Temporary Holiday Workers May Make Little More Than Minimum Wage

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Part-time holiday workers, who major retailers are hiring by the hundreds of thousands, often do not make much more than the minimum wage. This means their effect on the national economy is quite small.

Among the companies that have announced they will hire the most workers are Macy’s at 80,000, UPS at 100,000 and Target at 120,000. Target said it will pay its holiday temps $10 an hour. That is below the minimum wage in many states, and just above it in others.

Among the illusions about holiday workers is that they add to economic activity during the critical year-end holiday season. At $10 an hour that is unlikely. And most of these workers know they will be out of work by the end of the year.

While the National Retail Federation and other firms that track holiday sales have not put out their holiday sales forecasts yet, the increase over last year probably will be 3% to 4%, as is the case during most years when the economy is good. E-commerce sales projects almost certainly will be an improvement over 10%. Large online retailers may do even better. Amazon.com revenue rises by between a quarter and a third during the fourth quarter in most years.

Temporary holiday workers will not be buying merchandise for the holidays. Their income will go to more mundane things like the cost of the trips to their jobs or to college tuition. That is what $10 or less an hour buys.