HIGH END DEPARTMENT STORES, THEIR 

ACCESS TO AND USE OF DIVERSE LABOR

MARKETS: SUMMARY REPORT

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

2004
U.S. Equal Employment Opportunity Commission

HIGH END DEPARTMENT STORES

-iEXECUTIVE SUMMARY

Our nation’s retailers fulfill an important role in our economy and according to the

Commission’s EEO-1 reports, employ nearly 15 percent of all private sector employees. 

This report is one in a series that examines the retail industry. The focus here is on retail

department stores, the largest employer of all retail subsectors except for food and beverage

stores. It is also a major employer of women who make up a large portion (75 percent) of

the retail salespersons in these stores. There is a wide range of stores within the broad

category of department stores. The most exclusive high end department stores are

considered as offering superior employment situations in terms of environment,

compensation and benefits. This study seeks to determine how people of color fare in these

stores. Two key questions surround these stores. Do high end department stores focus so

much on locations in affluent neighborhoods that they limit access that nonwhite workers

might have to employment there? Second, regardless of accessibility to diverse work forces,

do high end department stores maintain a diverse work force? Department stores in the ten

largest metropolitan areas are examined: New York, Los Angeles, Chicago, Philadelphia,

Dallas, Miami, Washington, Houston, Detroit and Boston. Major findings include:

• The labor market for African American and Hispanic sales workers relevant to high

end department stores is not significantly different than the labor markets for other

types of department stores.

• The labor market for Asians sales workers is somewhat better for high end

department stores than for other types of department stores.

• On average, high end department stores are more likely to have significant shortfalls

in the employment of African Americans, Hispanics and Asians as sales workers.

• Chain ownership has a significant effect on diversity of employment. 

• There appears to be some evidence that exclusive department stores have

substantially more disparities with Hispanic sales workers than other kinds of

race/ethnic groups. 

This report is a condensed version of High End Department Stores, Their Access and Use of

Diverse Labor Markets: Technical Report. More detailed statistical findings and

methodology are presented there.
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1 Census 2000 EEO Data Tool www.census.gov/cgi-bin/broker downloaded June 25,

2004.

INTRODUCTION

Retail department stores represent a significant portion of employment in the retail industry. 

General merchandise stores, comprised largely of department stores, account for 14 percent

of all retail employment. It is the largest employer of all retail subsectors except for food

and beverage stores (18.8 percent). It is also a major employer of women who make up a

large portion (75 percent) of the retail salespersons in general merchandise stores.1 

A question regarding equal employment opportunity among different department stores is,

how does the quality of work life vary by type of store and location? That is, one might

anticipate that higher end department stores are more likely to offer commissions, higher

wages, greater benefits, greater flexibility in work hours and more valuable employee

discounts. Bernhardt (2000) is more specific about the advantages of working at high end

department stores.

Bloomingdale’s and Stern’s department stores, both owned by Federated

holding company, illustrate this split. Bloomingdale’s serves high-income

customers. Only 20 percent of its workers are part-time, turnover is low,

wages are above average for Federated stores, and a significant amount of

money is spent on recruiting polished workers with good “people skills” –

mostly young white women attending college. By contrast Stern’s is a massmarket operation. It focuses not on service but rather on centralizing and

streamlining operations with new technology and fewer people. Wages are

significantly lower, about 60 percent of the jobs are part-time, and turnover is

high. Employees tend to come from working-class backgrounds (p. 23).

Further, one might expect higher end department stores to be located in the more affluent

suburban areas. Thus, if nonwhites are isolated from these areas due to residential choice

patterns and/or housing discrimination, their opportunities for employment here will be

reduced. This is sometimes referred to as the spatial mismatch hypothesis. However, Arnott

(1998) warns that one must recognize significant changes in residential patterns over the last

decade.

. . . the spatial mismatch hypothesis seems to be predicated on the notion of a

downtown where the majority of Blacks live, surrounded by a homogeneous,

white suburban fringe. But the pattern of residential location by income and

race has become more complex in the years since the spatial mismatch
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hypothesis was originally formulated and is becoming increasingly complex.

(p. 1173).

RESEARCH QUESTIONS

The purpose of this research is to determine if high end department stores vary from that of

other department stores with respect to their ability to access and utilize diverse labor pools.

Labor market availability is defined broadly here so we use the term, accessibility rather than

availability to avoid confusion with legal standards for nondiscrimination or affirmative

action that the term availability might imply. Two research hypotheses flow from this

question, 

Hypothesis 1: Access to nonwhite workers will vary by type of department store. 

