Wednesday, March 27, 2013

When workers aren't considered an asset there are consequences

Renee Dudley at Bloomberg writes about customers leaving Walmart for other retailers. Why? It would appear that in their attempt to cut the fat Walmart management lost track of where fat ended and muscle began. I have to feel that this is the inevitable consequence of the view of employees as a cost of business, not an absolutely necessary contributor to the success of a business. Many people have recognized for a while now that in spite of the ads they run touting their happy workers and how they call them Associates the reality on the ground just isn't that nice.

Full time non-management workers don't make that much. Part-timers make so little they can't afford health insurance and often are on state aid. Unions are hated so virulently that Walmart has a history of doing anything to avoid them, even destroying departments at every store when one store voted to unionize. There's even a WikiPedia article on criticisms of Walmart with a section on employees and labor relations. The attitude also affects Walmart's vendors since the only way that many of them see to meet Walmart's demands on them for price cutting is to send jobs overseas and it seems that adequately policing their suppliers costs too much in money and effort.

But Walmart isn't alone. The New York Times had a piece about the history of the rise of temporary employment. Those who have their own vested interests in the temporary placement of workers speak glowingly of how it can lead to full time employment. Of course the problem with that argument is that if it really was growing because of its use to help vet permanent workers the absolute numbers of temp workers wouldn't be growing at the rate it is even as permanent full time employment is barely budging. Remember that when you see the unemployment headlines you are seeing what the BLS calls U3. The really important number in terms of gauging what's happening to the American work force, though, is U6.

Consider this table from the BLS web site. It shows that in February even as U3 dropped to 7.7%, U6 was at 14.3%. The definition of U3 is
Total unemployed, as a percent of the civilian labor force (official unemployment rate)
U6 is defined as
Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
with this note.
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.

Those are just the economic costs to people in the work force, though. There is also the issue of safety. In an earlier post I pointed to an article on Salon that tells the story of a temporary worker who was not adequately trained for the work he was doing and not provided with the appropriate clothing or safety gear. The result of this negligence was a painful death. The Huffington Post had an article concerning a study that also linked the growth in contingent workers with increasing danger in the work place.

What does all of this say about the attitude that at least some business management holds towards their employees? The most charitable interpretation is that they are viewed solely as a cost of doing business. And when a human being is abstracted into an entry on a spreadsheet that subtracts from profits it becomes all too easy to ignore the costs that relentless labor cost cutting has to them as individuals and to us as a society, rationalizing it as something that has to be done for the sake of the company while not recognizing that it's bad for the company too.