Fascism can take many forms. Darryl
----- Original Message ----- From: <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, June 11, 2003 9:15 AM Subject: [Futurework] Destructive employment practice > This leads to death of workers in other ways. "most die of heartbreak" The > cold calculating way in which eager, striving, "successful" employees were > discharged reminds one of the way in which the concentration camps operated. > > "arbeit macht frei" > > arthur > ============================== > Left Behind -- Casualties of a Changing Job Market --- Pay Check -- New > Recipe for Cost Savings: Replace Expensive Workers --- In a Tight Market, > Employers Are Finding Job Seekers Willing to Accept Less --- The Ax Falls at > Circuit City > 11 June 2003 > The Wall Street Journal > A1 > [Fifth in a Series] > On the morning of Feb. 5, Robert Wood waited outside his Circuit City store > with a handful of other employees. They had been told to report for a quick > meeting before the store opened. Aware that the company was beset with > financial difficulties, Mr. Wood was relieved to see that the others waiting > were, like him, among the store's top salesmen. > A seven-year veteran of Circuit City Stores Inc., Mr. Wood was the second > highest-paid performer at the Jensen Beach, Fla., store, moving more than $1 > million in computers and consumer electronics last year, he says. He earned > $54,000 in salary and bonuses, and a place in the President's Club for top > salesmen. > At 10 a.m., the store manager ushered the waiting employees inside the store > with a smile, saying he wanted to explain the company's new "staffing > model." The first salesman went into the manager's office, then exited > quickly. Mr. Wood's heart sank as the salesman cleared out his belongings > from a locker and was escorted out the door by another manager. When Mr. > Wood's turn came, the manager opened a packet with his name preprinted on > the cover and slid the dismissal documents to him one by one. The firing > took less than five minutes. > "We didn't see that coming," Mr. Wood says. > Neither did the other 3,900 highly paid commissioned salespeople the company > laid off that day, which some still call "Bloody Wednesday." In Circuit City > stores across the nation, sales personnel waited to hear their fate from > managers. Some expected to be told that their commissions would be cut. > Others thought they would be told that underperforming staffers would be > fired, so they would have to work harder. > Instead, they each sat before a manager who handed them an envelope > containing the terms of their dismissal. Mr. Wood and the others were > faulted for nothing. They simply made too much money at a time when the > company was desperate to economize. Circuit City then hired about 2,100 > lower-paid hourly workers to replace Mr. Wood and the others, who had > represented 20% of its sales force. > In doing so, the retailer made an increasingly common cost-saving move: > swapping expensive labor with lower-paid workers. The approach, which is > generally legal, doesn't eliminate the position but rather the high-paid > person in it. The technique is especially attractive to service businesses > such as retail. Like so many companies today, they face massive pressure to > cut their labor costs. But unlike manufacturers, they have jobs that can't > easily be automated or shipped overseas. > The workers getting the ax are casualties of a job market changing > profoundly as the economy slowly recovers from the excesses of the '90s. As > one industry after another struggles with overcapacity and grinds costs > down, many jobs are vanishing permanently. A wide swath of workers, from > well-educated professionals to young unskilled laborers, find themselves > scrambling for employment. Last week unemployment rose to 6.1%, the highest > level since 1994. > Administaff Inc., a Houston company that manages payrolls for 5,000 small- > to medium-size businesses nationally, noticed last year that its client > companies replaced terminated employees with workers paid an average of 3% > less. Richard Rawson, the company's chief financial officer, believes many > of his clients rushed to cut expensive staff when the economy weakened. When > they needed to staff back up quickly, the labor markets had weakened and > replacement workers were willing to accept smaller paychecks than their > predecessors. > Circuit City's executives realized they could no longer afford to pay big > commissions to its sales staff, while its rivals paid less. Ten years ago, > Circuit City's $3.27 billion in annual revenue was twice the size of > archrival Best Buy Co. But its sales approach -- small stores with limited > inventory and a commissioned sales force -- proved unworkable as customers > flocked to self-service stores with big inventories. Last year, Best Buy's > sales hit $19.6 billion, more than twice Circuit City's $9.5 billion. > To deal with falling prices and an eroding customer base, the company > examined its costs. Among its conclusions: high-paid sales help no longer > fit the times. "Was it hard? Absolutely," says Jeffrey S. Wells, Circuit > City's senior vice president of human