Hypothesis 2: Employment of nonwhite sales workers will vary by type of department 

 store.

Recent data from the Census and the 2002 EEO-1 report will be utilized. The analyses will

account for both employer location and work force resident data based on zip. The data

regarding employer location is specific to individual stores. The research will recognize the

role that employment discrimination may play by basing analyses on statistics comparing

nonwhite labor pools to nonwhite employment. The analyses will examine nonwhite groups

separately (African Americans, Hispanics and Asians) to account for variation in residential

patterns and employment.

METHODOLOGY

Department stores filing an EEO-1 report was assigned to one of four price point categories. 

• Designer/Bridge (the most exclusive or high end stores)

• Better/Moderate

• Moderate/Popular

• Off-Price, Discount (the least exclusive stores)
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2

 OMB Bulletin No. 03-04 2003. “Metropolitan Statistical Areas, Micropolitan

Statistical Areas, Combined Statistical Areas, New England City and Town Areas, Combined

New England City and Town Areas” Statistical and Science Policy Branch, Office of

Information and Regulatory Affairs, Office of Management and Budget.

3

 More precisely ZIP Code Tabulation Area (ZCTA) are used. ZCTA’s are

statistical areas developed by the Census Bureau for tabulating data from the 2000 Census. 

They represent U.S. Postal Service ZIP Code areas. See http://www.census.gov

/geo/ZCTA/zcta.html for a technical discussion of these areas.

4

 Sung (1996) evaluates nine alternative measures of accessibility which he defines

as “the ease with which economic activities can be reached from a location” (p. 474). Our

study uses Sung’s Gaussian formulation with accessibility values ranging from 1.0 to 0.0. 

We defined accessibility values of 1.0 at zero miles, accessibility values of 0.05 at ten miles

and accessibility values less than 0.05 at distances beyond ten miles. Probabilities were

constructed by dividing the Gaussian accessibility values for each zip code by the sum of

Gaussian distance values for all zip codes in a given metropolitan area. The Gaussian

distribution decreases slowly at closer distances and decreases rapidly at further distances

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An example of a Designer/Bridge or high end department store would be Saks Fifth Avenue. 

A Better/Moderate department store would be Macy’s. Sears Roebuck is an example of a

Moderate/Popular department store. A chain in the Off-Price, Discount category is K-Mart.

Stores are examined in the ten metropolitan areas with the largest population in the 2000

Census.2

 They are, in order of population: New York, Los Angeles, Chicago, Philadelphia,

Dallas, Miami, Washington, Houston, Detroit and Boston. Labor market analyses based on 

estimates of accessible nonwhite work forces are constructed based on zip codes or more

precisely ZIP Code Tabulation Area (ZCTA)3. Work force estimates are derived from

Census Summary File 3 and are developed for each store based on wage earners in relevant

zip codes. It is assumed that all wage earners are equally available, qualified, and interested

in seeking employment as a sales worker. While all zip codes within a store’s metropolitan

area are included, the employment figures were weighted to account to distance from the

store4

 and proportion of employment within a zip code. (See Gastwirth and Haber, 1996: 

Formula 1). Zip codes with larger work forces receive greater weight than those with

smaller work forces, and nearby zip codes greater weight than distant neighborhoods. 
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 Private employers required to file are those with: (a) 100 or more employees, or (b)

50 or more employees and: (1) have a federal contract or first-tier subcontract worth $50,000

or more, or (2) act as depositories of federal funds in any amount, or (3) act as issuing and

paying agents for U.S. Savings Bonds and Notes. Single-establishment employers submit

only one EEO-1 report, while those employers whose business was conducted at more than

one location submit a company-wide consolidated report, a headquarters report, and

individual reports for each establishment with 50 or more employees. Employment figures

could be reported for any pay period in the third quarter (July through September). In 2002,

more than 39,000 employers submitted, as appropriate, individual establishment and

headquarters reports for more than 225,000 reporting establishments with about 52 million

employees. 

6

See “Section 5, Description of Job Categories” in the EEO-1 instruction booklet at

http://www.eeoc.gov/stats/jobpat/e1instruct.html

7

 All mean difference tests use the Dunnett two-sided multiple comparison procedure

with the designer/bridge category as the control group.

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Firm specific employment information came from EEO-1 reports. These annual reports

indicate the composition of employers’ workforces by gender and by race/ethnic category.5

This study focuses exclusively on the EEO-1 sales worker data.6 Firm level EEO-1 data are

confidential.

