Circuit City: The 1-Year Anniversary Worth Noting

It’s been almost exactly one year since March 28, 2007, the date Circuit City Stores set a new low in corporate morality by laying off 3400 experienced workers whose relatively high salaries – typically, about $15 per hour – allegedly made them a liability. The company’s plan was to hire other new, untrained workers at $10.22 an hour to do the same work, thus saving the company … well, something. Not much, apparently, if you look at the steady decline of the company’s stock price, which has dropped from over $19 per share down to around $4 per share since they implemented this decision.

A year is a long time. After four months of unemployment, according to the Economics Policy Institute, most workers will no longer be covered by their state’s unemployment benefits program. They will have either found a new job, been disqualified for some alleged infraction – such as supposedly having given up looking for work – or will have exhausted the monetary benefits to which they are entitled. After one year, these laid-off Circuit City workers will certainly, in one way or another, have moved on.

That doesn’t mean that everybody who learned of this corporate atrocity has moved on, however, nor that they should. And we don’t mean that that people should still simply be griping about Circuit City’s outrageous conduct, although that’s probably worth doing, too.

Instead, this one-year milestone should lead thinking people to ask themselves one important question, which is: why don’t workers unionize?

After all, if those Circuit City workers had lifted their blinders and formed a union, they could never have been disposed of so casually by their employer. Most likely, they would have had a contract with a just-cause provision guaranteeing their jobs except for misconduct or lack of work. Even if they hadn’t ever obtained a contract, they would have had the money, solidarity and political strength to shut Circuit City down through a strike, picketing, or a boycott, had the idea of replacing them this way even been raised.

One thing is for sure: if those workers had been unionized, this mass layoff would never have happened, no matter how much money the bean-counters might have thought it would save.

The debate over perceived inadequacies of the National Labor Relations Act, such as those which have given rise to the push to adopt federal legislation such as the Employee Free Choice Act, which would make it much easier for workers to unionize, will no doubt continue at all levels of our society.

Wholly aside from that legislative dispute, however, there is one lesson that we can all take from the Circuit City debacle, which is that appealing to the higher moral sense of corporate CEOs is a dead-end street.

The plain truth is no different now than it was at the dawn of the industrial revolution: the only way to stop companies from behaving outrageously towards their workers is worker solidarity and mass action -- in other words, unions. In today’s economy, they’re not only the best answer; they’re the only answer.

If you don’t believe us, ask any laid-off Circuit City worker.