Day: July 29, 2013

Monday, 29 July 2013

08:07 – I didn’t realize that this phenomenon had made it to Britain: All part-time Sports Direct staff employed on zero-hours contracts

That’s been commonplace here for years, of course. Many US employers, particularly brick-and-mortar retailers and fast-food restaurants, employ as few full-time permanent staff as possible. They depend largely on part-time and temporary employees, who are generally paid minimum wage and receive few or no benefits. It’s even worse in the US than what the article describes in Britain. Not only are part-time employees unsure “of how many hours they will work each week”, they’re unsure of how many hours, if any, they’ll work each day. It’s not uncommon for a temp employee to be called out in the morning to work for a couple hours, be sent home, and then be called out later the same day to work another couple of hours. About all they can be sure of is that they’ll never be offered enough hours in a week to qualify as full-time.

I think this practice is contemptible, and I’ll never engage in it myself, but I don’t really blame the employers. It’s just a matter of unintended consequences. Well-meaning legislators and bureaucrats attempt to protect low/no-skill workers by implementing laws and regulations, including minimum-wage laws. Employers defend their own interests by taking advantage of every exception and loophole to the maximum extent possible. Employees suffer. If the laws and regulations are tightened, the employees find they have no jobs at all.

I remember the first time we invited Mary and Paul to go along as our guests to Costco. Mary declined. When I asked her why, she said that she didn’t like how Wal-Mart, Sam’s Club, Costco, and similar companies treated their employees. My impression was that Costco wasn’t like that, so I did some quick research, including talking to a Costco employee. Mary was and is right about Wal-Mart and Sam’s Club. They treat their employees very badly. But I found that Costco employees were at the time being paid an average of $41,000/year and had full benefits. I sent Mary a couple of links to articles about how Costco treated its employees, and told her about the Costco employee I’d spoken with. This woman was a single mom, and praised Costco to the heavens. When she started with Costco, during her probationary period before becoming full-time permanent, she wasn’t yet eligible for the full benefits package. She was a single mom, and her child was ill and needed expensive medical treatment. Costco found out about her situation and waived the waiting period, putting her and her child under full medical coverage before they would normally have become eligible. By doing that, Costco gained an employee who will be loyal for life, and showed themselves to be the kind of company we want to do business with. Yeah, Sam’s Club may be a bit cheaper because their labor costs are lower, but we’ll never know because Sam’s Club is not the kind of company we want to do business with.

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