Retail market tightens
By Jan Teague, President/CEO
I read with interest the new challenge of finding warehouse workers. The Wall Street Journal reported this week that with the growth of online sales, more warehouses are being built. This means more warehouse workers are needed.
The challenge is finding people at the pace they are needed. It turns out that right now an online warehouse uses two to three times as many workers as a traditional warehouse. The online warehouses need to fill the orders faster to meet customer expectations for turn-around times. Amazon was mentioned saying it plans on creating an additional 25,000 jobs over the next year to work in its warehouses.
With scarcity and rising labor costs, retailers are motivated to pick up the pace of automation. In the meantime, companies are trying to keep their employees by offering more perks such as more flexible work shifts. When I read that, I wondered how it would work in Seattle, where flexible work shifts are discouraged. Some warehouse operators are compressing work shifts so an employee can work 36 hours in 3 days. They hope to lure college students, parents who want to work fewer days, or retirees.
The article goes on to say that demand for workers is greatest in growth areas where retailers are trying to fill more customer orders. Warehouses would be located in close proximity meaning more workers would be needed.
As I thought about this for Seattle, I wondered if its future might be that fewer stores would be needed. Will the brick-and-mortar stores not be able to compete with the changing nature of online competition and its drive to get customers their orders faster and faster?
I recently reported on automation taking more jobs out of the retail equation given higher labor costs. I can envision a warehouse-centered retail industry in the future and I’m growing concerned for our brick- and- mortar stores. What will they do to continue to compete in such a rapidly changing retail climate?
I am reminded that retailers are a tenacious bunch and very adaptable. It will be fascinating to watch them evolve. It may be that retailers become more entertainment focused to give unique experiences to their customers. This has been the industry’s edge in the past and a reshaping of that customer experience may be its best opportunity.
Organized retail theft bills pass House
By Mark Johnson, Senior VP Government Affairs
The House of Representatives this week unanimously passed Senate Bill 5635 that deals with organized retail theft. WRA authored and supported this bill. The bill also contains Senate Bill 5634 that deals with similar ORT laws. Retailers extend special thanks to Senator Mike Padden for prime sponsoring both bills.
SB 5635 would allow for aggregation of thefts that were committed under special circumstances. Special circumstances include use of a device or tool to thwart or bypass security measures such as alarms, detectors, spider wrap, and theft tags, to name a few. The bill also clarifies that a theft tool does not have to be specifically designed to commit the crime.
For example, a pair of wire cutters would be considered a theft tool if this bill passes. This will help retail loss prevention officers, police and prosecutors crack down on organized retail rings. The State Supreme Court ruled that a thief could not be charged with a more serious offense unless the tool used was “specifically” designed to commit the crime. This bill addresses that ruling.
SB 5635 now must return to the Senate for concurrence and then go to the Governor for his review and hopeful approval. WRA’s lobbying team will continue to push this important bill. The National Retail Federation estimates that nationally, $45.2 billion was lost to theft in 2015, which equates to $900 million in Washington State.
Consumers pay for these crimes with higher prices.
Talk of various leave policies is getting confusing
State sets April 28 as deadline for comments on draft rules
By Tammie Hetrick, Senior VP of Retail Services
I have been taking more calls recently from members confused by all the talk of government leave policies.
Last fall, voters approved Initiative 1433 to institute paid sick and safe leave on a statewide basis. Sick and safe leave is set to begin in January 2018. This legislative session, lawmakers are debating whether to approve paid family leave. Also, Seattle is mulling over a paid family leave policy.
Some members are asking, which is which and how much do I have to worry about paying for these benefits?
State sets April 28 as deadline for comments on sick leave rules
First off, state officials currently are accepting input so now is a good time to review the rules for paid statewide sick and safe leave. Here’s a link to more contact information including ways to make suggestions and seek answers. An update on rulemaking is here.
We expect to soon host a webinar to sort through all the paid leave ideas on the table. Look for follow-up information in this newsletter and @waretail on Twitter and our Facebook page when it becomes available. The topic has become the most significant labor policy I’ve seen in years. I am the designated expert in the negotiations and have a team working with the entire business community on their concerns.
I’m in the midst of negotiating with the unions and key state legislators on a paid family leave policy. A bill could pass in the Legislature this session. We will report details of any policy agreements in this newsletter and on our website, www.retailassociation.org.
