Newsletter July 20, 2023

IN THIS ISSUE

POLICY

  • Washingtonians face shrinking paychecks and continued public safety concerns 
  • Department of Revenue officials grilled on capital gains tax rulemaking
  • Washington My Health My Data Act – Part 7: Biometric Data
  • Childcare Collaborative Task Force considers access data
  • Efforts to reduce methane gas and food waste will impact grocers
  • Your opinion matters
  • WR opposes anti-arbitration legislation in letter to Congress
  • WR joins with worldwide organizations to support standardized clothing labeling


ECONOMY

  • Retail sales grew in June amid slower job gains
  • Unprecedented spending forecasted on back-to-school supplies
  • As banks pull back on loans, small businesses look elsewhere


RETAIL THEFT & PUBLIC SAFETY

  • Register now for AG’s Organized Retail Crime Task Force meeting on August 15


TRENDS

  • Survey reveals consumer trends amidst economic fluctuations
  • Ulta Beauty opens livestream events, bringing new opportunities to brand partners


SAFETY

  • Hearing loss accelerates with age

Washingtonians face shrinking paychecks and continued public safety concerns  


With recent 4th of July celebrations, Washington state citizens faced a sobering reality amid the festivities. - From diminishing paychecks to growing public safety and retail theft issues, summer 2023 has brought new challenges.


One big concern is a noticeable reduction in paychecks. Most of Washington’s working citizens will likely experience this due to the newly implemented long-term care payroll tax. Despite significant resistance from House Republican leaders, this tax was implemented on July 1, associated with the WA Cares Fund. Established by 2019’s House Bill 1087, the Fund intends to support long-term care costs.


The program, however, imposes a payroll tax of $0.58 per $100 of earnings on all Washington state workers. The potential forfeiture of contributions for unused benefits or those retiring out of state has fostered a perception of the program as unfair and unpopular. Despite calls for repeal in the 2023 legislative session, the program continues. Yet, the quest for its reversal remains ongoing.


Another factor facing the state’s residents is escalating gas prices, with the new carbon pricing program significantly contributing to the rise. As businesses are charged for the greenhouse gases they emit, the incurred cost is transferred to consumers. This has led to Washington’s gas prices being among the highest nationwide as of July 17, 2023.


Such price hikes impact individuals and ripple across the broader economy, affecting the costs of goods and services sold through Washington’s retailers and diminishing donations to charitable organizations and food banks. 


Equally pressing are the ongoing challenges surrounding public safety and retail theft in Washington. Random acts of violence, such as the recent tragic shooting of a pregnant woman and her husband at a Seattle intersection, highlight the urgent need for policy revision and increased investment in mental health systems.


Current vehicular pursuit policies also remain problematic, excluding law enforcement’s capacity to engage in many serious crimes. The current pursuit law does nothing to prevent stolen vehicle and property crimes. However, there is hope in the recent “Blake fix” bill, aimed at reducing open drug use and related criminal activity. Its efficacy will need to be closely monitored.


Amid these challenges, Washington Retail will continue advocating for our retailers and their valuable workforce. Addressing the rising cost of living and public safety concerns is paramount in ensuring a secure and prosperous future for all.

Department of Revenue officials grilled on capital gains tax rulemaking

Logan Washburn | The Center Square


When the Washington State Department of Revenue heard public comment on the state’s new capital gains tax, officials took several questions and offered few answers. 

“The purpose of this public meeting is to gather feedback on the draft language,” said Michael Hwang, WSDOR tax policy specialist.  


The department held the virtual meeting on July 12 to collect public comment on administrative rulemaking for the state’s new capital gains tax. 


The meeting drew more than 160 attendees, including representatives from the City of Seattle, H&R Block, Bloomberg Tax, the Washington Retail Association, the Washington State Budget and Policy Center, and the Washington Society of CPAs.


The state Legislature passed the new capital gains tax in 2021, which sets a 7% tax on profits of more than $250,000 from selling some assets like stocks and bonds.  


The Washington State Supreme Court upheld the new tax in March, which faced legal challenges under the state constitution’s clause barring different rates of income taxation. 


Bea Nahon with WSCPA said the department should clarify capital loss carryovers and revisit how the capital gains tax will be applied.


“You have some sections there that you provided some examples, but you didn’t provide the answers, and you’re asking for feedback,” she said. “We believe that the answer there is in plain sight.”


