June 26, 2003

You make the most money. Bye.
Posted by jbutler@bostonworks.com">Jason Butler at 9:29 AM -

You can always count on the Journal for jolly trends. Today: well-paid professionals draw unwelcome attention.

[Lay-off victim] Mr. Wood and the others were faulted for nothing. They simply made too much money at a time when the company was desperate to economize. Circuit City then hired about 2,100 lower-paid hourly workers to replace Mr. Wood and the others, who had represented 20% of its sales force.

In doing so, the retailer made an increasingly common cost-saving move: swapping expensive labor with lower-paid workers. The approach, which is generally legal, doesn't eliminate the position but rather the high-paid person in it. The technique is especially attractive to service businesses such as retail. Like so many companies today, they face massive pressure to cut their labor costs. But unlike manufacturers, they have jobs that can't easily be automated or shipped overseas.

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