Posted by Sir Four at 9:49am Oct 7 '13Stories of companies cutting employee hours to less than 30/week have been hyped in the media, which always left me wondering two things: 1) how big an issue is it really—is the media distorting it by giving lots of coverage to a small number of cases? 2) presumably the employers needed X total hours of employee work in order to function, so how are they going to function on some fraction of that—especially since the hours cut are coming from their most experienced workers?
So I'm still not clear on #1, but this linked story sheds light on #2. The answer is, companies cannot function well by cutting employees' hours to the bone and mistreating their most experienced (the full-timers as opposed to the temps and high school part-timers). Wal-Mart in fact continues a multi-year last-place finish among department and discount stores in the American Customer Satisfaction Index, an annual survey of consumer opinion. It only stands to reason that understaffed stores with low employee morale are going to produce a poorer customer experience than competitors who take a different approach. The linked article cites Costco, "a company that experienced a 19 percent increase in profits in Q2 2013 while paying its employees 40 percent more on average (the average Costco wage is $21.96 per hour) than what a Wal-Mart worker can earn."
So maybe Wal-Mart is starting to get a clue and is reversing the so-called Obamacare job cuts. The timing is very curious to me, though. The announced cuts had seemingly been timed to fuel the media story of Obamacare hurting jobs. Gee I wonder if it was more of a political decision than an economic one? And the cuts are now reversed, now that Obamacare is pretty much guaranteed to survive any last-ditch challenge.