Read the rest of the Center Square article

Washington My Health My Data Act – Part 7: Biometric Data

By Mike Hintze, Hintze Law


Welcome to the seventh installment of our blog series focusing on the Washington My Health My Data Act. Part seven discusses biometric data under this Act.


The blog post titled “My Health My Data: Biometric Data” delves into the implications of the Washington My Health My Data Act on biometric data and technologies. The Act expands the definition of biometric data, covering a broader scope than the previously-existing Washington biometric privacy law (RCW 19.375). It introduces new requirements and raises the bar on substantive obligations related to biometric data. The post further explores the definitions of biometric data, the overlapping obligations and new challenges introduced by the Act, and the potential impact on the processing of biometric data due to the risk of litigation under Washington law.


We will continue to delve into this topic in the coming weeks, highlighting additional blog posts examining other components of the Act and the critical issues they raise.


Read Mike Hintze’s blog post here

Childcare Collaborative Task Force considers access data


Access to childcare has accelerated into a crisis since the 2020 COVID pandemic. Thanks to the foresight of the Washington Legislature, which passed SHB 2367 in 2018, a Child Care Collaborative Task Force (C3TF) has been formed to collect data and develop policy recommendations. Task force members include childcare providers, parents, advocates, legislators, community members, and business community representatives.


Survey data tell the depth of the story: In 2019, the C3TF commissioned an assessment report on the scope of the problem in Washington State with key findings: 49% of Washington parents found it difficult or very difficult to find, afford and keep childcare; 27% quit their jobs or left school or training due to child care issues; the estimated direct costs of turnover and missed work due to child care issues is $2.08 billion; the total estimated direct and opportunity costs due to this issue is $6.5 billion!


Expanded scope of work in June 2021: The task force expanded its scope of work in June 2021 to implement a plan to achieve accessible, affordable childcare for all Washington families by 2025. The Legislature also passed the Fair Start for Kids Act in 2021 by investing $1.1 billion to make child care and early learning more affordable for low-income parents.


The December 2022 True Cost of Childcare Report to the Legislature attributed the childcare crisis to market failures because it had not been financed as a ‘public good’ such as K12 education. The subsidy structure under the Fair Start for Kids Act provided a cost model to inform legislators about program affordability for parents and financial stability for childcare providers. This report synthesized four recommendations to increase access to affordable, high-quality care for children and families.

  1. Adopt a rate-setting model for reimbursement rates that provide living wage salaries, benefits, and resources for program enhancements that support quality childcare.
  2. Provide significant relief payments to licensed childcare programs and individuals who provide childcare services.
  3. Develop plans to deliver wage supplements and benefits to the childcare workforce to support a transition to quality childcare rate-setting model.
  4. Create a comprehensive workforce and economic development strategy in partnership with providers, parents, and stakeholders.


WR will remain engaged with the developments from the C3TF as their work on this issue directly impacts retailers, our members’ workers, and their invaluable childcare providers.

It is crucial also for stakeholders to stay abreast of developments relating to childcare and offer input throughout this process by subscribing to the task force’s newsletters and reaching out to share your comments with WR.

Efforts to reduce methane gas and food waste will impact grocers


The Organics Management to Reduce Methane Gas and Food Waste stakeholders’ group has begun meeting to discuss how Washington state should reduce the creation of methane gas due to food discarded as waste into landfills. These efforts will likely directly impact retailers selling produce and other organic products/foods. 


State Reps. Beth Doglio and Joe Fitzgibbon are overseeing a combined process with the intent to introduce legislation during the 2024 Legislative Session. Washington Retail and approximately 80 other stakeholders representing impacted industries, businesses, governmental agencies, and individuals will meet twice monthly until December when they will make recommendations and release findings for consideration by the legislators. 


Food and other organic waste make up a considerable amount of landfill deposits, which creates methane gas as it degrades. Several states and municipalities, most notably California, are implementing programs to reduce waste and methane gas emissions. Strategies include turning the waste into compost and energy used to enrich soil and power machinery. Additionally, a key focus is making the most of edible food by distributing it to those in need through food banks and other hunger-fighting organizations. 


WR will work closely with all stakeholders to ensure any proposed changes and requirements consider the specific business models and needs of retailers that sell groceries. At this time, Washington State has a long way to go to set up the infrastructure to accommodate significant increases in the amount of composting and energy generation envisioned. Stay tuned for future updates as the twice-monthly stakeholder meetings continue.

