CircuitCity is Part of a Wider Trend….
Circuit City’s move to bump off its highest paid employees has generated a lot of feedback.
From a macro-economic perspective, Circuit’s move seems to align the company with the prevailing winds. Those winds, however, are blowing straight in the face of average workers. Consider that since about 2000, CEO pay and corporate profits have skyrocketed while average worker wages have grown far more modestly. Indeed, average wage growth, adjusted for inflation, has been modest since the 1970s. (Fair Economy – not an unbiased source by any means – has some interesting charts highlighting the phenomena, as does the Economic Policy Institute. A less alarmist view, here)
So those 3,400 workers forced to reapply for the same job at a lower wage are only a more dramatic example of what’s long been a hot topic among economists: stagnant wages in the midst of a strong economy and tight labor market.