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Looking for holiday season deals? Don't forget to check the labor market.

Retailers are hoping that this holiday season will be the best ever—or at least the best one in the last couple years. But to do that, they’ll have to hire a lot of temporary workers, fast. That means new hires will get a better deal, says a Northeastern economist. AP Photo/Peter Byrne

Retailers are hoping that this holiday season will be the best ever—or at least the best one in the last couple years. But to do that, they’ll have to hire a lot of temporary workers, fast.

Part of the enticement equation is higher wages: Employee wages jumped by 1.5 percent during the third quarter, the biggest increase in 20 years, according to the U.S. Bureau of Labor Statistics. As employers struggle to fill jobs, workers have the upper hand to demand better wages, hours, and work flexibility generally.

And, for teenage workers or people who have gaps in their resumes that make it more difficult to get hired, this summer’s retail surge may repeat itself, says Alicia Sasser Modestino, associate professor of public policy and urban affairs and economics at Northeastern.

woman with dark hair and white shirt

Alicia Sasser Modestino is an associate professor of public policy and urban affairs and economics and the director of research at Northeastern’s Dukakis Center for Urban and Regional Policy. Photo by Ruby Wallau/Northeastern University

“We saw a similar situation over the summer, when suddenly restaurants and retail stores were cleared to open,” she says.

Analysis from the consulting firm McKinsey & Co. indicates that retailers’ hopes aren’t pie-in-the-sky. Fourth-quarter spending is likely to rise 7% over 2020, driven by consumers across income and age ranges. The company also finds that customers are bouncing between apps, websites, and in-person shopping for inspiration, ordering, and fulfillments.

Modestino predicts that as demand for products and goods increases this season, employment trends that appeared during the summer months—another period of consumer boom—may reappear.

During the summer months in many regions, as lawmakers lifted the public health measures designed to mitigate the spread of COVID-19, retailers scrambled to hire employees to staff their newly reopened storefronts.

“Employers turned to teenagers, and in a lot of cases, lowered employment requirements because they needed to get bodies in the door,” Modestino says. “I think we’re going to see a bit of that again now.”

The summer of 2021 represented a “great teen labor market,” says Modestino, who is also director of research at the university’s Dukakis Center for Urban and Regional Policy. Those young employees will likely keep a foot in the door for Black Friday and the holiday shopping season in general, she says.

The summer jobs market was also favorable for traditionally “hard-to-employ” workers, Modestino says, including people who may have been out of the labor force for a long time, or people who have gaps in their resumes.

“These things are not a barrier anymore because employers are desperate for employees,” she says.

In general, the mismatch between so few people looking for work and so many companies looking to fill jobs has meant that employers are rebalancing their skill requirements. Jobs that once required a college degree or a certain number of years’ experience may not anymore, as employers seek to fill empty positions.

“We see that employers are more likely to put certain requirements on job ads when there’s a surplus of skilled workers,” Modestino says. “As the labor market gets tighter, those requirements come off because employers can’t fill jobs as easily.”

The shift in requirements during a labor squeeze doesn’t always mean that those requirements were bunk to begin with, though. Modestino’s research shows that employer skill requirements can be quite flexible with companies looking for the best available worker at any given moment.

Employers may have a long list of qualifications they would prefer in a job candidate, but beyond those essential for the job itself, some are not necessarily required. And when it’s crunch time, those preferences can be put aside in favor of hiring someone immediately.

For media inquiries, please contact Marirose Sartoretto at m.sartoretto@northeastern.edu or 617-373-5718.

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