Your opinion matters


The Department of Ecology is conducting consumer satisfaction surveys regarding convenience and accessibility with their LightRecycle Washington Program and the availability of energy-efficient lighting products. Please take these short surveys and complete your responses by July 31, 2023. Use these links for the LightRecycle Washington Satisfaction Survey and Ecology Energy Efficient Lighting Survey.

WR opposes anti-arbitration legislation in letter to Congress


WR has joined the U.S. Chamber of Commerce and a coalition of organizations in voicing strong opposition to several bills in the 118th Congress to prohibit arbitration and class action waiver provisions. Arbitration, an efficient and cost-effective dispute resolution mechanism since the Federal Arbitration Act of 1925, is under threat from efforts to replace it with the flawed class action litigation system.


Empirical evidence supports the effectiveness of arbitration. Studies indicate that claimants in arbitration often achieve better results than in court. By comparison, class action settlements often yield minimal or no compensation for class members while attorneys amass substantial fees.


Critics of arbitration often misrepresent it as unfair. However, arbitration providers and courts ensure that arbitration operates fairly and that agreements are only enforced if they meet basic guarantees of fairness and due process. This is supported by the American Arbitration Association (AAA), the nation's largest arbitration provider, which has developed fairness rules for employment and consumer arbitrations.


Despite the lack of evidence showing systemic problems with arbitration, the 118th Congress has seen the introduction of multiple bills and amendments that attack the availability of arbitration and class action waivers in numerous contexts. If these legislative efforts succeed, they could render unenforceable potentially millions of arbitration provisions that currently allow for the orderly and economical resolution of disputes.


These attacks on arbitration are inaccurate and unnecessary. They threaten an important alternative to litigation that has benefited consumers, employees, and businesses for decades. WR strongly recommends that attempts to prohibit arbitration or class action waivers be opposed. The only real beneficiaries of these anti-arbitration provisions will be class action lawyers who stand to gain from the potential increase in class action lawsuits, which often enrich them while providing little benefit to class members.

WR joins with worldwide organizations to support standardized clothing labeling


WR signed on in a letter last week to representatives from the global fashion and sportswear industries, along with their enablers and stakeholders, advocating for a significant shift in labeling requirements for textiles, garments, footwear, and related accessories.


WR urged authorities worldwide to modernize domestic labeling regulations and legally endorse sustainable, economical digital labels.


Over the past six decades, a complex hodgepodge of labeling requirements, including care instructions, fiber content, importer requirements, and origin details, have emerged globally. Originally intended to help consumers make informed purchases, these requirements now obstruct the industry's sustainability efforts and the promotion of a circular economy, including traceability enhancement. Industry estimates reveal that these requirements lead to the annual production of approximately 5.7 million miles of label tape, equivalent to twelve round trips from the Earth to the moon.


Fortunately, digital solutions like QR code labels offer a way to significantly reduce the material waste from these regulations. Transitioning to digital labels could drastically aid decarbonization efforts, potentially eliminating at least 343,000 metric tons of CO2e from industry supply chains.


In response to the growing consumer interest in digital information, governments worldwide are adopting digital approaches, such as the proposed EU digital product passport and replacing traditional labeling requirements with electronic labeling for consumer electronics products in countries like Singapore and Australia.


Read the full article

Retail sales grew in June amid slower job gains


Despite a slower growth in employment, retail sales continued their upward trajectory in June, indicating a robust consumer sector. The economy might be showing signs of cooling, but consumers, buoyed by a still-growing labor market and a substantial savings buffer, continue to drive the economy's direction.


One of the key drivers of this spending is the back-to-school season, a significant shopping event.


Although the spending pace has decelerated, consumers' financial health remains strong, enabling them to support spending for the majority of the year. This financial strength is partly due to the excess savings accumulated during the pandemic and the easing inflation.


Data from the U.S. Census Bureau revealed that overall retail sales in June increased by 0.2% from May and 1.5% year over year. In comparison, May saw a 0.5% month-over-month increase and a 2% year-over-year increase.


A breakdown of the June sales data shows an increase in six out of nine retail categories on a yearly basis. Online sales, health and personal care stores, and electronics and appliances stores led the growth. On a monthly basis, four categories, including furniture and home furnishings stores, showed an increase. Despite slower job growth, the willingness of consumers to spend, backed by their strong balance sheets, continues to bolster the retail sector.

