Worker pay is frightful, but profits are delightful

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The holiday rush is upon us -- hours of operations have been expanded and seasonal workers have been hired. Retailers are doing their best to accommodate shopper’s schedules, but does this convenience come at a cost?

Leading the charge in customer convenience is Wal-Mart. Some Canadian stores will stay open 24 hours a day from December 20 until they close on Christmas Eve.

Boom for retailers, bust for employees

While an expanded holiday schedule offers ease of shopping for consumers and increases revenue for businesses, it also places untold demands on employees, forcing them to work odd and additional hours, without sharing in the spike in earnings.

As a seasonal worker, who asked to remain anonymous, said, "on Black Friday I was the top seller in my store. This was satisfying. But then when I started to think about it, after taxes that exhausting nine hour shift will only amount to 80 bucks."

There is no doubt that the holiday season is a boon for retailers.

According to Collier’s 2012 retail real estate report, approximately 15 per cent of yearly sales of electronics, appliances, sporting goods, clothing, music and books occur in December. This means that retailers make twice as much in December than they do in an average month.

Due to this significant upturn in profits, retailers can compensate for poor sales in previous months by doubling their revenue with few additional costs. Yes, they may be on the hook for the wages of a couple extra employees, but for the most part their revenue augments while costs stay relatively static.

On the other hand, employees do not enjoy a higher rate of return on their input. They receive the same wage and thus the only way to earn more and make up for thinner months is to work more hours.

At first glance this may seem legitimate: owners assume greater risks -- some are leveraged with large debts to fund their store -- and should be entitled to greater rewards. But this doesn’t mean they deserve 100 per cent of the higher return.

Retailers can get away with not offering commission or bonuses because in many cases workers are motivated by the struggle to subsist. There is no need to provide additional incentive. Growing income inequality and high unemployment translates into labour surpluses that diminish worker bargaining power.

As the wages of the lowest 20 per cent stagnate, these workers become more vulnerable to unfair work conditions; in many cases they work to meet basic needs, not for disposable income, and therefore can’t be picky.

Anne Golden, distinguished visiting professor at Ryerson, emphasizes the impact inequality has on the lowest quintile: "The top 1% of Canadians took home a third of all income growth from 1998 to 2007. The average income of the poorest quintile, after accounting for inflation, taxes and transfers, grew by just $2100. The real incomes of the top quintile grew by 13 times as much!"

Precarious work is a symptom of Harper's Canadian economy

Conventional wisdom suggests that increased sales translate into economic growth, which, through a trickle down of profits, is good for everyone, including workers. So, the thinking goes, workers should be happy that employment is available, especially in hard times. And these are still hard times.

Although the Harper government recently declared that the Canadian economy has created one million jobs since the economic low point in 2009, a Behind the Numbers report by the Centre for Policy Alternatives indicates that when factors such as a growing labour market are taken into account, the correct figure is a net loss of 280,000 jobs.

Given this dearth of jobs many seasonal workers welcome the opportunity to make money, even if they are forced to work overtime and on call hours. For some, the prospect of staying on after the holiday rush, however remote that possibility may be, is often enough of a carrot to entice them to work long low paid hours instead of spending time with friends and family.

But this a mechanistic analysis that implies a lack of worker commitment to quality; the fact is many workers, especially seasonal workers, are intrinsically motivated to do good work. Retailers exploit their commitment and work ethic, leaving workers with inadequate and unequal remuneration.

So, retailers double their rate of return, while barely increasing costs, and worker’s wages stay the same, despite the stress of working extra days and extended hours that cause them to potentially miss out on personal and social events. In this light, holiday shopping is a mechanism for increasing the wealth of storeowners, while keeping workers tethered. It is not only a symptom of mounting inequality; it is also a driving force.

Home for the holidays or working for the Man?

Whether or not we acknowledge it, holiday shopping stratifies our society. Which begs the question: why do some people get to participate in the holiday season while others are forced to stand behind a cash register, watching from the sidelines?

Ads featuring loving exchanges between family members, friends and colleagues help drive the sentimental ethos underpinning many holiday marketing campaigns. It’s not a secret that products are packaged as a means to facilitate and even replace affectionate interactions.

In many circles these gifts are the cost of admission for participating in cultural rituals, yet the people -- the workers -- who help us choose these gifts are often unable to afford them. By placing consumption at the centre of important cultural events, the impacts of inequality are exacerbated.

Consumerism has become so ubiquitous it’s hard to draw boundaries to ward off its encroachment on integral social values such as equality and human rights. The push to increase work hours and concentrate consumption in a holiday rush mostly benefits the wealthy, which make this time of year a potential leverage point for change. If there can be push back against these practices now, at peak revenue season, the impact may be more pronounced.

But it’s not as simple as reducing consumption. The reality is people still need work, and due to seasonal hiring practices, workers will shoulder the brunt of the impact of reduced revenues, by suffering through joblessness or underemployment.

This is the crux of the holiday consumption problem. Major retailers, like Wal-Mart, do whatever necessay to increase market share, and workers in need of employment sacrifice job stability and personal autonomy without sharing in the upsurge of profits.

It’s a complex issue, one that demands sober reflection and calls for a reassessment of our priorities. There is no easy solution, but the worker quoted above might have been on the right track when he said "I like to make people smile, to let them know that I’m there to help them, not just for the money."

The key, it seems, is to focus on people first, finances second. The tricky part is making that shift in focus happen.

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Fraser McDonald is a freelance writer of both fiction and non-fiction, focusing primarily on social and personal change.

Photo: flickr/Shaheen Karolia

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