resources and training. "Is it > difficult for someone not close [to the situation] to understand? > Absolutely." The company decided that dismissing higher-paid staff and > replacing them with lower-paid workers "was the best thing long-term," says > Mr. Wells. > In deciding which employees to keep and which to discard, Circuit City set > strict salary caps. Based on average wages for retail workers in different > cities, employees surviving the cuts would be those making $14 to $18 an > hour, including commissions, or $29,100 to $37,400 a year for full-time > work. "It is not the person who earned the most that was always the best," > says Mr. Wells. The company says that in its fiscal 2004 it will save $130 > million in pretax labor costs as a result of cutting the salesmen and about > 200 repair workers. > Before the restructuring, Circuit City treated the top sellers among its > more than 10,000 sales personnel well. Top-ranked salesmen, often older, > more-established workers with considerable sales abilities, were invited to > join the President's Club, making them eligible for prizes such as weekend > vacations. Mr. Wood, of Jensen Beach, Fla., was taken aside by a manager > shortly after his 1996 hiring and urged to act not as an employee, but as an > independent business whose earnings power was unlimited. "I walked out the > door at night and clicked my heels," he says. > Mark Combs wasn't expecting the good times to end. A 42-year-old member of > the President's Club, Mr. Combs had left behind a 15-year career in printing > to sell computers for a Circuit City store in Jacksonville, Fla. Over 2 1/2 > years, he built rapport with steady customers and regularly pulled in the > equivalent of $20 an hour. In January, his manager approached him about > management training. He left the Feb. 5 meeting, severance papers in hand, > thinking about the $200,000 house on which he just had put a down payment. > "I felt like I really let my family down," he says. > Circuit City announced its move in part to show investors it was serious > about cutting costs. But when companies replace employees with lower-paid > workers they usually do it far more quietly. During the past two years, US > Airways Group Inc., which emerged from bankruptcy-court protection in March, > has been pulling its big jets out of midsize cities and replacing them with > less-expensive regional service. That meant the airline could change job > classifications for baggage handlers, ticket-counter agents and other > workers, and cut wages even under a union contract. Since those employees > were handling only regional jet traffic, they were paid less, even though > they were doing similar work. > Ticket-counter agent Carleton Smith, of St. Louis, learned earlier this year > that his pay would drop to $13 an hour from $21 an hour. In February, > unwilling to take such a big cut, he left the airline, though he remains on > furlough and could be called back to work. "I look at $13 an hour doing this > exact same job and I say, `It's a slap in the face,'" says Mr. Smith, 50, a > 17-year employee with US Airways and a predecessor airline. "The airline > industry is restructuring its pay structure. It's happening, whether I like > it or not." > US Airways spokesman David Castelveter says that the carrier tried to work > out transfers for "as many employees as possible" so that they could keep > their $21 an hour pay, but that most "were entrenched in their communities, > they had children in schools or their spouse was the breadwinner, so they > chose to stay in their particular location." > With work scarce, the lower-paid jobs drew plenty of applicants. Until last > year, Shannon Spegal, of Lexington, Ky., had managed restaurants. The > 38-year-old mother of two girls regularly put in 12-hour days, and if a > server or cleaner didn't show up for work she did the job herself. Hoping > for an easier schedule, Ms. Spegal responded to US Airways' newspaper > advertisement seeking customer-service agents. > She was discouraged by the $8.70-an-hour pay for replacement ticket agents, > about half what she made at her restaurant job. "I almost turned around and > left," she says. But the better hours and the benefits were attractive, and > when US Airways offered her a job, she accepted. She and the other new hires > found themselves in the midst of resentful veteran employees. Only about > four remained, now making $13 an hour instead of their previous $21. A > co-worker confronted Ms. Spegal directly. "She said, `You're stealing my > job.' I was like, `No, I'm not. The person I replaced, they could have > stayed,'" recalls Ms. Spegal. > There's nothing illegal about getting rid of expensive workers and hiring > less-costly employees in their place, so workers usually don't raise the > practice in employment lawsuits. "Very often, the parties don't end up > debating that issue," says Daniel M. Klein, an Atlanta attorney who > represents employees in discrimination cases. Though a wave of replacements > could disproportionately affect older workers, who tend to be better paid, > employees would have to prove the jobs cuts were made for discriminatory > reasons to prevail in