Sunday, January 19, 2014

Compassionate Classism and what really killed Borders Books

Mix Sweet Shop
12oz Soy Hot Chocolate
Almond Croissant

You don't have to hate black people to throw around the n-word.  Is it still racist?  Yes, Virginia, it is still racist.  And you don't have to hate poor people to hold on to equally invalid prejudices about wide-spread behaviors that supposedly cause those people to be poor.  That's classism.  And it, too, is incredibly damaging.

I got into a discussion online recently about raising the minimum wage.  Unfortunately, I didn't finish the conversation (I have a bad habit of doing that) with a proper rebuttal, but that does not mean I had nothing to say.  To be fair, this person seemed fairly intelligent and passably compassionate (we didn't have enough time to establish the depths of each others' morality).  But the rhetoric was... how do I put it?


Unexamined, or even passingly examined, it would seem logical to say that if you raise the cost of labor, then businesses will reduce their cost by reducing their labor force.  It would seem compassionate, then, to not raise the cost of labor, to raise the minimum wage, because that would then cause some of those people to lose their jobs or have their hours cut.  That, however, is... well, it's wrong in several ways.

First, people have to stop creating this false separation between "worker" and "customer."  Labor is not a static cost of operating a business.  Workers are participants in the economy, or need to be if we're going to have a democratic economy.  If your employees are not directly shopping at your store, they are funding the people who do shop at your store.  So, if your cost of labor goes up, so does the purchasing power of your customers.  And these are not 1-to-1 cost exchanges.  If minimum wage goes up a whole $1, the cost of a Big Mac will not go up by a dollar, too.  The price may go up a bit, but the cost will be spread out and absorbable for most consumers - especially if those consumers' paychecks have also gone up.

But what about the studies that show unemployment goes up?  Sorry, they don't.  If you've heard that, you have been misinformed, or at least under-informed.  There have been (older) studies that make that conclusion, but studies that control for other factors and compare neighboring states where minimum wage was raised in one but not the other show that unemployment does not, in fact, go up.  Economists still remain divided because some still hold on to the old mythology that somehow "workers" are just numbers on a ledger.  They refuse to see the full balance of the economy, and the damage that underpaid consumers have on the overall health of everyone involved.

And that's the secret of what really killed Borders Books.  Payroll.

I worked for Borders for more than five years, from October 2000 to early 2006.  The common storyline is that e-books killed it.  Not so.  Did they have a major impact?  Of course.  Huge!  And people often forget that Borders also had a substantial music department that was brutalized by the rise of digital music.  So when the Great Recession hit, their fundamental business model had already been greatly shifted by fundamental changes in the market.  But there was already a fatal flaw running throughout the company, and I can say this from experience.

Borders was constantly trying to restructure payroll to make up for lost ground, both real and projected.  It was not the only thing they tried, but from the standpoint of the staff, the assault was vicious.  First, most assistant managers were made supervisors, departments and responsibilities were shuffled.  Then they started going for the way payroll was allotted to each store.  You got so many hours based on things like whether or not you had a second floor, and beyond your starting point, you were then rewarded with hours if you brought your sales up.

That's like telling a runner with cardboard strapped to his feet that he can have a new pair of shoes if he can run faster than the guy already wearing running shoes - the one that has the Nike endorsement.  Wouldn't you think that giving the guy shoes first would give him a better chance of improving his time?

And lest you think that more people on the floor would be excessive, let me give you two examples.  First, not long after I left, Borders was sued by their assistant managers. The AMs said they were being required to work 50 - 60 hours a week because they didn't have enough staff to delegate tasks to.  I spoke to one Human Resources manager after I left who said, "You know how they had cut payroll to the bone?  Now they're digging into the marrow."  The employees won their case.  Borders paid out a settlement... and restructured again.

Second.  There was a little commentary I caught after Borders filed for bankruptcy, that talked about the customer service decline.  Customers at the flagship store in Ann Arbor had commented how they had seen the customer service decline over the years.  As a former Training Supervisor, I can tell you that it wasn't because of Borders' customer service protocol.  They had great standards in the training manuals and videos about how to treat people respectfully, how to suggest without hard-selling, and so on.  They had the right idea.  They just didn't give their own people the ability to provide that kind of service.

How attentive can you be with a customer who stops you as you're barreling toward the massive line at the registers, and the phones are ringing non-stop, and you're under the gun from upper management to finish putting new releases out because that manager is now covering the cafe person's lunch, because the training supervisor was never given enough time to cross-train the new hires?  How am I supposed to recommend another title to that customer when there isn't even enough staff to reshelve the first one after it's been dropped in some obscure corner of the store by another customer?  Sales seep away through a thousand cuts to your customer service... not because your customer service staff wants to be able to pay their rent and - just maybe - buy one of those books on Employee Appreciation Day.

.... So that's where my battery died at the coffeeshop.  It is now 5 minutes till midnight and SNL is on.  And I'll be leaving another conversation unfinished...

Weekend Update is almost on - no time to edit out the snark.  But a good place to kick off a conversation... if you will...

1 comment:

  1. I have nothing to add here. Just wanted to let you know I'm listening… and agree.