Stephen Lamar, American Apparel and Footwear Association CEO, joined Yahoo Finance Live to discuss his outlook for the retail sector and why retailers may be struggling to keep shelves stocked.
JARED BLIKRE: Let's start with the numbers this morning. What are you seeing in the industry? We've heard about the hiring shortages. How is that playing out in the industry?
STEPHEN LAMAR: Well, and thanks for having me on. We are pleased to see the jobs report, the jobs growth. I mean, it was a good start, but not good enough. You know, certainly not for our industry where we actually shed some jobs. It's clear the pandemic is still creating problems. You know, there's daycare issues. There's incentives for workers not to come back to work, to not answer job vacancies.
We're looking to hire more people and not finding the workers that want to fill those jobs. This certainly is a job crisis that's being perpetuated. And you can see also that a lot of folks have really chosen to stay out of the workforce. So we're hoping that over time, that will reset itself. And we'll be able to get more workers so we can sustain our recovery as well.
SEANA SMITH: Stephen, from here, you're talking with in your industry right now. I guess, why do you think that is? Why do you think we're seeing such a gap between the workers that are needed and then the workers who are available at this point?
STEPHEN LAMAR: Well, there's a variety of things going on here. You know, workers are-- you know, they're incentivized, in many respects, not to come back to the workforce. We've created incredible amount of programs to help tide them over-- very important during the pandemic. But as the pan-- as we're coming out of the pandemic, we need to make sure that the incentives really favor workers coming back in.
Over time, we're going to see, you know, daycare situations that are going to have to kind of rightsize themselves as well. Where-- we have jobs that we have available, and we have benefits that are available to really bring those workers back. One of the problems that we're encountering right now is the extraordinarily high cost of transportation. Big, big problem that we're experiencing, which actually minimizes even our ability to hire more workers as much as we would like, where we're paying transportation costs that are 400% higher than they were just a few years ago. Again, another pandemic related issue.
JARED BLIKRE: Well, let me follow up on that. Do you see this as transitory as maybe the Federal Reserve has been talking about, or do you see this as something more persistent? And then if it is persistent, what can you do to mitigate the damage from it?
STEPHEN LAMAR: Well, shipping costs right now are out of control. And again, this is, as I mentioned, it's built on some of the COVID related disruptions and delays that we've been seeing in supply chains for the better part of a year. We're hoping that it will mitigate itself. We're not too optimistic. We think, actually, this could get worse.
And so we're calling on the federal government, the Federal Maritime Commission to investigate some of the pricing practices that go on with shipping companies as well as at the ports. Because we're seeing these transportation costs show up, both in delays at the ports, as well as increased shipping prices. And that's going to show up as, really, inflation across the board. Not just our industry, but other industries as well. We're already seeing that. And unless this is addressed in the near term, this could really set in for a longer period of time.
Another short-term tactic that can be taken right now could be to eliminate the tariff overhang. We pay extraordinarily high tariffs still, tariffs that were imposed a couple of years ago during the Trump administration. But the Biden administration is still imposing those on us. Those are tariffs that are paid by the same group of companies that are facing these enormous shipping costs and challenges. If we could eliminate the tariffs, we could provide some immediate relief to some of those companies that are facing some of those transportation costs right now.
SEANA SMITH: Yeah, and Stephen, speaking on those tariffs, we know that President Biden will be meeting with European leaders next week. What do you hope comes from that, those discussions, in terms of tariffs? And what could potentially resolve some headwinds here for your industry?
STEPHEN LAMAR: Well, we think there's some persistent-- there's some persistent challenges that have occurred between the US and the European Union trade challenges over many, many years. We would love to see those resolved. Unfortunately, we've been dragged into a lot of those challenges where both the Biden administration, and in retaliation, the European governments, are proposing to put tariffs on our products, even though we're not connected to the underlying dispute.
So we're hoping they will quickly resolve those underlying disputes so they can take tariffs, the threat of tariffs against their industry, off the table. One of the things that we keep saying is, is that we're not going to change behavior in other countries by raising the cost of prices for Americans or by making it more difficult for Americans to hire workers because they have to pay these ridiculously high tariff costs.