Circuit City Slaughter: Seniority Means a Pink Slip

[one...two...tree 2,762]

Columnist Bill White of the Allentown Morning Call pictures Circuit City CEO Philip J. Schoonover getting a warm welcome to hell -- very warm. Satan tells him, "This place is full of overpaid, outsourcing, golden-parachuting, employee-abusing worms like you."

Schoonover's sin? Laying off 3,400 employees because they had been around for too long and needed to be replaced by minimum wage workers. His punishment? Having a choice of ####### Cheney or Nancy Grace as a roommate and spending eternity listening to Sanjaya's Greatest Hits.

The New York Times took the Circuit City slaughter with much greater equanimity. In his economics column last week, Times columnist David Leonhardt showed some pious sympathy for the laid-off, who will, after a 10 week cooling off period, be able to re-apply for their old jobs at much reduced pay. But he goes on to explain that Circuit City's employee abuse is just part of the larger corporate demand for "efficiency." Wal-Mart, after all, has capped employee pay and taken the stools away from its elderly employees. Sadly, Leonhardt notes:

It's probably not possible to halt these changes. It may not even be desirable. The flexibility of the American labor force seems to be one reason that recessions have become less frequent and unemployment is less of a problem here than in Europe, notes Jason Furman, a leading Democratic economist.

Furman, by the way, is a pretty flexible guy himself. An advisor to John Kerry in '04, then an NYU professor, and now a project director at the Brookings Institute, he's made his mark as a "liberal" defender of Wal-Mart's anti-worker policies. It's fellows like Furman who put the "ick" in the word "Democratic."

But from Allentown to Times Square, no one is commenting on where the new flexibility may be taking us. Time was, not so long ago, when seniority was rewarded with higher pay and other perks. But that higher pay now carries a lethal risk. As a friend who writes software for a major multinational explained to me: "If you ask for a raise, the boss is going to say, 'Why would you want that? It would be like having a bulls-eye painted on your back.'" The more you make, the more tempting it is to fire you.

I experienced this myself a few years ago when I lost a lucrative writing contract with a major media outlet. "Why?" I asked my agent. "They said they were paying you more than any of their other outside writers," she told me, as if that were a sufficient explanation. Foolish me, I thought the raises I had gotten meant the bosses were pleased with my work. What they meant was that I was doomed.

Once you fire the high-performers and experienced workers, the next step will be to demand that employees pay you for the privilege of working. Why not? Most workplaces provide air-conditioned environments and bathroom facilities, complete with soap and paper towels. These are things you'd expect to pay for in a hotel, so why should workers get them free? Having busted his $10-20 an hour senior employees down to $7 and change an hour, Schoonover's bound to see that the best route to higher profit margins is negative pay.

I know what Schoonover's defense will be when he gets to the Pearly Gates: "The market made me do it." He'll be confident about getting in to the Good Place, because for men like him, as well as Leonhardt and Furman, whom he'll bring along as character witnesses, the market is in fact the deity, determining who will starve and who will eat, who will work and who will beg.

But if the deity is someone other than "the market," if He or She turns out to be a moral entity, capable of distinguishing right from wrong, then poor Schoonover -- it'll be Sanjaya for all eternity.

Barbara Ehrenreich is the author of 13 books, most recently "Bait and Switch: The (Futile) Pursuit of the American Dream."

[Otto 83]

Best Buy (and a few others) is kicking their rear....

[William33 110]

There goes the customer service.

Who really cares about you at 7 bucks an hour anyway?

[Niels Bohr 72]

Slave Wage Labor - Having employees work for wages that is not above inflation, static income. Hence, they must work forever if they want to survive. If you're in debt, you're screwed.

Customers are big complainers, especially the pseudo know hows.

Edited April 12, 2007 by consolemaster

[Nagishkaw 510]

Slave Wage Labor - Having employees work for wages that is not above inflation, static income. Hence, they must work forever if they want to survive. If you're in debt, you're screwed.

Customers are big complainers, especially the pseudo know hows.

Yup, you're right !