Meanwhile, John Engber is heading up the Retail Industry Coalition of Seattle, with field director Nina Jurczynski. They’re monitoring informal discussions among City Council members to implement a Seattle-only family leave policy and seeking reaction from Seattle retailers. Contact Engber at firstname.lastname@example.org or visit the coalition website.
John and Nina also plan outreach efforts to the Seattle retail community.
Budget dominates final scheduled week of legislative session
As the Legislature nears its final scheduled week of the 2017 session, the main task remains agreeing on a budget to send to the Governor. Despite talk of the need for a special session, the Senate and House budget versions aren’t too different on proposed school spending.
The deep differences lie in the details of how to raise the funds, as Rep. Mary Dye pointed out in a recent newsletter to her District 9 constituents.
While the Senate proposes no tax increase, the House has proposed the largest increases in taxes in state history. WRA opposes the House budget on several fronts including its proposed capital gains tax, tax on bottled water and discouraging the use the state’s immediate sales tax break for qualified out-of-state shoppers by requiring consumers to apply for an eventual tax refund from the state. Such a move would dry up a significant portion of sales and threaten the state economy.
Adjournment is scheduled April 23.
Final action on key bills
The state Senate and House today are taking final action on pending retail-related bills before sending bills to the opposite house for concurrence. Mutual agreement between the houses is required before bills can be sent to the Governor for further consideration including signing into law or vetoing.
Many bills have been whittled from the agenda in recent days. Here’s a look at a few key bills WRA is monitoring heading toward adjournment:
- HB 1755 would require parties in workers’ compensation settlement talks to report on their progress to affected companies involving employees injured in accidents with third parties. Both houses have passed the bill and sent it to Gov. Inslee for further action. Too often, companies have not learned of financial impacts of settlements until late, after talks have been completed.
- Both houses have passed SB 5835 to provide workplace accommodations specific to the needs of pregnant employees. The Governor now must take further action.
- Two smoking-related bills related to the state budget were awaiting further action. HB 1054 would raise the legal smoking age from 18 to 21 but hurt sales and cost the state an estimated $16 million in tax income. HB 2165 would place a 60 percent tax on vaping products and raise an estimated $40 million in revenue.
- Two budget-related bills to re-fund state tourism promotion were awaiting votes. They are SB 5251 and HB 1123. The state dropped tourism promotion spending during the last recession.
- Both houses have passed HB 1351 to streamline the process for obtaining liquor licenses. It, too, goes to the Governor for further consideration.
Following adjournment, WRA will produce a complete review of bills it monitored this session and voting records related to high priority bills.
Policy brief compares pending state budget proposals
Gov. Inslee, the state Senate and House have proposed separate state budgets to mainly address a state Supreme Court mandate to fully fund state schools by this year.
The Washington Research Council has combed all the numbers and produced a handy policy brief outlining the different spending approaches in each proposal. Most of the Legislature’s remaining work this session will surround arriving at a compromise budget from among the three proposals.
Click here to review the policy brief.
Policy Center video rejects an income tax
The Washington Policy Center has produced a short video citing multiple reasons why an income tax would be a bad idea for the state. Voters rejected an income tax seven years ago.
WRA opposes a capital gains tax proposed by House Democrats and Governor Inslee. It would tax income gained on the sale of property or investments.
The video quotes people saying why it is important to retain Washington’s status as one of nine states without an income tax. The reasons include:
- The state’s competitive advantage from not taxing income.
- How not taxing income lures investment capital.
- Being income tax-free helps new companies grow.
- It helps retailers by increasing spendable income.
- Without an income tax, state tax revenues have grown $10 billion the past six years.
Watch the video here.
Trend of hiking minimum wages could be turning, Wall Street Journal reports
In recent years, Seattle, Tacoma and the City of SeaTac have approved spikes in the minimum wage to $15 an hour, or roughly twice the $7.25 federal minimum hourly pay.
But now, the Wall Street Journal reports a reversal may be starting in the trend to artificially raise the minimum wage.
A Journal video reports on how communities in Maryland, Illinois and Baltimore have changed their minds about spiking the minimum wage due to concerns that economies could be damaged through lost jobs. Watch the video here.
