by Naomi Klein
During the late 1990s, the process of turning the service sector into a low-wage ghetto advanced rapidly in Germany. The German unemployment rate reached 12.6 percent in 1998, primarily because the economy could not absorb the massive layoffs in the manufacturing sector that occurred after reunification —four out of five East German factory jobs were lost. To make up for the shortfall, the service sector was touted by the business press and the political right wing as the economic panacea. There was just one catch: before the mall could step in to save the German economy, the minimum wage would have to be substantially lowered and benefits such as long holidays for all workers would have to be dismantled. In other words, good jobs with security and a living wage would have to be turned into bad jobs. Then Germany too would enjoy the benefits of a service-based economic recovery.
It is one of the paradoxes of service-sector employment that the more prominent a role it plays in the labor landscape, the more casual service-sector companies became in their attitude toward providing job security. Nowhere is this more in evidence than in the industry’s increasing reliance on part-timers. (See Table 10.5, Appendix.) Starbucks, for instance, staffs its outlets almost exclusively with part-timers while only one-third of Kmart’s workforce is full-time. Workers at the ill-fated Montreal-area McDonald’s cited as their principal reason for unionization the fact that they often couldn’t get shifts longer than three hours.
In the U.S. the number of part-timers has tripled since 1968, while in Canada, between 1975 and 1997, the growth rate of part-time jobs was nearly three times the rate of full-time jobs.20 But the problem is not the part-time nature of work per se. In Canada, only one-third of part-timers want but cannot find full-time jobs (which is an increase from one-fifth in the late eighties). In the U.S., only one-quarter want full-time jobs but can’t find them. The vast majority of part-timers are students and women, many of whom are juggling childcare and paid work. (See Table 10.6, Appendix.)
But while many workers are indeed drawn to flexible work arrangements, their definition of what constitutes “flexibility” is dramatically different from the one favored by service-sector bosses. For instance, while studies have shown that working mothers define flexibility as “having the ability to work less than full-time hours at decent wages and benefits, while still working a regular schedule,”21 the service sector has a different view of part-time work, and a different agenda. A handful of brand-name chains, including Starbucks and Borders, bolster low wages by offering health and dental benefits to their part-timers. For other employers, however, part-time positions are used as a loophole to keep wages down and to avoid benefits and overtime; “flexibility” becomes a code for “no promises,” making the juggling of other commitments —both financial and parental — more challenging, not less. At some retail outlets I’ve researched, the allotment of hours is so random that the ritual of posting next week’s schedule prompts the staff to gather around anxiously, craning their necks and hopping up and down as if they are checking to see who got the lead in the high-school musical.
Furthermore, the “part-time” classification is often more a technicality than a reality, with retail employers keeping their part-timers just below the forty-hour legal cutoff for full-time — Laurie Bonang, for instance, clocks between thirty-five and thirty-nine hours a week at Starbucks. For all intents and purposes, she has the duties of a full-time employee, but under forty hours the company does not have to pay overtime or guarantee full-time hours. Other chains are equally creative. Borders instituted a company-wide thirty-seven-and-a-half-hour work week for all employees, and Wal-Mart caps its work week at thirty-three hours, defining base “full time” as twenty-eight hours. What all of this means in the lives of workers is a scheduling roller coaster that in many ways is more demanding than the traditional forty-hour week. For instance, the Gap —which defines full-time as thirty hours a week —has a system of keeping clerks “on call” for certain shifts during which time they aren’t scheduled or paid to work but must be available to come in if the manager calls. (One worker joked to me that she had to buy a beeper in case a folding crisis flared up in Gap Kids.)
Starbucks has been the most innovative in the modern art of supple scheduling. The company has created a software program called Star Labor that allows head office maximum control over the schedules of its clerks down to the minute. With Star Labor, gone is anything as blunt and imprecise as a day or evening shift. The software measures exactly when each latte is sold and by whom, then tailor-makes shifts —often only a few hours long —to maximize coffee-selling efficiency. As Laurie Bonang explains, “They give you an arbitrary skill number from one to nine and they plug in when you’re available, how long you’ve been there, when customers come in and when we need more staff, and the computer spits out your schedule based on that.”22 While Starbucks’ breakthrough in “just-in-time” frothing looks great on a spreadsheet, for Steve Emery it meant hauling himself out of bed to start work at 5 a.m., only to leave at 9:30 a.m. after the morning rush had peaked and, according to Star Labor, he was no longer working at maximum efficiency. Wal-Mart has introduced a similar centralized scheduling system, effectively reducing employee hours by pinning them precisely to instore traffic. “It’s done just like we order merchandise,” says Wal-Mart CEO David Glass.23
The vast gulf between employee and employer definitions of “flexibility” was the central issue of the United Parcel Service strike in the summer of 1997, the largest U.S. job action in fourteen years. Despite profits of $1 billion in 1996, UPS had kept 58 percent of its workers classified as part-time and was rapidly moving toward an even more “flexible” workforce. Of the 43,000 jobs UPS had created since 1992, only 8,000 were full time. The system worked well for the courier company, since it was able to ride the peaks and valleys of the delivery cycle that sees heavy pickups and deliveries in the morning and evening but lulls during the day. “There’s too much downtime in between to hire full-time workers,” explained UPS spokesperson Susan Rosenberg.24
Building up a part-time workforce had other cost-saving benefits. Before the strike, the company paid its part-timers roughly half the hourly wage of its full-timers for performing the same tasks.25 Furthermore, the union claimed that 10,000 of the company’s so-called part-timers were, like Laurie Bonang at Starbucks, actually working between thirty-five and thirty-nine hours a week — just under the cutoff that would require overtime pay, full benefits and the higher wage scale.