ACCESS TO DIVERSE WORK FORCES

Table 2 reports the weighted percent of nonwhite wage earners computed by department

stores within the four major retail price point categories. Nonwhites are examined as a group

and then separately. With the exception of minor differences for Asian populations, the

current study is not able to detect significant differences in accessibility between the

designer/bridge category and the other price point categories.7 The mean percentage of

nonwhites varies from 36.6 percent to 40.1 percent. The largest mean difference occurs

between the designer/bridge category and the off-price, discount category, a difference of

just 3.6 percent. The mean proportion of nonwhites accessible to the high end

(designer/bridge) department stores were compared to each of the different types of

department stores. The differences were tested to determine if they were statistically

significant. There is some evidence that high end department stores (designer/bridge)have

greater access to Asian wage earners than moderate/popular and off-price, discount stores

(probability values of 0.005 and 0.003 respectively). It appears the four types of price
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 All of the regression equations are statistically significant, with overall

probabilities less than 0.0001, and the proportion of explained variation or R squared ranges

from 0.204 to 0.614.

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point categories have similar labor markets in terms of the proportion of nonwhites,

African Americans, and Hispanics in their labor markets.

TABLE 1: AVERAGE PERCENT OF WORKERS 

WITHIN WEIGHTED RELEVANT LABOR MARKET

LABOR

MARKET PRICEPT4

STORES

 (N)

PERCENT

 OF 

WORKERS

NONWHITE DESIGNER/BRIDGE 111 40.1

NONWHITE BETTER/MODERATE 215 39.1

NONWHITE MODERATE/POPULAR 718 37.4

NONWHITE OFF-PRICE, DISCOUNT 1347 36.6

AFRICAN AMERICAN DESIGNER/BRIDGE 111 12.8

AFRICAN AMERICAN BETTER/MODERATE 215 13.5

AFRICAN AMERICAN MODERATE/POPULAR 718 12.0

AFRICAN AMERICAN OFF-PRICE, DISCOUNT 1347 12.7

HISPANIC DESIGNER/BRIDGE 111 18.0

HISPANIC BETTER/MODERATE 215 17.0

HISPANIC MODERATE/POPULAR 718 17.8

HISPANIC OFF-PRICE, DISCOUNT 1347 16.3

ASIAN DESIGNER/BRIDGE 111 7.3

ASIAN BETTER/MODERATE 215 6.8

ASIAN MODERATE/POPULAR 718 5.8

ASIAN OFF-PRICE, DISCOUNT 1347 5.8

Regression analyses were also used to examine access to diverse work forces by accounting

for differences in metropolitan area and major chain.8

 The latter variable indicates whether

chains within a category of department store have different accessibility patterns. Type of

department store, controlled for metropolitan area, is not a significant explanatory factor
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 The shortfall ratio is defined as the difference between observed and expected

number of nonwhite sales workers at each store, divided by the total number of sales workers

at each store. The expected number of sales workers is computed by the formula,

Expected number of nonwhite sales workers =

(the proportion of nonwhites as defined by the measure of labor

market accessibility described above) x (total number of sales workers

per store)

10 For these department stores, the ratios range from a negative value of -0.664. to a

positive value of 0.665. The shortfall ratio distribution is approximately symmetric with a

skewness measure close to zero (-0.126) and similar values for the mean and median (0.113

and 0.107 respectively).

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except for Asian accessibility. That is, type of department store has no influence on the

store’s access to nonwhite, African American and Hispanic workers. Chains in the more

exclusive group of department stores (designer/bridge and better/moderate) appear to have

no significant influence on access to nonwhite workers measured collectively or by

individual group. However, chains in the lower two price point categories, moderate/popular

and off-price, discount, show significant influence. Taken as a whole, the present study

suggests that access to most types of race/ethnic workers tends to vary more by type of chain

within price point categories rather than by the type of department store as measured by price

point categories. These results suggest that high end department stores are located in a

manner that provides the same access to nonwhite workers as other types of department

stores.

EMPLOYMENT DIVERSITY 

For the purposes of this study, employment of nonwhite workers is measured by a shortfall

ratio.9 The shortfall is computed as a ratio of total sales workers in order to account for

variations in store employment. Negative values of the shortfall ratio indicate a deficit of

nonwhite sales workers. Since the expected number of nonwhite sales workers cannot exceed

the total number of sales workers, the shortfall ratio per sales worker is always less than

1.0.10 The positive shortfall mean value of 0.113 is significantly different from a neutral

value of 0.0 (a two-sided t test probability less than 0.0001) indicating that the stores in this

segment of retail industry employ more nonwhite workers, on average, than might be

expected from their labor market accessibility in the general population.
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 All of the employment regression equations are statistically significant, with

overall probabilities less than 0.0001, and the proportion of explained variation varies from

0.360 to 0.464. 

