As much as $731 billion in retail sales are projected for the 2019 holiday shopping season in the U.S., which would represent a 4.2% increase from 2018, according to the National Retail Federation.
Holiday sales have risen consistently over the past decade, more than rebounding over pre-Great Recession levels. In fact, between 2002 and 2018, holiday sales in the U.S. rose by more than two-thirds, and if the NRF’s forecast holds, 2019 will be the most lucrative holiday shopping season ever.
All that expected spending by shoppers is likely to lead to a surge in seasonal employment as companies expand their ranks to meet demand from shoppers. Companies like UPS, Target and Amazon will hire hundreds of thousands of new but temporary employees to handle the surge of business during the shopping season that culminates with Christmas.
While we can’t see into the future for specifics about how seasonal hiring will impact states this year, we can examine federal employment data to see which states have historically realized the largest gains as a result of seasonal hiring. That’s because while retail generally is a major industry in every state, there’s a huge degree of variation in the number of jobs within that sector. Additionally, states have historically varied when it comes to their late-year hiring bumps as well as how well-paying these jobs tend to be.
For our analysis, we’ll dig into data from the U.S. Bureau of Labor Statistics, which is a division of the Department of Labor. The BLS gathers and reports a variety of data on employment and wages, and for our examination, we’ve analyzed data on the retail trade sector in each state.
Where Is Retail Biggest?
Understanding the impact of seasonal employment on retail begins with examining the overall impact of retail on each state’s economy. In most states, retail is one of the most important industries, and it accounts for millions of jobs across the country. In fact, retail trade accounts for more jobs than manufacturing, construction or transportation, though the concentration of these jobs varies widely by state.
As we mentioned, the states display a huge amount of variation when it comes to the prevalence of retail employment. On the high end of the scale, retail accounts for the largest proportion of jobs in Mississippi, where retail trade provides 167 jobs per 1,000, by far the highest. Jobs in the District of Columbia, on the other hand, are least reliant on retail, with the retail sector accounting for just 49.3 jobs per 1,000.
Excluding Mississippi and DC, outliers on both sides of the spectrum, the average state has a retail employment figure of 116.7 per 1,000 jobs. Regionally, only the South has a concentration of retail trade jobs higher than the state-by-state average.
Of course, getting a job is important, but getting a job that pays well is even better. Historically, though retail wages tend to be low, but looking at the state-by-state figures reveals that this isn’t the case across the board.
Excluding Washington, which is the home of Amazon, the world’s biggest retailer, the average weekly retail wage in the U.S. is $590; on an annual basis, that’s just over $30,000 — better than minimum wage but considerably lower than the overall average year-round full-time wage of nearly $52,000.
Mississippi occupies the two poles when it comes to retail jobs — positions are more plentiful there than in any other state, but no state has a lower average wage for these workers than Mississippi.
More Businesses & More Jobs
Now that we understand a bit more about the retail sector in each state, we can begin to explore how the holiday shopping season impacts each state’s retail industry. A majority of states will see the number of retail establishments grow over the fourth quarter (October-December) of a given year, though a few states will actually see the number of retail businesses shrink in the year’s final quarter.
In 2018, the most recent year for which all four quarters of data are available, Utah saw the largest fourth-quarter expansion of retail establishments, while Vermont saw a modest -1.2% decline, which was still enough to account for the largest contraction of retailers in the country.
The fourth quarter begins on Oct. 1, and while so-called Christmas creep is a very real phenomenon, most retailers don’t begin swelling their ranks in earnest until after Halloween, so we can get an even clearer picture of seasonal hiring when we look only at November and December. In the vast majority of states, the number of retail sector jobs is higher in November and December than during the rest of the year.
In all but one state, Alaska, the average number of jobs in retail during November and December 2018 was higher than the average for that year, with the seasonal boost appearing strongest in Arizona and Nevada. In both states, the November-December average in retail jobs was at least 5% higher than the average number of retail jobs for the year. In fact, the top four states all are the West. On the other hand, the bottom three states are also all in the West.
Holiday Season Wages
For many people, there is no seasonal impact on their wages because they are salaried workers who don’t earn overtime. But for many workers, particularly those take seasonal jobs or who pick up extra shifts to tackle an increase in business or to cover their co-workers’ vacations and days off, the fourth quarter accounts for an outsized proportion of their total annual income.
In fact, in New Hampshire and Utah, fourth-quarter wages accounted for at least 27% of annual wages in 2018. In no state does the fourth quarter account for less than 25% of yearly wages.
While no state in 2018 saw the fourth quarter of the year account for less than one-quarter of annual wages, the District of Columbia was pretty close at 25.1%, and that number actually represents a huge decline in the impact of fourth-quarter earnings in D.C. In every state, seasonal earnings have seen their weight relative to annual wages decline, ranging from the lowest drop of -1.6% in Utah to the largest decline, -8.1% in Washington, D.C.
This means that while more companies may be looking to hire workers and new, seasonal retailers are opening, the wages from these jobs are having less of an impact in workers’ wallets.
In 2015, fourth-quarter wages accounted for an average of 27.3% of annual wages, ranging from nearly 30% in New Hampshire to 26.5% in Washington. Today, 27.2% is the high-water mark, which could reflect the increasing rarity of holiday bonuses, among other factors.
The availability of seasonal retail jobs, theoretically, depends entirely on how much retailers think they’re likely to make from people shopping for gifts for their loved ones — or themselves. Fortunately for those who are eager to take one of these seasonal jobs, Americans show no signs of slowing down when it comes to holiday shopping. In fact, according to a National Retail Federation survey, the average American plans to spend nearly $1,050 on gifts this season, a record high.
About This Story
Our analysis of the impact of seasonal retail hiring was driven by a series of tables published by the Bureau of Labor Statistics. These tables cover the following data for every quarter since 2015 in the retail trade sector:
The retail trade sector consists of several subsectors:
- Motor Vehicle and Parts Dealers
- Furniture and Home Furnishings Stores
- Electronics and Appliance Stores
- Building Material and Garden Equipment and Supplies Dealers
- Food and Beverage Stores
- Health and Personal Care Stores
- Gasoline Stations
- Clothing and Clothing Accessories Stores
- Sporting Goods, Hobby, Book, and Music Stores
- General Merchandise Stores
- Miscellaneous Store Retailers
- Nonstore Retailers
We used a custom tables tool, which you can access here, limiting our analysis to retail trade establishments. All other sources of information have been linked directly in the text.
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