How Corporate America Used the Great Recession to Turn Good Jobs Into Bad Ones
Abracadabra! You're a part-timer.
Watch closely: I'm about to demystify the sleight-of-hand by which good jobs were transformed into bad jobs, full-time workers with benefits into freelancers with nothing, during the dark days of the Great Recession.
First, be aware of what a weird economic downturn and recovery this has been. From the end of an "average" American recession, it ordinarily takes slightly less than a year to reach or surpass the previous employment peak. But in June 2013—four full years after the official end of the Great Recession—we had recovered only 6.6 million jobs, or just three-quarters of the 8.7 million jobs we lost.
Here's the truly mysterious aspect of this "recovery": 21% of the jobs lost during the Great Recession were low wage, meaning they paid $13.83 an hour or less. But 58% of the jobs regained fall into that category. A common explanation for that startling statistic is that the bad jobs are coming back first and the good jobs will follow.
But let me suggest another explanation: the good jobs are here among us right now—it's just their wages, their benefits, and the long-term security that have vanished.
Consider the experiences of two workers I initially interviewed for my book Down the Up Escalator: How the 99% Live in the Great Recession and you'll see just how some companies used the recession to accomplish this magician's disappearing trick.
Ina Bromberg genuinely likes to outfit people. Trim and well dressed herself, Ina sells petites at the Madison Avenue flagship store of a designer brand boutique with several hundred outlets. Even I had heard of the label. I had to ask what its exact place in the fashion hierarchy was, though. "We fall into a niche below Barney's-Bergdorf-Chanel," she explained.
In the course of a 20-year career, Ina, now in her sixties, had been the company's top-earning national sales associate more than once. Her loyal clients return each season saying, "You know what I like. What have you got for me?"
When I first met her during the Great Recession, however, her hours had been cut back. "They've moved the entire sales staff onto flexible schedules," she explained. "On Thursday, we are told what our schedule will be for the following week. When they told me my new hours that first week, it was down to ten. I said, ‘Why don't you just lay me off? I can collect unemployment.' And [my boss] said, ‘No, no, it won't be this way every week.'"
"Maybe this is their way of sharing the work in order to keep the experienced people till the recession is over," I suggested. That used to be standard practice during a downturn.
Ina didn't think so. She referred me to an article about her firm on a fashion website. "Read the responses," she said. "These are by people who worked in the office—probably not anymore. They say that in some of the stores they've taken all the full time people and made them part-time. And with that, there's no more sick days, no more vacation days, no more commissions for anyone. They say they're going to do that to all the stores, even New York."
"Do your managers claim that the short hours are just for the recession?" I asked. "Do they thank you for making sacrifices till business picks up?"
"Not that I ever heard," Ina answered. "I think—and I've been saying this for a year and a half—their ultimate goal is to have all part-time sales people working shifts of four-and-a-half hours. That way they're not responsible for lunch, they have a lot of bodies, they pay no commissions, no benefits, and it's a constant turnover. This is what I think they want even after the recession because," here she leaned in as though to reveal a secret, "they haven't stopped hiring people." She checked to see if I grasped the significance of that.
I did and so did her fellow saleswomen, but it's hard to go job-hunting during a recession. While a few of the old professionals had already left, most were holding on, chewing over any bits of information they could pick up that might indicate management's intentions. "In our store we know they've continued the health benefits until March," Ina said. "What will happen after is what we're trying to find out."
Eventually, the company broke the suspense. Managers called the remaining full-timers into the office and gave them two choices. They could take a small severance package and collect unemployment or they could stay at truncated versions of their old jobs if they wished, but as part-timers with no benefits and no commissions. In a way, the company had made government unemployment benefits a part of its buyout package. They were saying, in effect: you go voluntarily and we'll agree that we laid you off.
Four years after the official end of the recession I interviewed Ina again. She was the only one of the former sales staff still working there. Her earnings were less than a quarter of what they'd been a few years earlier.
"I can afford to retire," she assured me. "In a way, I already am. I just like coming out of the house and seeing my regular customers. But everyone who had to support themselves left. All the new people are young," Ina complained. "They have no commitment to the job. They skip days whenever they feel like it.
"But why shouldn't they?" she said suddenly, reversing her judgmental tone. "It used to be if you missed a day, you missed a chance to earn commissions. It mattered. But at nine or ten dollars an hour, if they have something else to do they skip it.
"The job is only worth it if you're a college student and the hours are a perfect fit for your schedule. If that changes the next term, they leave. And it doesn't seem to make a difference to the company. They treat employees like nothing now. I don't mean it has to be a family, but it isn't even a team."
I recently checked her company's website under "careers" and it was true; they were advertising for more than 70 sales assistants for their various North American stores. All but one of the positions was listed as part-time. The sole full time job happened to be in Canada.