Best Buy’s Big Gamble

Best Buy announced Monday that they would be making changes to their in store compensation for sales associates and effectively halving the income of 8000 employees. This move has drawn comparisons to Circuit City who two years ago made a similar move in firing higher paid sales staff and replacing them with lowered paid employees. That move drew public criticism and resulted in lower sales due to having stores staffed by workers who cared little about customer service anymore. Everyone knows how that story ended of course, two years later and Circuit City is out of business. Someone at Best Buy thought to themselves, “Wow that seems like a really great way to save money!” and so the cycle begins again.

            However I don’t think things are that simple. Apparently everyone thinks that things will just be peachy because of how much the employees like the new CEO. Seriously? I work in retail so I’m no stranger to corporations being completely out of touch with what it’s like to work in a store and what the employees in stores actually care about. But how can they be so naïve as to think that the employees love the CEO, who already makes about 1000 times as much as them, so much that they won’t care that he gave the order to cut their pay in half? If this past election cycle taught us anything it’s that the Democrats did a wonderful job of leveraging the idea of class warfare to get votes and right now is not a good time to be seen as a big CEO that is treading all over the little guy.

            There is of course more going on here however. This is about saving money sure but not in the way that they are describing. This move by Best Buy is being driven by fear that the so-called Employee Free Choice Act might pass. If it does then workers will have a much easier time unionizing. Best Buy knows this and so they have made the decision to cut wages so drastically before the bill passes so that if it does pass, then they will be dealing with union employees starting out from much lower pay scales. The flip side of this of course is that those 8,000 employees are now much more likely to be disgruntled and join a union. The execs at Best Buy must have reasoned it out though and thought that that was an inevitability either way if the Employee Free Choice Act passes.

            If the bill doesn’t pass then Best Buy has saved themselves some money but only time will tell if they suffer the same drop in sales productivity and public backlash that Circuit City encountered.

            For you employees at Best Buy that this has affected please call your Democrat Senators and Representatives and thank them for bowing down to the big union lobbyists and pushing this bill. The Employee Free Choice Act hasn’t even passed yet and it has cost you half of your income.

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