At the Toys R Us “Holiday Express” store in New York City’s bustling shopping mecca Herald Square, one of 600 pop-up stores in the country, shoppers mull around the toys stacked on temporary wire racks, and two employees stand behind the counter fielding questions and ringing up customers. Many of these Holiday Express employees were once counted among the millions of unemployed or underemployed, and are now putting in long hours, racking up overtime, and taking home heftier paychecks for the holiday shopping season. Toys R Us is expected to add 45,000 seasonal employees to their payrolls for the holidays, a 29 percent increase from last year.
Economists and retailers anticipate a stronger holiday shopping season than last year — another sign that the economy is seeing the light at the end of the tunnel — and with higher consumer spending, comes more holiday hiring.
Economists are forecasting 550,000 to 650,000 holiday jobs this season, a 30 percent increase from 2009, though still below the 720,800 added in 2007. Last year, 501,400 seasonal workers were hired in October, November and December — a 54 percent increase from 2008 when holiday hiring was at a 22-year low. “This year we expect to see further gains in seasonal hiring, but it probably will not achieve the levels we saw in 2006 and 2007,” John A. Challenger at Challenger Grey & Christmas said in a statement. “There is still a lot of doubt about the sustainability of this economy.”
The unemployment rate remains at 9.6 percent, though the economy had a net gain in jobs for the first time in five months in October, adding 151,000 jobs, 27,900 in retail alone. Restaurant and bars hired 24,400 people. October retail hiring numbers were nearly as strong as those in October 2006, a sign of recovery, but Sophia Koropeckyi at Moody’s Analytics, says there are certain provisions to this.
The busiest month for retail hiring is in November, and the November numbers will be a more accurate representation of the strength of the season. “Someone could draw inaccurate conclusions from looking at that October number because there’s been a bit of front-loading on the part of retailers to try and move things with sales early on,” she says. “That doesn’t mean November is going to be as strong.”
Even with the ballooning retail payrolls, a strong holiday hiring season is more a sign of a strengthening economy than a strengthening job market, Koropeckyi says. Although historically, the unemployment rate drops during the busy holiday hiring season, it’s usually not enough to influence the seasonally-adjusted unemployment rate, which is currently at 9.6 percent. Other industries, like construction, slow down during the winter and could offset the impacts of holiday hiring.
Consumer spending has been showing signs of strength, even before the start of the holiday shopping frenzy. Retail sales increased 0.3 percent in July and 0.4 percent in August. In anticipation of more shoppers, many stores are expanding their holiday hours and prepping for big shopping days like Black Friday.
Wal-Mart will be open all night starting at 12 a.m. after Thanksgiving — an attempt to disperse crowds after one of their temporary employees was trampled to death in 2008. Sixty-three percent of retailers expect an increase in holiday sales over 2009, according to a Hay Group survey, and a Gallup poll projects a 12 percent spending increase on Christmas gifts this year.
The major retailers increasing their holiday workers this season are Macy’s, which will hire 65,000 seasonal workers, a slight increase over last; Toys R Us will add 45,000, up 10,000 from last year; Brookstone will hire 36 percent more than last year; and Kohl’s plans to hire 40,000, a 21 percent increase. Wal-Mart and Best Buy expect to hire the same as last year.
Even with the increased payrolls, competition for holiday jobs is stiff. There are still 14.8 million unemployed Americans, and 6.2 million have been unemployed for 27 weeks or more. Holiday workers who would rather be working full time, are considered involuntary part-time workers, and there were 9.2 million of them in October. “Retailers do not want to be caught with too many workers at a time when many of the fundamentals needed for strong consumer spending remain a little shaky,” said Challenger.
According to the Hay Group survey, 43 percent of retailers expect to see more applicants this season than last year. Karen Lee at the Smart Business Resource Center, a job center in Redding, Calif., where the unemployment rate is at 15.2 percent, says that employers have stopped coming to her for their hiring needs this year. “The employers that we’ve spoken to have told us that they’re getting lots of applications on their own,” she says.
UPS, which anticipates hiring 50,000 temporary workers for the season, says they receive about one million hits per week on their job application site, a big jump from their regular traffic during the year. “This goes to show the times that we’re in and that people are looking for temporary work,” says UPS spokesperson Tyre Sperling.
Lawrence Barnes, a supervisor at Michigan Work Place North, a job center in Detroit where the unemployment rate is 15.6 percent, one of the highest in the country, says he’s hearing about increased holiday jobs, but not seeing them. The center still sees 2,000 to 3,000 job seekers a week. “They say all this, and all that, but I don’t see it. Job seekers have been pouring in here every day. We’re busy 24/7. I’m wondering, who’s getting hired?”
Twenty three-year-old Jessica from Philadelphia, PA, who asked to have her last name withheld, graduated in June from Temple University with a degree in English and has been looking all summer for office or retail work to no avail. As a last resort, she applied to Urban Outfitters at the end of October with the hopes of at least a temporary job. After a quick interview and two follow-up calls, they asked her to come in for a second interview. Again, she followed up twice, and was finally hired last week. She hopes to work 40 hours a week, but she’ll start at 20. “There’s so much rejection, you have to follow up. It’s ridiculous. It was a really long process for something so simple.”
