Internal Labor Markets in Retailing: The Early Years

Abstract

This study of two New York City department stores shows that, contrary to the implications of previous studies, internal labor markets existed before World War I, outside heavy industry, and in the absence of overt worker discontent. Among male office employees in one store, the internal market was marked by job ladders, relatively high wages, and many senior employees. In the other store, female employees in both the office and sales divisions were in a mixed situation, characterized by rudimentary job ladders and pay increasing with seniority but low average wages and no protection against arbitrary dismissal. The authors hypothesize that classic internal markets exist only where workers possess the collective power to impose substantial turnover costs on the employer.