Page 7

Mean values of the shortfall ratios for high end department stores (designer/bridge) are

compared to those for the other department store types and tested for statistical significance. 

As expected, the mean shortfall ratio in the high end department stores

(designer/bridge category) is significantly different than the mean shortfall ratios for

the other types of department stores. The two-sided mean difference tests show

probabilities of less than 0.0001 for all four race/ethnic conditions (nonwhite, African

American, Hispanic, Asian). 

Differences in employment diversity were tested further using regression analyses similar

those examining labor market accessibility.11 Consistent with the discussion of mean

shortfall ratios, the price point categories, controlled for metropolitan area, show

statistically significant differences in shortfall ratios across all four race/ethnic groups.

In addition, although chains in the better/moderate category appear to have no significant

influence on employment shortfalls, the chain probability differences within the other types

of department stores indicate they have a significant influence. Taken as a whole, the

shortfall ratio index suggests that the employment of nonwhite sales workers varies both by

type of department store as well as by selected chains within the upper and lower price point

categories.

EXAMINATION OF DISPARITIES AT THE STORE LEVEL

The shortfall ratios measure the direction of nonwhite employment (that is, whether a store

employs more nonwhites or fewer nonwhites than might be expected from its surrounding

labor pool), but it does not show which stores, if any, have employment deficits that might

have occurred by chance. We now examine the shortfalls that would be considered both

negative and statistically significant. Focusing on the firms with the lowest rates of nonwhite

employment has the added benefit that it allows us to measure how many stores might be

classified as potential candidates for some sort of remedial action. 

A binomial test is used to compare each store’s employment of nonwhite sales workers to the

computed proportion of nonwhite workers in each store’s labor market. Those firms are

categoriezed by (1) whether or not they have significant negative disparities between

expected and observed nonwhite sales workers and (2) whether or not they are high end

department stores. A Fishers Exact test is used to determine if the expected number of high
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end department stores with significant disparities is greater than expected. Indeed it is. We

would expect ten stores to have significant disparities, but 47 have such disparities

(probablity less than 0.00000). For African Americans, we would expect four

designer/bridge department stores to have significant disparities, 18 have such disparities

(probability less than 0.0000). Based on chance, 15 stores might be expected to have

significant disparities of Hispanics, instead 55 have such disparities (probability less than

0.0000). Unlike, the results for African Americans and Hispanics, while there are more high

end stores with significant disparities (13) for Asian sales workers than would be expected

(10) this difference was not statistically significant. Consistent with the results reported in

above store chain appears to be related to diversity of employment. Some chains have a

larger percentage of stores with significant disparities than others.

Results are summarized for nonwhites, African Americans, Hispanics and Asians and are

also summarized by type of department store. Table 2 summarizes results for the relevant

race/ethnic groups. For example, 20.8 percent of all department stores with a significant

disparity in the employment of nonwhite sales workers are high end department stores, that

is, in the designer/bridge category. (This is derived from 47 designer/bridge stores with

significant disparities for nonwhite sales workers out of 226 total stores with such

disparities.)

TABLE 2: PERCENT OF STORES WITH SIGNIFICANT DISPARITIES BY 

RACE/ETHNIC GROUP

STORE

TYPE

NONWHITESAFRICAN

AMERICANS

HISPANICS ASIANS TOTAL

STORES

PERCENT

OF

STORES

DESIGNER/

BRIDGE (1)

20.8 20.45 16.37 5.94 111 4.64

BETTER/

MODERATE (2)

7.52 4.55 19.94 9.59 215 8.99

MODERATE/

POPULAR (3)

42.48 40.91 33.93 30.14 718 30.33

OFF-PRICE,

DISCOUNT (4)

29.2 34.09 29.76 54.34 1347 56.34

100 100 100 100

Although designer/bridge (high end) department stores account for just 4.64 percent of all

department stores, they account of 20.8 percent of significant disparities for nonwhites,

20.45 percent for African Americans, 16.37 percent for Hispanics. Only when computing

disparities for Asians are the percent of designer/bridge stores with significant disparities

close to their overall percentage of department stores. In contrast the percent of stores with
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disparities in the off-price discount category is far below their portion of all stores (56.34

percent) with the exception of Asians.