Unprecedented spending forecasted on back-to-school supplies


According to a recent survey, this year is expected to bring record-breaking purchases of school and college essentials, according to a recent survey. Spending on school supplies is expected to hit a remarkable $41.5 billion, a significant rise from last year’s $36.9 billion. College-related spending is also predicted to surge to $94 billion, a $20 billion increase from the 2022 record.


Retailers have been preparing for months to ensure enough stock of necessary items for the upcoming academic year. The 2023 research indicates that American consumers are eager to begin shopping early for their school and college purchases.


Shopping for the new academic year is underway. As of early July, over half (55%) of consumers reported that they had already started. Despite the early start, 85% of consumers reported in early July that they still had completed just half of their shopping.


Families with children in elementary through high school plan to spend an average of $890.07 on school supplies this year, approximately $25 more than the previous year’s record. This rise in expected spending is primarily due to an increased demand for electronics. College students and their families are expected to spend an average of $1,366.95 per person, up from $1,199.43 the previous year.


Despite the anticipated increase in spending, consumers are still seeking the best value and deals. They are comparing prices, considering off-brand or store-brand items, and are more likely to shop at discount stores than the previous year.

As banks pull back on loans, small businesses look elsewhere


The escalation of interest rates and heightened prices, compounded by a limit on bank charges, have intensified the strain on small business proprietors and complicated lending scenarios for many banks. The inflationary interest-rate landscape has led to more restrictive credit avenues across numerous banking institutions. In the current climate, banks are exercising extreme prudence in their credit decision-making processes, thereby exacerbating credit acquisition difficulties for small-business owners.


However, small-business owners can potentially mitigate these challenges by turning to smaller, community-based lenders, especially Community Development Financial Institutions (CDFIs). These institutions can provide not only access to credit but also a broader range of support typically neglected by larger financial entities.


Building a relationship with CDFIs can be beneficial, as they are specially equipped to comprehend the needs of small businesses, and they often foster closer collaborations with them.


Concerns about obtaining loans are growing among small businesses, with a recent MetLife and U.S. Chamber of Commerce quarterly survey revealing that 76% of respondents believe the escalating interest rates are curtailing their credit access. This is a marked increase from the previous quarter's 66% and a year ago when the figure stood at 60%. The rising rates are not just limiting their borrowing power but also hampering their growth. Half of the small-business owners surveyed have postponed their expansion plans due to high-interest rates, and 74% find it increasingly difficult to service their existing loans.


Businesses are resorting to a combination of alternate financing methods. The survey shows that 71% are dipping into personal savings, 67% are leveraging credit cards, and 59% are turning to local banks or credit unions for their financial needs.


Concerns about obtaining loans are growing among small businesses, with a recent MetLife and U.S. Chamber of Commerce quarterly survey revealing that 76% of respondents believe the escalating interest rates are curtailing their credit access. This is a marked increase from the previous quarter's 66% and a year ago when the figure stood at 60%. The rising rates are not just limiting their borrowing power but also hampering their growth. Half of the small-business owners surveyed have postponed their expansion plans due to high-interest rates, and 74% find it increasingly difficult to service their existing loans.


As a result, these businesses are resorting to a combination of alternate financing methods. The survey shows that 71% are dipping into personal savings, 67% are leveraging credit cards, and 59% are turning to local banks or credit unions for their financial needs.

Register now for AG’s Organized Retail Crime Task Force meeting on August 15


The Office of the Attorney General is holding its fourth Organized Retail Crime Task Force meeting on August 15, 2023, between 9:00 a.m. and 12:00 p.m.


Those wishing to participate in person must RSVP using this link by Tuesday, August 1. The meeting will be hybrid. In-person attendance at the Seattle Office will be limited due to available space. RSVPs for in-person attendance will be accepted in the order received.


For any questions, please reach out to the Policy Team at policy_team@atg.wa.gov.

Survey reveals consumer trends amidst economic fluctuations

A July survey reveals intriguing insights into current consumer behaviors, reflecting the economic climate's impact on spending habits and lifestyle choices.


Consumer confidence in the economy has seen a slight uptick, with 37.5% of adults expressing confidence, a 1.9% increase from the previous month and a significant rise from 28.3% in July 2022. This increased confidence comes despite widespread awareness of price increases across various sectors due to the pandemic and inflation. However, the percentage of adults noticing these price hikes has decreased month over month.


In response to these price increases, consumers are adapting by shopping for sales more often, switching to store brands or generic products, and using coupons more frequently. This trend is particularly noticeable among Walmart and Target customers.


