1 The Census of Distribution, 1950, gives the total number of persons engaged in retailing in 1950 as 2,386,443, of whom 461, 295 were part-timers.
2
The volume of goods handled (gross product) in distribution increased by 16% from 1948 to 1954, the total labour force engaged by 10%. In the same period, money wages and salaries increased by 40% per “unit sold” in distribution, as compared with an average increase of 27% per unit of output for the whole economy. Digest of Statistics, National Income Blue Book.
3
Even a major work like J. B. Jeffery's Distribution of Consumer Goods lacked an adequate account of the labour force and of wages costs in relation to gross margins, although Chapter 4 is concerned with “The Factors Influencing the Cost of Distribution”.
4
In a previous paper, in which we were largely concerned with labour costs, we used the term “labour efficiency” to denote this concept, but this appears to have led to some misunderstanding. In attempting to relate our empirical study to wages theory,” productivity” might be more appropriate. The difficulty still remains that part of the sales value is attributable to purchase tax, and that it is “revenue productivity” (i.e. net of purchase tax), which is relevant for purposes of wages theory. The Census does not enable us to apportion tax in any detail, but this is of little importance for comparisons within a trade group. As far as inter-trade group comparisons are concerned, the incidence of tax strengthens our argument as to the obstacles to a comparison of productivity between retail trades. (For this point we are indebted to Mr. K. J. W. Alexander.).
1
Working proprietors employed 492,000 full-time, and 213,000 part-time staff, compared with 998,000 and 128,000 employed in managed firms, i.e. the employment of part-time labour is nearly four times as frequent in the former as in the latter organisations.
2
This is discussed further below.
1
The wide dispersion of wages costs within trade groups should be noted. See Census, Vol. II, Table 31.
2
Cf. “Efficiency and Gross Margins in Retailing” by Lady Hall and J. Knapp in Oxford Economic Papers, Nov. 1955. The authors also show that differences in gross margins as between trades are not dissimilar in the two countries.
1
The part played by working proprietors in the food trades is probably rather larger in the U.S.A. than in Britain, which should tend to lower the wages costs in the U.S.A. relatively to Britain. Multiples (4 or more shops) did 34% of the trade in the U.S.A. in 1948 and co-operatives only 1%. In Britain, organisations with 5 or more establishments, and co-operatives accounted for 46% of total sales in the food trades, of which the co-operatives accounted for 20·6% of the total. For the “cash-and-carry” basis of American retailing, see Anglo-American Productivity Reports: Retailing, pp. 6–8.
2 Census of Distribution, Vol. II, p. 289.
3
The “tobacconists” sub-group has a considerably higher proportion, 5·3%.
4
It is curious to find that pawnbrokers form a sub-group with particularly high bonuses, at a rate of 9·4% of wages. Perhaps this reflects the need to give employees an interest in their pricing function, and to handle willingly a relationship with customers rather more complex than in other retail trades,
1
See also our forthcoming article in Oxford Economic Papers on “Gross Margins”.
2
The Census data as published unfortunately do not allow any comparison of the labour force, by sex and age, for organizations with different sizes of turnover, either within trade groups or for retail trade as a whole.
1
In the “chemist's goods” group, it falls sharply.
2
In all trades, sales per person employed rise rapidly until size group 7 (£50,000 to £100,000 turnover p.a.). Above this turnover, sales per person employed continue to rise in six main trade groups (clothing, hardware, furniture, booksellers and stationers, jewellery, etc., and coal, etc.), are approximately constant in the case of “other food” and fall in “grocery“, “chemist's goods” and “confectioners, tobacconists, newsagents”.
3
Rising wage costs per unit are also found in retail co-operative societies, grouped by increasing size of turnover. This may partly be a reflection of conditions common to the grocery trades, but is also in part the result of greater diversification in the trade of the larger societies, which extend their trade into non-food branches with higher wage costs per unit.
1
This is also strongly in evidence in the car, cycle and garage groups of the “service trades”.
2
It need hardly be stressed that wages costs form only one element in total costs influencing employers' decisions.
3
In a previous paper on “Retailing Costs”, (Oxford Economic Papers, Feb. 1955, p. 73) we were inclined to underestimate the importance of this modification of the sales per head figures, as we were dealing with shops, not firms, and for the former some essential details are lacking in the Census. The modification introduced now would not alter the direction of the tendencies described in the earlier paper, but would reduce their force.
4
These are detailed in the Census of Distribution, Vol. II, p. 313.
1
Let S= sales in size group
O= size group
e= proportion of employees in size group
E= total number of employees in trade group, in both owned and managed shops
wp= proportion of working proprietors in size group WP= total number of working proprietors in trade group SM= total sales in managed shops
1. Then sales per head attributable to working proprietors are calculated as: G1… G11S£ (1— e)/=A
2. Sales per head attributable to employees are calculated as: G1… G 11 S£ (1 —wp) + SM /= B“A is then expressed as a percentage of B in Table VIIIA, Col. C.
1
A further refinement would be to adjust the figures for each region according to the various proportions of regional sales recorded for each trade group. As these variations were only of a minor nature, the change made in the results would be small compared with the large margin of error introduced by our assumption dealt with above.
2
This point is examined in detail in Section IV.
1
On the lower “efficiency” of retailing in the resort areas, see our article in Oxford Economic Papers, Feb. 1955, p, 82–83, in which the analysis is based upon the Area Tables of Vol. 1 of the Census of Distribution.
1
Constant wage cost per unit of sales, it may be recalled, represents a close correspondence between wage level and “productivity”.
2
It has been pointed out in Section I that the Census data on bonuses include only those paid at longer than monthly intervals.
1
It is one of the biggest gaps in the Ministry of Labour's periodical collection of data on average earnings for different classes of workers (men, women, juveniles) in different industries, that there is no such material available for the distributive trades. Yet a reasonably accurate earnings index for the retail trades could be secured by adding the collection of such data—say, annually—to the information as to retail prices gathered monthly by 200 local offices of the Ministry of Labour. The selection of the 200 offices concerned was made “to give adequate representation to different types of localities throughout the country, with some allowance for the rather lower purchasing power in the smaller towns” (Industrial Relations Handbook, 1953 edn., p. 215). It should therefore be representative enough for the purpose of estimating periodically average earnings in retailing.
1
See Table IX, Col. III, above.
2
Wages Council minimum rates are divided into three categories, Greater London. Provincial A (towns of 10,000 and over and 190 other areas), and Provincial B, with approximately a 5% differential in wage rates between each,
1
Incidentally indicating that the 5% addition to Wages Council minimum rates in Greater London, as compared with “Provincial A”, is not a realistic measure of the differences prevailing in actual earnings—an excess of 18% in London wages (see Table XIII above).
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