Some service-sector companies have made much of the fact that they offer stock options or “profit-sharing” to low-level employees, among them Wal-Mart, which calls its clerks “sales associates;” Borders, which refers to them as “co-owners;” and Starbucks, which prefers the term “partners.” Many employees do appreciate these gestures, but others claim that while the workplace democracy schemes sparkle on a corporate Web site, they rarely translate into much of substance. Most part-time workers at Starbucks, for instance, can’t afford to buy into the employee stock-option program since their salaries barely cover their expenses. And where profit-sharing schemes are automatic, as at Wal-Mart, workers say their “share” of the $118 billion of annual sales their company hauls in is laughable. Clerks in the Windsor, Ontario, outlet of Wal-Mart, for example, say they only saw an extra $70 during the first three years that their store was open. “Never mind that from the viewpoint of the boardroom, the pension plan’s best feature was that it kept 28 million more shares in firm control of company executives,” writes The Wall Street Journal’s Bob Ortega of the Wal-Mart plan. “Most workers perceived that they could cash in, so the cost of the plan paid off in spades by helping keep the unions out and the wages low” (italics his).26
Free Work: More Fake Jobs, Courtesy of the Superbrands
One thing you can say about the retail and service industries: at least they pay their workers a little something for their trouble. Not so for some other industries that have liberated themselves from the chains of social-security for
ms with such free-market gusto that many young workers receive no pay from them at all. Perhaps predictably, the culture industry has led the way in the blossoming of unpaid work, blithely turning a blind eye to the unglamorous fact that many people under thirty are saddled with the mundane responsibility of actually having to support themselves.
Writing about his former job, which involved hiring unpaid interns to send faxes and run errands for Men’s Journal magazine, Jim Frederick notes that many of his applicants had already worked for nothing at Interview, CBS News, MTV, The Village Voice and so on. “‘Very impressive,’ I would say. By my quick calculations they had contributed, conservatively, five or six thousand dollars’ worth of uncompensated work to various media conglomerates.”27 Of course, the media conglomerates —the broadcasters, magazines and book publishers —insist that they are generously offering young people precious experience in a hard employment market —a foot in the door on the old-fashioned “apprenticeship” model. Besides, they say, sounding suspiciously like McDonald’s managers the world over, the interns are just kids —they don’t really need the money.
And getting two “unreal” jobs for the price of one, most interns subsidize their unpaid day job by working in the service industry at night and on weekends, as well as by living at home to a later age. But in the U.S. —where it has become commonplace to hop from one unpaid culture job to the next for a year or two — a disproportionate number of interns, as Frederick observes, appear to be living off trust funds, seemingly without any immediate concerns about earning a living. But just as the service-sector employers will not admit that the youthfulness of their workforce might have something to do with the wages they pay and the security they fail to offer, you will never catch a television network or a publisher confessing that the absence of remuneration for internships might also have something to do with the relative privilege of those applying for these positions at their companies. This racket is not only exploitative in the classic sense, it also has some very real implications for the future of cultural production: today’s interns are tomorrow’s managers, producers and editors and, as Frederick writes, “If you can’t get a job unless you’ve had an internship, and you can’t take an internship unless you can get supported by daddy for a couple of months, then the system guarantees an applicant pool that is decidedly privileged.”28
Music video stations such as MTV have been among the more liberal users of the unpaid internship system. When it was first introduced, the music video channel represented a managerial coup in low-cost, high-profit broadcasting since the stations primarily play videos that are produced out of house and supplied by record labels. While some stations, including Canada’s MuchMusic, now pay licensing and royalty fees to broadcast videos, these pale in comparison to the production costs of the videos in a single Top 30 countdown. Inside the stations, on-air hosts, producers and technicians work alongside unpaid, mostly student, interns who sometimes are rewarded with jobs and sometimes stay at the stations for many months, hoping for their big break. Which is where the legendary success stories come in — the famous veejay who started off answering phones, or the greatest success story of them all: Rick the Temp. In 1996, Rick won the annual “Be a Temp at MuchMusic Contest” and was welcomed to the station with cross-promotional fanfare and branded giveaways. One year later, Rick was on the air in his new job as veejay, but the kicker was that even after he became a big star, he kept the moniker Rick the Temp. There was Rick on TV, interviewing the Backstreet Boys, and although he was always paid for his work, for many would-be interns his success served as a daily advertisement for the glory and glamour that awaits if you donate your labor as a gift to a major media company.
