Salaries, wages up, retailer survey finds

Most retail salaries and wages have increased at least 3 percent across Michigan since 2004. In addition, more retailers are offering retirement benefits to employees, but fewer are offering health care benefits.

Those are among the findings of the latest Michigan Retailers Association Survey of Retail Salaries, Wages and Benefits. Anderson Economic Group of Lansing and Mitchell Research of East Lansing conducted the survey in September for MRA.

The survey is MRA’s fourth—previous surveys were conducted in 2000, 2002 and 2004. MRA plans to sponsor the survey every two years to track trends in Michigan’s retail industry.

Managers, full-time clerks, buyers and clerical positions saw annual wages increase by at least 3 percent over the period. The only positions that saw average wages drop were assistant manager (down 3 percent) and delivery (down 1 percent).

“The statistics and analysis this survey report provides are particularly valuable to Michigan retailers, because the numbers reflect the choices of retailers like themselves, facing the same economic climate and challenges—something national surveys or data may not do,” said James P. Hallan, MRA president and chief operating officer.

“The decline in health care benefits is consistent with changes in many industries, however, as employers continue to struggle with the rising costs of health insurance,” Hallan added. “The increase in retirement benefit offerings suggests that retailers want to improve their benefits package in a more affordable manner.”

Both the decreases in health care coverage and the increases in retirement benefits continue trends that were first noted in 2002, according to survey analyst Patrick Anderson, of Anderson Economic Group.

A new question in this year’s survey addressed the recent increase in the minimum wage to $6.95 from $5.15 on October 1. More than half of the respondents reported that the legislation would not have an immediate impact on their starting hourly wage.

Fifteen percent of respondents expected the legislation to impact their average starting hourly wage by a dollar or more; 23 percent felt the impact would be less than a dollar but not zero. Large retailers (those with annual sales of over $2 million) were the least likely to expect the legislation to increase their average starting hourly wage.

“It is still early to be looking for the impact of the new minimum wage law,” said Hallan. “These 2006 figures will provide a baseline for comparison, while the 2008 survey is likely to show more fully the impact of the minimum wage increase.”

The minimum wage is scheduled to rise to $7.15 on July 1, 2007, and $7.40 on July 1, 2008.

The surveys—designed to help owners consider their employee compensation and benefits in light of what similar stores offer—have been refined each time, according to Bruce Johnson, of Gazelle Sports in Kalamazoo. Johnson has chaired the committee of MRA board members who have worked with Anderson officials since the project began.

The survey asked about salaries, wages, bonuses and commissions; medical, dental, insurance and retirement benefits; vacation days, sick days and merchandise discounts for a wide range of retail employees.

The report breaks down data by region, retailer size (based on gross annual sales) and employment category, including store manager, assistant manager, full-time clerk, part-time clerk, clerical staff, buyer and delivery staff.

Regional differences
Retailers in the metro Detroit area offered the highest average salaries in all positions, including the highest average starting hourly wages to full-time retail clerks, $9.17 per hour, followed by retailers in Southwest Michigan at $8.92 per hour. This compares to a statewide average starting hourly wage of $8.34 for fulltime employees and $7.41 for part-time staff.

In most instances retailers in Northern Michigan and in the Saginaw Bay area reported paying lower wages than retailers in other parts of the state. The Saginaw Bay area offered the lowest average starting hourly wages for both full- and part-time employees, at $7.33 and $6.55, respectively.

Retailers in the Capital/Ann Arbor area were most likely to provide health care benefits to assistant managers, clerical staff and buyers, while retailers in Southwest Michigan were the most likely to offer health care benefits to full-time clerks, and the most likely to pay 100 percent of the costs.

Other statewide findings
• Across the state, starting wages for both full-time clerks and part-time clerks have increased since 2004. Wages for full-time clerks increased by 6 percent and starting wages for part-time clerks increased by 1.8 percent.

• Full-time clerk was the only position for which retailer size, in terms of annual sales, did not correlate with wages. Full-time clerks made less ($18,687 annually) at large retailers than they did at small ($19,420 annually) or medium ($20,552 annually) retailers.

• Retailers who offered retirement plans were more likely to provide a 401(k) than a Simplified Employer Pension Plan (SEP) or similar. Additionally, retailers who provided a retirement benefit chose to contribute to or match employee contributions to retirement funds more often than not.

Demographics
In the 2006 survey, 52 percent of retailers who responded had gross annual sales of less than $500,000, 36 percent had gross annual sales between $500,000 and $2 million, 10 percent had gross annual sales between $2 million and $10 million, and 2 percent had gross annual sales of over $10 million.

Considering retailers based on the number of employees, 73 percent of respondents employed 1-10 people, while 3 percent were owner operated.

Participation in the survey (563) was higher in 2006 than in 2004. The respondents were well distributed across the state.

MRA members who participated in the survey were mailed a free copy of the report in November.

Other members may purchase the report from MRA for $75; non-members for $125.

This article was written by Amy Buttery, Michigan Retailer staff writer.