Despite the price increases, 35.7% of respondents reported a decrease in their standard of living, a slight improvement from the previous month's 38.7%. Fluctuating gas prices have also influenced consumer behavior, with 32.7% of adults indicating they will drive less, and 19.1% spending less on groceries. However, 32.6% stated that these fluctuations had no significant impact on their spending.


Gas price fluctuations have also led to changes in shopping behaviors, with 31.7% of adults taking fewer shopping trips and 30.2% shopping closer to home. The number of those shopping for sales more often has decreased to 30.1% from 33.1% last month.

Interestingly, the need to be more practical and realistic in purchases has decreased since last month, with 41.8% of adults expressing this sentiment, down from 47.9%. Similarly, the focus on purchasing only what is needed has also decreased to 45.6% from 49.7% last month.


Looking ahead, the spending score, an indicator of future consumer spending, has slightly increased to 82.74 from 82.59 last month, suggesting a potential increase in future spending. Major purchase plans over the next six months have also seen a slight increase, particularly in home improvements and car purchases.


In terms of memberships, both Amazon Prime and Walmart Plus saw a slight decrease month over month. This month, 56.3% have Amazon Prime, down from 57.7% in June, and 17.2% have a Walmart Plus Membership, down from 18% in June.

Ulta Beauty opens livestream events, bringing new opportunities to brand partners

Ulta Beauty, the country’s leading beauty retailer, has partnered with livestream shopping platform Buywith. This initiative provides Ulta’s brand partners a platform to host live shopping events, creating real-time interactions with customers. It Cosmetics, an early adopter, began hosting livestream promotions on the Ulta site in June 2023.


Ulta Beauty’s Senior Director of Digital Innovation, Agustina Sartori, emphasized the unique value of live shopping in engaging beauty enthusiasts. The successful prior collaboration with Buywith led to the natural progression of bringing brand partners on board. This experiment will offer opportunities for further learning and optimization of this interactive touchpoint.


Adi Ronen, Co-founder, and CEO of Buywith, also expressed enthusiasm about the partnership. He anticipates that the collaboration will empower Ulta’s brand partners to leverage the power of live shopping and provide a unique, interactive experience for beauty enthusiasts.


Besides this, Ulta Beauty is transforming its digital retail operations using Google Cloud technology. This digital overhaul aims to deliver a personalized customer experience. Implementing Google Cloud, Google Kubernetes Engine (GKE), and Google Cloud’s Anthos will facilitate this transformation, resulting in significant savings in additional licensing fees.


The company is launching its revamped e-commerce platform with distinct microservices performing unique functions, enabling quicker development and testing of new features. Although these interconnected microservices can introduce new system complexities at scale, the innovation marks a significant stride in enhancing Ulta Beauty’s digital retail operations.

Hearing loss accelerates with age


Concerts, iPods, thunderous sporting events, and work in loud locations may contribute to an individual suffering hearing loss in the future. These sources of sound are affecting all generations of workers.


Additionally, we all experience a natural degradation of our sense of hearing which most experience after the age of 40. Therefore, external factors combined with the aging process can make our hearing loss an even more significant concern.


When working with seasoned employees, be aware that instructions you shout from across the room may not be understood or heard because certain tones or frequency ranges can drop out and be inaudible. In addition, the employee might also be experiencing a ringing in their ears, a condition known as tinnitus, which can make it difficult for the employee to hear warning shouts or instructions in a noisy environment.


A few practical mitigation ideas:

  • Always wear hearing protection when noise levels remain sustained above 85 dB. See this noise level chart.
  • Several noise apps for your smartphone can provide a preliminary evaluation.
  • Try to reduce background noise levels as much as possible by shielding noisy equipment.
  • Communicate important information visually.
  • Reduce echoes in the workplace with improved acoustics.
  • Sirens or warning alarms should have alternating frequencies.
  • Provide hands-free telephone headsets with adjustable volume switches.
  • Speak clearly.


Technology can help us improve hearing somewhat, but it’s currently a sense we can’t get back once we lose it.



Our safety team is available to help members take their safety program from compliance to quality safety practices. Contact us at safety@waretailservices.com to learn more.


WR diversity statement


WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.


We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.

Washington Retail Staff

Renée Sunde

President/CEO

360.200.6450

Email

Rose Gundersen

VP of Operations

& Retail Services

360.200.6452

Email

Mark Johnson

Senior VP of Policy & Govt. Affairs

360.943.0667

Email


Robert B. Haase

Director of

Communications

360.753.8742

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