Temps: The Rented Worker
Rick the Temp isn’t just the Great White Hope for unpaid interns. He also represents the pinnacle of another subcategory of New Age workers: the temps. And temps, it must be said, need all the hope they can get. The use of temp labor in the U.S. has increased by 400 percent since 1982 and that growth has been steady.29 Annual industry revenue among American temp firms has increased by about 20 percent every year since 1992, with the firms pulling in revenues of $58.7 billion in 1998.30 The mammoth international temp agency Manpower Temporary Services rivals Wal-Mart as the largest private employer in the U.S.31 According to a 1997 study, 83 percent of the fastest-growing American companies are now outsourcing jobs they once hired people to perform — compared with 64 percent just three years before.32 In Canada, the Association of Canadian Search, Employment & Staffing Services estimates that more than 75 percent of businesses use the services of the $2 billion Canadian temp industry.
These companies all have the formula. They don’t take you on full time. They don’t pay benefits. Then their profits go through the roof.
—Laura Pisciotti, UPS worker, on strike, August 1997
The most dramatic growth, however, is taking place not in North America but in Western Europe, where temp agencies are among Europe’s fastest-growing companies.33 In France, Spain, the Netherlands and Germany, hiring workers on long-term temporary contracts has become a well-trampled back entranceway to the labor market, allowing employers to sidestep tough laws that provide generous employee benefits and make firing without just cause far more difficult than in the United States. France, for instance, has become the second-largest temp-services market after the U.S., making up 30 percent of worldwide temp revenue. And though temping accounts for only 2 percent of all the country’s jobs, according to France’s labor minister, Martine Aubry, “86 per cent of new hires are on short-term contracts.”34 Manpower Europe, an outpost of the U.S.-based temp firm, saw its revenue in Spain jump a staggering 719 percent in just one year, from $6.1 million in 1996 to $50 million in 1997. Italy didn’t legalize temp agencies until 1997, but when it did, Manpower Europe rushed in to open thirty-five offices in 1998.35
Every day, 4.5 million workers are assigned to jobs through temp agencies in Europe and the U.S., but since only 12.5 percent of temps are placed on any given day, the real number of total temporary employees in Europe and the U.S. is closer to 36 million people.36 More significant than soaring numbers, however, is a major shift under way in the nature of the temporary work industry. Temp agencies are no longer strictly in the business of farming out rent-a-receptionists when the secretary calls in sick. For starters, temps are no longer all that temporary: in the U.S., 29 percent stay at the same posting for a year or more.37 Their agencies, meanwhile, have become full-service human resource departments for all your no-commitment staffing needs, including accounting, filing, manufacturing and computer services. And according to Bruce Steinberg, director of research at the U.S.-based National Association of Temporary and Staffing Services, “a quiet evolution is taking place throughout the staffing services industry” —rather than renting out workers, the agencies are “providing a complete service solution.”38 What that means is that more companies are contracting out entire functions and divisions — work previously performed in-house — to outside agencies charged not only with staffing but, like the contract factories in the export processing zones, administration and maintenance of the task as well. For instance, in 1993 American Airlines outsourced the ticket counters at twenty-eight U.S. airports to outside agencies. Around 550 ticketing-agent jobs went temp and, in some cases, workers who had earned $40,000 were offered their same jobs back for $16,000.39 A similar reshuffling took place when UPS decided to turn over its customer-service centers to outside contractors —5,000 employees earning $10 to $12 an hour were replaced with temps earning between $6.50 and $8.40
As Tom Peters says, “You’re a damn fool if you own it!”41 Bruce Steinberg concurs: by amputating whole divisions and sloughing them off on “managed services arrangements, the business can concentrate its time, energy and resources on core business while staffing service practices its core competency of managing workers.”42 Hiring and managing workers, in other words, is not the base of a healthy company but a specialize
d task —somebody else’s “core competency” that is better left to the experts, while the real business is tended to by an ever-shrinking number of workers, as the next chapter will show.
Yes, but … Won’t Bill Gates Save Us?
Any discussion of the plight of corporate temps, UPS couriers, outsourced GM workers, Gap greeters, MTV interns and Starbucks “baristas” leads inevitably to the same place: Yes, but … what about all the great new jobs in the growing high-tech world? For my generation of workers, the legendary riches awaiting technology workers in Seattle and Silicon Valley are the “yes, but” answer to any and all grievances about employment exclusions. Standing in contrast to all the downer stories about layoffs and McJobs is this shimmering digital mecca where fifteen-year-olds design video games for Sega, where AT&T hires hackers just to keep an eye on them and where scores of young workers become millionaires from their lavish stock options. Yes, but … Bill Gates will make it all okay, won’t he?
It was Microsoft, with its famous employee stock-option plan, that developed and fostered the mythology of Silicon Gold, but it is also Microsoft that has done the most to dismantle it. The golden era of the geeks has come and gone, and today’s high-tech jobs are as unstable as any other. Part-timers, temps and contractors are rampant in Silicon Valley —a recent labor study of the region estimates that between 27 and 40 percent of the Valley’s employees are “contingency workers,” and the use of temps there is increasing at twice the rate of the rest of the country. The percentage of Silicon Valley workers employed by temp agencies is nearly three times the national average.43