increased pressure for direct market wholesale

Alexandra Chotin | Jody Finch | Donald Eaton | Gene Engholm | Aaron GoldblattAlexandra Chotin | Jody Finch | Donald Eaton | Gene Engholm | Aaron Goldblatt