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Retail Workers Fight to Get a Cut in the Era of E-Commerce

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How do you fairly pay a retail worker in the age of online shopping?

Inflated rat at Bloomingdale’s worker union rally Photo: Drew Angerer/Getty Images

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“They tried to disregard the union and I said nooo, nooo, nooo!” At a rally for a new Bloomingdale’s employee contract, a band plays a parody of Amy Winehouse’s “Rehab” while scattered voices in the crowd register the tune and sing along.

The workers, who are part of the Local 3 United Store Workers under the Retail, Wholesale and Department Store Union (RWDSU), are contained on a single block next to Bloomingdale’s 59th Street location in Manhattan. The area for the rally is compact enough that it can fit a large inflated rat inside the barricades without impeding traffic.

Still: It’s crowded. Bloomingdale’s employees, Local 3 leadership, union members from New Jersey and Connecticut, higher-ups at the RWDSU, and local city councilmen and women have all gathered to voice support for what they call a fair contract. Local 3’s website reads that it’s “fighting to keep what we have and to get you a real wage increase with decent medical benefits.” But stagnant wages and healthcare aren’t the only issues Bloomingdale’s employee have to contend with. Much of the rally’s time is dedicated to another topic that has intensified contract negotiations: the effects of e-commerce on the retail worker.

“The negotiations are a lot different this year because of online, and the changing climate of retail sales is making this extremely difficult,” says Mary*, 59, a sales associate who’s been with Bloomingdale’s for 15 years and is also part of the union’s executive board. Bloomingdale’s did not respond to Racked’s request for comment. When Bloomingdale’s and the union last negotiated this contract in 2012, Macy’s (Bloomingdale’s parent company) was riding a 5.6 percent increase in sales, and its CEO, Terry Lundgren, had seen his compensation package shoot up to $14.5 million, a 23 percent increase, the year prior.

Ask any high school senior, and they’ll tell you a lot can change in four years. It’s safe to assume these have not been the best four years of Macy’s and Bloomingdale’s life. Macy’s is set to close 68 stores this year and let go of 10,100 employees, and profits dropped 13 percent in the fourth quarter of the 2016 financial year. The best news coming out of Macy’s is that things aren’t as bad as they could have been. “I’m on one of the committee for wages and earnings, and just the feeling in the room when you go in, it's very cold and they've got an attitude like, ‘You're not getting anything,’” says Matt*, 54, a shop steward for the furniture department who’s spent 20 years with Bloomingdale’s.

Protestors at Bloomingdale’s rally Photo: Drew Angerer/Getty Images

The one part of Macy’s and Bloomingdale’s portfolio that is on the rise is online sales. Orders increased 25 percent over the holiday season, according to The Los Angeles Times. While this might seem like a revenue stream that doesn't involve the union workers, the reality is a lot more complicated. “People will come in and take an hour or more of our time looking at furniture, and then they'll say ‘Can I buy this online?’” says Renee*, 27, a sales associate working in the furniture department. How can the man hours of employees — all of whom work on commission — be reflected in the online sales they help make?

Employees also note that sales associates often have to do the pull and prepare of an online pick-up order and handle returns purchased online without being compensated. Time spent handling products bought from the website detracts from time that could be spent making sales, and thus commission.

There’s also an intangible contribution that these sales associates make, according to RWDSU president Stuart Appelbaum. Appelbaum argues that with in-store sales growing more precious by the day, you need accomplished associates able to drive those purchases, both at Bloomingdale’s brick-and-mortar locations and its website. “It's more important than ever that Bloomingdale's ensures a positive in-store experience that translates to online sales,” says Appelbaum. “The workers here create the mystique for the Bloomingdale's brand that transcends the brick-and-mortar stores.” Bloomingdale’s messaging does make mention of its “passionate focus” on customer service.

“We think that Bloomingdale's is making a huge business mistake by undervaluing their employees,” Appelbaum asserts. It’s a tale we’ve heard on repeat for the past half-year: the battle between the everyday working person and the elite. “Bloomingdale’s Macy's Inc. generated hundreds of millions of dollars in profits that the workers helped to produce,” says Cassandra Berrocal, the president of the Local 3 union, in a speech. “The company’s executives have been compensated; it is time that the workers were, too.” And before leading the crowd in a chant, Berrocal instructs them: “Let's send a clear message to the fat cats in the ivory tower.”

The message was certainly rattling around inside of the walls of Bloomingdale’s. Matt says that corporate sent an email discouraging employees from attending the rally, claiming it might affect sales negatively. He and Renee both said their employees were nervous about being punished or at least “profiled” for attending the rally as a result of the email.

Protestors at Bloomingdale’s rally Photo: Drew Angerer/Getty Images

In the stead of spooked salespeople were local city councilmen and women eager to turn up the volume on the rally with their own voices. Representatives related to the crowd by relaying stories of their own families working as part of a union for decades. Mark Treyger, a city council member from Coney Island, Brooklyn, spoke so enthusiastically that quoting him would require filling the rest of this page with exclamation points. Once he was done speaking, a clearly energized woman in the crowd said, to no one in particular, “Damn, I like that boy!”

It’s clear who their messages were for. “We need to raise standards for retail jobs at a time when countless New Yorkers, including many women, people of color, and immigrants, are trying to support families while working in retail,” Appelbaum said in his speech.

The low-wage retail workforce is 63 percent women and 35 percent non-white, according to statistics compiled by More than a quarter of these workers — 26 percent — are also in or near poverty.

Berrocal says during her speech that the union is looking for a fair contract so that workers can “put bread and butter on our tables.” Those at the rally have all showed up for different reasons: for fair compensation, to keep Bloomingdale’s from taking away retirement pension plans and seniority rights, for funding for medical and sick days. Others, like members of nearby unions, believe these negotiations could have ripple effects on future deals betweens labor and corporations, and they hope the Local 3 will show up to support their rallies when the time inevitably comes. Others aren’t totally clear about what these negotiations entail, but know it’s important to support their fellow employees. “If it affects others, it affects me,” says Dwayne*, 44, who’s worked in the stocking department for 19 years. “It's all about unity and support.”

The chorus of voices chanted, sang more spins on popular songs, and participated in many, many call-and-responses from speakers in a show of togetherness. Mary says that the union wouldn’t hesitate to strike if it came to that, but there’s a couple weeks until the contracts needs to be renewed on May 1st. Negotiations are going “so-so,” she says. Appelbaum only promises that “we’ll see May 1st.”

*Names have been changed.