Vol. 71/No. 18      May 7, 2007

The bosses said they fired the employees—8 percent of the company’s workforce, mostly salespeople—because they were receiving wages “well above the market-based salary range” for their jobs. The replacement workers will be hired at much lower “wage ranges.”

“It had nothing to do with their skills or whether they were a good worker or not,” Bill Cimino, a spokesman for Circuit City, told the press. “It was a function of their salary relative to the market”—that is, they were being paid “too much.”

The company pays store and warehouse workers about $10 to $11 an hour.

Circuit City said the firings and other steps will help boost profits by $110 million this year and $140 million per year after that. The company is also closing seven U.S. stores, a distribution center, and 62 stores in Canada.

The electronics giant, facing competition from Best Buy and other rivals, lost $11.8 million in the fiscal year ending February 28.

“I was a part-time person and only made $10.10 an hour and I still got laid off,” Betty Owen, one of 19 workers fired in El Paso, Texas, told the El Paso Times. Owen, who has extensive technical experience from previous jobs, had been working at Circuit City for three years. She said most workers fired at her store had been with the retailer longer and were receiving higher wages.

Here in New York, a worker at a Manhattan store, speaking on condition of anonymity, told the Militant that several coworkers came in the morning of March 28 and without warning were told they were fired. “I’ve worked for Circuit City for over five years,” he said. “There used to be many people with seniority over me, but now there are very few.”

The New York Times ran an article by business commentator David Leonhardt April 4, headlined “One Safety Net Is Disappearing. What Will Follow?” Echoing an employer argument, he said the Circuit City firings were justified by the “uncomfortable fact” that “most companies are underpaying their younger workers and overpaying their older ones.” He wrote, “A typical worker in his early 60s makes about 50 percent more than a worker in his early 30s” but is “not 50 percent more productive.”

Workers should increasingly expect to see wages tied to “performance” and face cutbacks in employer-based pensions and medical insurance.
 
 
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