Labor markets in America continue to become ever more flexible. The electronics retailer Circuit City—second only to Best Buy—has “fired 3,400 of its highest-paid hourly workers and will hire replacements willing to work for less” (Bloomberg). Circuit City felt pressured to cut costs because it has been making losses recently, due to being undercut in flat panel TV sales by Wal-Mart and Target. Workers that were fired made around $19 an hour, with healthcare benefits. Their replacements “will earn less than half that amount, without benefits. The company will graciously allow its allegedly overpaid former workers to reapply for their old jobs at starting wages after they endure 10 weeks of grueling unemployment. Fired Los Angeles worker Richard O’Neal was told he could eventually reapply for his job if he is willing to work for $7.50 per hour, California’s minimum wage.”

The 3,400 fired Circuit City workers are the guinea pigs of the latest experiment in aggressive wage reduction. Corporate America has become impatient with two-tier wages, which reduce the salaries of the newest generations of employees but still allow veteran workers to maintain higher wages until they retire. If Circuit City increases its profits by firing its highest-paid workers, this will become yet the latest corporate trend in slashing working-class living standards. If not, perhaps Wal-Mart’s more subtle method will do. Last summer, Wal-Mart simply stopped granting wage increases for its long-standing employees, sending the clear message that their services are no longer wanted. These days, management prefers a revolving door of “entry-level” workers to a loyal workforce. (Counterpunch)

When will America’s elites realize that unless they drop their neoliberal ways, which prevent unions from resisting pressure from management to keep down wages, America will end up like a third world country, with only a lucky few being able maintain an acceptable standard of living?

(Cross-posted at the European Tribune)