court. > At Wal-Mart Stores Inc., managers are judged in part on their ability to > keep payroll costs at a strict percentage of sales, according to former > managers. Some say that puts extra pressure on higher-paid workers to be > more productive. "You keep people making $10 an hour to a high standard," > putting more pressure on them for small mistakes, says Lyndol Jackson, a > Wal-Mart manager until he left for another job in 1998. Often, those workers > quit and can be replaced less expensively, adds Mr. Jackson, who lives in > Memphis, Tenn. > Former Wal-Mart cashier Dana Mailloux, 33, worked for eight years at a store > in Fort Myers, Fla., moving up to $9.15 an hour. Last fall, her manager > called her and more than a dozen other longtime employees into his office > and told them he had to lay them off because of lack of work. That same day, > Ms. Mailloux says, she passed a room with six new hires, red vests in hand, > filling out paperwork. Returning to the store that weekend, she says, she > saw newly advertised positions listed on a bulletin board. "Basically, I was > thrown out like a piece of trash," says Ms. Mailloux. > Wal-Mart spokeswoman Sarah Clark says the company continually lays off and > hires workers as sales rise and fall. She says that if "labor adjustments > are necessary," the company before making cuts asks for volunteers to take > time off and carefully controls hours. "It is ludicrous and contrary to our > business model to think the company would benefit from replacing experienced > associates with new, lower-paid ones," Ms Clark said in a statement. "It's > clear that experienced associates are golden with us." Ms. Clark declined to > discuss Ms. Mailloux's dismissal, citing employee privacy. > Once a worker gets pushed out of a job, chances are his or her next position > won't pay as much. A 1992 study for the W.E. Upjohn Institute for Employment > Research found displaced workers earned an average of about $1,200 a year > less than they would have earned if they had stayed in their previous job, > even after five years. > Mr. Combs, the former Circuit City salesman from Jacksonville, figured he > was on the path to a lower-paying job. But within weeks he found a job at > CompUSA Inc., a Circuit City competitor, for a little less than the same > pay. He closed on his house in April. > For Gregory S. Fields, a 30-year-old Circuit City salesman from Trumbull, > Conn., the job market has been rough. Company-paid health-care benefits for > him, his wife and small daughter ran out just a few weeks after his > termination. He inquired about a similar job at competitor Best Buy, but > nothing was available. A few weeks after his dismissal, he trudged to a > local shopping mall to inquire about an opening for a security guard. Told > he would make just two-thirds of what he made at Circuit City last year, he > turned around and went home. "I can get $9 to $10 an hour, but I'm worth > more than that," says Mr. Fields, who had earned as much as $60,000 a year > at Circuit City. > Mr. Fields recently sold his cherished 21-foot fishing boat to raise cash, > and is "riding out" his unemployment benefits of $300 a week. He is > contesting his dismissal, arguing that he shouldn't have been fired while he > was on a short-term disability leave because of a car accident. He will > resume his job search this month, he says, if tests show his back has > improved. "Why get rid of good people who had been there for years and hire > new people who had to be trained?" he asks. > Mr. Wood, of Jensen Beach, was prepared. He has learned to be flexible > through two decades of corporate upheavals. In the 1980s, he lost his job as > national account manager at HealthTex, a children's clothing maker, when it > underwent a troubled leveraged buyout. He then went to work as an > independent sales representative for a clothing maker, but as the retail > business consolidated in the early 1990s, he was once again out on the > street. "It's always the same," he says philosophically of his job losses. > "It was never because of performance." > For its dismissed sales staffers, Circuit City offered a letter saying they > were cut for financial reasons, but no letter of recommendation. Mr. Wood, > who had learned to be prepared for the next economic downturn, had kept > copies of his sales results. This helped him quickly land a job selling > kitchen redesigns for a home-improvement chain. > He expects to earn 21% less than he did at Circuit City. He has put off > buying furniture for his house and a used car for his teenage son. He's > still angry that his job was eliminated before the company's fiscal year > end, depriving him of about $500 in company 401k contributions. > "I'm not happy but I'm not going to crucify them," says Mr. Wood. "I knew my > time in Circuit City couldn't go on." > --- > =========================================== > _______________________________________________ > Futurework mailing list > [EMAIL PROTECTED] > http://scribe.uwaterloo.ca/mailman/listinfo/futurework > _______________________________________________ Futurework mailing list [EMAIL PROTECTED] http://scribe.uwaterloo.ca/mailman/listinfo/futurework
