How Do They Do It?

Ever wonder how the giant "low cost" leaders manage to keep their prices so low? For one such corporation, Amazon.com, they do it by hiring temp workers! According to an investigative report in The Morning Call,

The supply of temporary workers keeps Amazon's warehouse fully staffed without the expense of a permanent workforce that expects raises and good benefits. Using temporary employees in general also helps reduce the prospect that employees will organize a union that pushes for better treatment because the employees are in constant flux, labor experts say. And Amazon limits its liability for workers' compensation and unemployment insurance because most of the workers don't work for Amazon, they work for the temp agency.

Amazon's priority and key competitive edge is quick delivery of products at low prices. Its Lehigh Valley location on Route 100 near Interstate 78 puts one-third of the population of the U.S. and Canada within a one-day haul. And the weak labor market helps keep employment costs down.

...The situation highlights how companies like Amazon can wield their significant leverage over workers in the bleak job market, labor experts say. Large companies such as Amazon can minimize costs for benefits and raises by relying on temporary workers rather than having a larger permanent workforce, those experts say.

"They can get away with it because most workers will take whatever they can get with jobs few and far between," said Catherine Ruckelshaus, legal co-director of the National Employment Law Project, an advocacy group for low-wage workers. "The temp worker is less likely to complain about it and less likely to push for their labor rights because they feel like they don't have much pull or sway with the worksite employer."

As I have pointed out before, I think a lot of the hand-wringing among the financial elite is mere window dressing. It wouldn't be politically correct to say that they like the state of our economy as it is. So, they make a big public spectacle of being upset, while, in private, they are pleased as punch.

It is a simple fact that high unemployment breeds pliant workers. With good jobs so hard to come by, the currently-employed will accept all sorts of indignities and abuse NOT to be thrown out of work. That means good things (i.e., larger profits) for corporations like Amazon or Wal-Mart!!

It is no wonder that neither the president nor most members of Congress aren't talking about a massive employment program like FDR's WPA. If the federal government put millions of people to work rebuilding this nation's infrastructure, that would put a severe crimp in the pool of the unemployed. With fewer desperate replacements, corporations like Amazon couldn't get away with hiring predominantly temporary workers who receive no benefits and no job security.

So, the next time you hear some captain of industry bemoaning the sad shape our economy is in, please remember that he is most likely lying through his teeth. If he felt he could get away with it with no public recriminations, my guess is that he would say that the state of our economy is right where it should be!!