When she was 15, Diana Aldaz got a job selling trendy, low-priced clothing at a Sirens store in a Brampton mall. Her work hours were all over the map and she earned minimum wage.

“Because it was my first job I didn’t expect anything, so I thought everything was fine,” she said.

But more than four years later, she was still working sporadic hours at Sirens — sometimes just one shift a week, even when she asked for full-time hours during her summer break from university. She was still working to the point of “stress” with little incentive beyond a vague promise of more hours, and still making minimum wage — even as people who had been hired after her got raises for no reason she could see except favouritism, she said.

“I was really upset. I felt like they cheated me, because I had been working for so long and so hard and I wasn’t getting anything,” said Aldaz, a poised 20-year-old. “So then I called the (Ontario Labour) Board and asked about unions.”

This July, Aldaz and her co-workers at Bramalea City Centre became the first Sirens workers in Canada to unionize.

In the past 20 years, the growing influence of discount retailers has changed the complexion of the industry. Clothing companies that want to compete with bargain prices end up keeping costs down any way they can: from stocking cheaply produced goods made in developing countries like Bangladesh and Cambodia, to cutting labour costs on the sales floor.

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Retail work is now largely seen as a temporary job for low-skilled employees working for low pay, unpredictable hours and few benefits. But with nearly two million Canadians now working in retail sales — making it the largest employment sector in Canada — more people like Aldaz are questioning those assumptions.

“We don’t seem to perceive ourselves very much as a nation of retail workers,” said Kendra Coulter, a labour studies professor at Brock University. “As the sector starts to play such an increasingly significant role in our economy, there is a real need for us to take it seriously.”

And if we don’t, the consequences for the broader economy could be vast as low-paid workers with less purchasing power spend less in their communities.

“We could be looking at a very different Canada in 20 to 30 years,” Coulter warned.

Cost to workers

Canadian retailers sold about $26-billion worth of clothing and accessories in 2012, according to the Retail Council of Canada. Half of retail workers bring home less than $11.15 an hour and minimum wage is common, Coulter said. That has been $10.25 in Ontario for the past three years.

Workers who sell apparel are often at the low end of the pay scale because the retail sector includes car dealerships and high-end electronics stores with big-ticket items where salespeople earn commission, giving them the opportunity to earn more.

Meanwhile, a growing proportion of retail work is being done by part-time employees. Statistics Canada figures show the number of full-time retail employees has declined by more than 3.3 per cent since 2008, while the number of part-timers has grown by nearly as much. According to the Canadian Labour Congress, 48 per cent of front-line retail employees work part-time, compared with 19 per cent in the overall economy.

“That’s troubling,” Coulter said. At those wages — which she calls “poverty wages,” meaning too low to comfortably pay for the necessities — even full-time workers are at risk of falling below the low-income cut-off. “If the hourly wage is quite low and you’re only able to secure 15 or 20 hours or less . . . ,” she added, trailing off.

At least 1 in 4 part-time retail workers are classified as “involuntary part-time,” meaning they would like to be working full-time, she said.

When retail companies look to cut costs, they often look to the payroll on the shop floor.

“The store premises have a lease or purchase price long ago negotiated and agreed to,” journalist Caitlin Kelly wrote in her 2011 book, Malled: My Unintentional Career in Retail. “The merchandise was long ago chosen, ordered, shipped, distributed, marketed and advertised. Every possible cost has already been assumed.

“There’s only one place left to save: paying your front-line employees the least the local market will bear.”

Payroll is consistently cited by Retail Council of Canada members as one of their top three expenses, CEO Diane Brisebois said. Final profit margins for apparel retailers are usually around 5 per cent, she said.

But there’s more to it than pay. One of the most common complaints from retail workers is that they don’t have regular schedules, meaning they might get 20 hours one week and five hours the next. That makes it difficult for workers to budget — and to schedule medical appointments, child care or shifts at a second, supplementary job.

Thirty per cent of GTA retail workers said they work full-time for one employer on a permanent basis, with benefits, and expect to stay with that employer for one year, according to a 2011 book, Working Without Commitments. That was the lowest rating for any employment sector; a study this year by McMaster University and United Way Toronto put the overall average for the GTA and Hamilton at 50 per cent.

Meanwhile, a report this month from the Institute for Competitiveness & Prosperity and the Martin Prosperity Institute said the level of precarious employment in the GTA’s service sector, which includes retail, surged 33 per cent from 2001 to 2009. That report defined precarious employment as temporary, part-time work that pays less than $24,000 a year.

McMaster labour studies professor Wayne Lewchuk, a co-author of Working Without Commitments, says high employment uncertainty and the added effort of looking for more work can wear down the health of workers and their families.

“Being in this situation is associated with a doubling of reporting poor general health and poor mental health, and a more than doubling of sleep problems and headaches related to employment compared to individuals in secure and stable employment,” he said in an email.

The Retail Council’s Brisebois acknowledges the criticisms around scheduling but says that is the nature of a seasonal industry, where business can be slow for months at a time. “It’s not like a manufacturer where you know for the next six months all your lines are going to be at full production,” she said.

H&M relies on part-time workers — who make up more than 70 per cent of its retail sales staff — to meet business demands, spokeswoman Emily Scarlett said in an email.

“We need to be able to mobilize the right number of employees quickly to ensure the best customer offer,” she said. “We have found that this is best done through a flexible part-time workforce,” especially with workers who can come in during peak business times like weekends and holidays, she added.

Retailers now use software that monitors sales, foot traffic and even weather records to help determine how many employees they need on a shift. When times are challenging — as they are now — it affects their staffing levels, Brisebois said.