[mawilson 2,133]

The flexibility of the American labor force seems to be one reason that recessions have become less frequent and unemployment is less of a problem here than in Europe, notes Jason Furman, a leading Democratic economist.

Nuff said.

[eric&gen 0]

Circuit City sucks anywho.

[Widge 0]

I find it incredible that in retail where i work people doing the same job are not paid the same wage. In the UK you do a job you get paid the wage for that job, in Italy where my sister has lived for years in many jobs the govt even sets the wage (retail workers are an example) here at the store I work 50 or so cashiers all work the same job and after our 90days training when we are officially hired we effectively know the same amount so why therefore should we each be earning a different amount per hour ($8 ph differential) utterly crazy. this doesnt happen in many other industries here so why should it in retail.

[Otto 83]

I find it incredible that in retail where i work people doing the same job are not paid the same wage. In the UK you do a job you get paid the wage for that job, in Italy where my sister has lived for years in many jobs the govt even sets the wage (retail workers are an example) here at the store I work 50 or so cashiers all work the same job and after our 90days training when we are officially hired we effectively know the same amount so why therefore should we each be earning a different amount per hour ($8 ph differential) utterly crazy. this doesnt happen in many other industries here so why should it in retail.

FYI - it happens in nearly every industry here, not just retail.

[Widge 0]

I find it incredible that in retail where i work people doing the same job are not paid the same wage. In the UK you do a job you get paid the wage for that job, in Italy where my sister has lived for years in many jobs the govt even sets the wage (retail workers are an example) here at the store I work 50 or so cashiers all work the same job and after our 90days training when we are officially hired we effectively know the same amount so why therefore should we each be earning a different amount per hour ($8 ph differential) utterly crazy. this doesnt happen in many other industries here so why should it in retail.

FYI - it happens in nearly every industry here, not just retail.

that still doesn't make it seem any less crazy to me ......... though in my husbands job having worked there 27 years the guy who started this week after 9 months training will be earning exact same rate as hubby

[Niels Bohr 72]

Hence, that is where the complaining and inefficiency starts in the workplace. Unfair wage, wage based on seniority. This reduces productivity, and it is a hindrance to the professional code.

However, if you follow the economy in the US, inflation is on average annually based on the CPI is roughly 5%. If your husband gets a review and he gets a 2% raise, this will still be lower than the inflation rate. It's a problem with static income. No matter how hard you work, and they only give you 2% raises annually, you will never be rich let alone want to be financially secure.

In other words, 5% inflation yearly with a 2% raise yearly...he'll be making less than the previous year. Most retail give on average about 2% raises to their employees.

Edited April 12, 2007 by consolemaster

[Otto 83]

Hence, that is where the complaining and inefficiency starts in the workplace. Unfair wage, wage based on seniority. This reduces productivity, and it is a hindrance to the professional code.

However, if you follow the economy in the US, inflation is on average annually based on the CPI is roughly 5%. If your husband gets a review and he gets a 2% raise, this will still be lower than the inflation rate. It's a problem with static income. No matter how hard you work, and they only give you 2% raises annually, you will never be rich let alone want to be financially secure.

In other words, 5% inflation yearly with a 2% raise yearly...he'll be making less than the previous year. Most retail give on average about 2% raises to their employees.

Professional Code?

[Niels Bohr 72]

Professional Code?

More like ethics. I don't know. I hadn't work at Best Buy in awhile. I think what I meant to say s that the employees one day will explode.

Edited April 12, 2007 by consolemaster

[homesick_american 1]

Well that's all I needed to hear; I won't shop at Circuit City. Ever.

[Mr. Big Dog 10,747]

In other words, 5% inflation yearly with a 2% raise yearly...he'll be making less than the previous year. Most retail give on average about 2% raises to their employees.

That's what has been going on in corporate America for years now. The above quoted "flexibility of the American workforce" would seem to be a direct result of this phenomenon. The only way to actually increase your salary these days, it seems, is to be disloyal to your employer and keep searching for and pursuing better offers.