Monthly state revenues slip slightly
Retail tax payments continue to be strong
Tax collections to the state general fund for the month ending Tuesday finished 0.6 percent lower than a March forecast. Still, tax payments for the period finished 2.1 percent ahead of the same time last year.
Payments from the retail sector were up slightly, 0.6 percent, compared to the same time last year.
Among the leading sectors that produced more revenues were online stores, (up 8.1 percent); food and beverage stores, (up 6.8 percent); and gas stations and convenience stores, (up 5.7 percent).
State economist Steve Lerch noted that last year’s extra leap day was a significant factor in reducing this year’s tax payment results. Six retail trade sectors showed year-over-year declines in tax payments likely due to the extra business day last year, Lerch said.
Click here to read the state’s latest revenue update.
Source: Economic Revenue Forecast Council
Lawmakers debate relief from approved transit initiative
State legislators so far this year disagree on the best way to pay for public schools.
They’re also struggling to find tax relief for motorists hit with skyrocketing car tab fees to pay for expanded light rail service.
Lens, the online news source of the Business Institute of Washington, just reviewed a flurry of bills under consideration for tax relief from ST3, the transit initiative voters approved last fall. Click here to read that story.
Both Lens and The Seattle Times seem to agree that despite a flurry of tax-relief bills tied to Sound Transit this session, lawmakers so far have struggled to agree on a solution.
Safety tip of the week
Balance work and family needs before a natural disaster
Business owners need to brace for natural disasters to be able to recover quickly and remain in business.
But preparing for an earthquake or flood also requires preparations at home. Your business may not run well if a disaster has torn up your family life, or vice versa.
Personal preparedness goes hand in hand with business continuity plans for business owners.
RASI SAFETY TV has some great videos on how to prepare. Our Retro members can access even more information in the Safety Library in the Emergency Preparedness section. Please take some time to review your current personal plan and update it as needed.
A personal preparedness plan resembles a business recovery plan:
- Mitigate: What can you do to make your personal environment safer?
- Communicate: How will you communicate with loved ones? Do you have an outside-the-area contact set up?
- Prepare: What are the supplies you need and where will you store them?
- Don’t forget to arrange for those with special needs in your family; seniors, infants/children and pets.
WRA employs Rick Means as a Safety Specialist who is available to members to help draw up safety plans and suggest topics for safety meetings. Contact him at 360-943.9198 x18, or email@example.com.
Research Council’s annual dinner on May 23
The Washington Research Council will hold its annual dinner on May 23 at Bellevue’s Meydenbauer Center.
Ian Toner, chief investment officer for Seattle-based Verus Investments, will be guest speaker. He will speak on “Political Turbulence: The Impact of Shifting Paradigms at Home and Abroad.”
To register and RSVP, contact DeDe McConnell at firstname.lastname@example.org or at 206-467-7088.
Twitter can be a useful tool in helping WRA’s followers and others to keep up with developments regarding bills under consideration in the 2017 session.
Many followers of the Legislature don’t have the time to attend hearings or have to wait until the next day for the newspaper to arrive. But by following WRA @waretail on Twitter, we alert you ahead of time to key testimony offered by our lobbyists and then follow with live tweets during key hearings and selected voting. We also link you to the full text of bills.
Please follow us on Twitter for retail-related developments throughout the year.
Save money with WRA’s discount shipping partner
FedEx and UPS have higher shipping rates this year.
WRA extends an offer to save money on shipping small packages by singing up with Partnership, WRA’s discount shipping partner.
To enroll and receive exclusive discounts on select FedEx® services, visit PartnerShip.com/99WRA. For more information, email sales@PartnerShip.com or call 800-599-2902.
Learn more about how the 2017 rate increases will affect your shipping costs by downloading a free research paper at PartnerShip.com/RateIncrease.
WRA diversity statement
It’s essential to have a holistic strategic plan for diversity and inclusion. We encourage everyone to consider having a plan that connects with diverse people, creates a diverse workforce, fosters an inclusive work environment where different perspectives are valued, partners to share time, talent, and resources with our staff and with communities, and communicates these values with others.
In principle and in practice, we value access to leadership opportunity regardless of race, ethnicity, gender, religion, age, sexual orientation, nationality, disability, appearance, geographic location, or professional level. The association strives to accomplish this by serving as a model where we are working to help our staff, our volunteer leaders, our members, and our community embrace these principles.