“It’s really a reflection of how difficult it has been for the last couple of years to predict consumer behaviour,” she said, citing factors like the recession and the growth of online shopping by as much as 300 per cent per year. “With less predictability, it’s a lot more challenging to try to figure out staffing in your store.”

Changing workforce

When stores use scheduling as a way to cut costs, it shifts the burden to workers, Lewchuk said.

“You have to basically commit to these firms more or less on a full-time basis, but they don’t commit to you on a full-time hours basis,” he said in a phone interview. “You’re available for 24 hours for four days, but you’re only going to get eight hours’ worth of work.

“How can you run a family on that basis?”

That question is becoming more important in Canada. Retail jobs traditionally have been thought of as part-time, casual work for students and teenagers. But increasingly, that’s not the case: about 40 per cent of retail workers in Canada are 45 or older, Coulter says.

“With the retraction in manufacturing jobs, and white-collar work being reduced in both the public and private sector, who exactly is in retail and for how long is really shifting,” she said. “We’re already seeing a lot of people turning to retail mid-life, and post-secondary-education graduates from college or university staying in retail through their 20s.”

Dianne Kay-Lombard took her first retail job three years ago, after being home with her kids for more than 10 years. She had been looking for occasional work to supplement her family’s income and ease back into the workforce, and found it at the Mexx store in Oakville Place.

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Kay-Lombard, 51, now works up to three shifts a week there, selling mid-range casual and office apparel. She says she enjoys her job and has supportive managers and co-workers, but a few things about working in retail surprised her.

For instance, there was little training on either the product lines or on customer service — something Kay-Lombard says is “ingrained” in her after her earlier career selling mutual funds.

She was also surprised at the minimum-wage pay that’s standard for entry-level retail workers.

“You are dealing with the public on usually a four- to seven-hour shift,” she said. “I was curious why it wasn’t paid a little more.”

There are also costs to the companies when retail workers feel underpaid and undervalued. Turnover is notoriously high for part-time retail workers — up to 100 per cent annually by some estimates — and the costs of recruiting and training new staff pile up, says Lisa Hutcheson, a senior adviser with the J.C. Williams Group retail consulting firm. Retailers lose productivity when store managers and senior staff have to interview and train new hires, she said.

MIT management professor Zeynep Ton has studied retailers for more than 10 years. Many store managers told her “the pressure to meet short-term performance targets led them to reduce employees even though they knew that the workers who remained would cut corners and make mistakes,” she wrote in a 2012 report in the Harvard Business Review.

In fact, every $1 increase in payroll can lead to a $4 to $28 increase in monthly sales, she wrote. But it’s not just low paycheques that send turnover up and productivity down.

“Not surprisingly, I found that unpredictable schedules, short shifts and dead-end jobs take a toll on employees’ morale,” wrote Ton. “When morale is low, absenteeism, tardiness and turnover rise.”

Engagement pays off

Aldaz’s co-worker at Sirens, Summer Ruddock-Ellis, said she’s not motivated to do her job well when she’s feeling disrespected and overworked by managers.

“If they made the employees happier, we would help customers, customers would buy more, everybody would be happier,” said the 20-year-old economics student.

Hutcheson encourages companies to invest in employee engagement — for example, with regular online surveys or store visits to get staff feedback, and benefits that appeal to employees, whether that’s product discounts or retirement savings plans.

Engagement is a big reason that Mountain Equipment Co-operative, which sells outdoor equipment and apparel, pays its retail employees above the average market wage for entry-level workers — in Toronto, they earn $12.50 — and offers them health benefits, parental leave top-ups and RRSP matching.

“We want to be able to attract employees, and from an engagement point of view, you want people to think about us as a destination employer,” said Cathy Smith, who heads human resources at MEC. “If they like coming to work . . . they’re just going to do a better job.”

MEC uses a third-party survey every other year to track employee engagement. In 2011, it scored 64 per cent, compared with an average of 59 per cent for specialty retailers.

“We see a lot of our employees staying somewhere in the range of two to three years, especially on the floor,” Smith said.

There is a perception that discount retailers can’t afford to pay their employees as well as high-end or specialty stores, but Ton’s research found that some chains can keep prices down while investing in their workforce, partially by adjusting their operational practices. Among them is Costco, the warehouse-style store that sells clothing among its low-cost offerings to paying members.

Costco’s Canadian workers across all departments make an average hourly wage of $21, according to spokesman Ron Damiani. Workers also get fully employer-paid benefits, including health, disability and life insurance. Its worldwide turnover rate for all staff is just 6 per cent, he said.

The Retail Council says many employers also try to help staff to grow within the company — something Costco is known for.

“Our goal is not for part-timers to be a transitional workforce, rather we would hope that they would stay with us throughout their schooling, or when they are first entering the workforce with the goal of eventually becoming full-time or management,” said H&M’s Scarlett in an email. The company also offers benefits to its part-time workers.

Back at the Sirens in Brampton, a split-level store with hot-pink walls, the store’s two dozen part-time sales workers are gearing up for bargaining with the company, said Kevin Shimmin, national representative for United Food and Commercial Workers Canada. Based on his experience with other retail unions, he expects issues like wages, seniority and scheduling to be on the table.

Spokeswoman Jasna Brtan of YM Inc., the company that owns Sirens and other apparel stores, declined to comment on the unionization. “We value and respect our employees — and we respect their decisions,” she said in an email.

Instead of sticking with a job that made them unhappy, and going through the effort of launching a union, why didn’t Aldaz and Ruddock-Ellis just quit selling $5 hot pants and work somewhere else?

“Right now it’s hard to find another job,” Aldaz said. But the more important factor was that “other people quit before and nothing changed.”

“We collectively decided that there needed to be a change at the company, and we could do something about it,” she said.

“It was a really good journey and an awesome outcome.”