Table 3 summarizes results by type of department store but can also be used to see how

results vary by different race/ethnic groups. For example, 42.34 percent of all high end

(designer/bridge) department stores have a significant disparity in their employment of

nonwhite sales workers. (This is derived from 47 designer/bridge stores with significant

disparities for nonwhite sales workers out of 111 designer/bridge stores.)

TABLE 3: PERCENT OF STORES WITH SIGNIFICANT DISPARITIES

BY STORE TYPE

STORE

TYPE

NONWHITES

AFRICAN

AMERICANS HISPANICS ASIANS

DESIGNER/BRIDGE (1) 42.34 16.22 49.55 11.71

BETTER/MODERATE (2) 7.91 1.86 31.16 9.77

MODERATE/POPULAR (3) 13.37 5.01 15.88 9.19

OFF-PRICE, DISCOUNT (4) 4.9 2.23 7.42 8.83

Looking at designer/bridge department stores, 42.34 percent of these stores have significant

disparities between the expected and actual number of nonwhites sales workers employed.

(This means that 57.66 percent of designer/bridge department stores do not have significant

disparities of nonwhite sales workers.) In contrast only 16.22 percent of these high end

department stores have significant disparities in the employment of African American sales

workers. The percentage for Hispanics is 49.55 and 11.71 for Asians. What is particularly

striking here is the percentage of stores, even across different types of stores, with significant

disparities for Hispanics. While the percentage of stores for African Americans and for

Asians is fairly similar, the percentage for Hispanics is always the highest and for the two

most exclusive store types is more than three times as high. The exception to these findings

is off-price, discount stores where Asians have the largest portion of stores with significant

disparities.
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 There is also some evidence of chain disparities, especially among the less

exclusive department stores, that are probably related to preferences among selected chains

for rural rather than urban locations. 

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SUMMARY

The research examined two hypotheses: the more exclusive the department store, the lower

the proportion of nonwhites in its labor pool, and the more exclusive the department store,

the lower its utilization of nonwhite sales workers. Department store exclusivity was

measured in terms of four price point categories: designer/bridge, better/moderate,

moderate/popular, and off-price, discount. 

The results do not support the first hypothesis. This study is unable to detect significant

differences in labor market accessibility between the designer/bridge category and the others

types of department stores for nonwhites, African Americans, and Hispanics. There is some

evidence that more exclusive department stores have slightly larger Asian labor pools than

other types of department stores.12

By contrast, the results generally support the second hypothesis. We measured employment

utilization in terms of a ratio of shortfall to sales workers. As hypothesized, the mean

shortfall ratios in the designer/bridge category are significantly worse than the mean shortfall

ratios in the other types of department stores regardless of the race/ethnic group. 

Chain ownership has a significant effect on average shortfall ratio values for all types of

department stores except the better/moderate category. Within three types of departments

stores, designer/bridge, moderate/popular, and off-price discount, there appears to be a

certain number of outlying chains, that is, chains with substantially higher or lower average

shortfall ratios than the other chains. There appears to be some evidence that exclusive

department stores have substantially more disparities with Hispanic sales workers than other

kinds of race/ethnic groups. It is not clear from this research whether these disparities might

be tied to qualifications unique to these exclusive stores but the differences between chains

within this type of store suggest that qualifications alone may not explain these results.
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Prepared By:

Office of Research, Information and Planning

U.S. Equal Employment Opportunity Commission

Washington, D.C.

ADDITIONAL INFORMATION

For additional information, visit our web site at http://www.eeoc.gov. Click on STATISTICS

and JOB PATTERNS FOR MINORITIES AND WOMEN (http://www.eeoc.gov/stats

/jobpat/jobpat.html) for sample copies of the EEO-1 form, an instruction booklet and

aggregate statistics. Click on SPECIAL REPORT (http://www.eeoc.gov/stats/

reports/index.html) for other research reports.
U.S. Equal Employment Opportunity Commission

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Cook, Thomas J. 1996. “City-Suburb Differences in African American Male Labor Market

Achievement.” Professional Geographer 48(4) 458-467.

Fasenfest, David, Jason Booza and Kurt Metzger. April 2004. “Living Together: A New

Look at Racial and Ethnic Integration in Metropolitan Neighborhoods, 1990-2000.” 

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Gastwirth, Joseph L. and Sheldon E. Haber. March 1976. “Defining the Labor Market for

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Holzer, Harry J., John M. Quigley and Steven Raphael. 2003 “Public Transit and the Spatial

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