Case5Era of the Disposable Worker.docx - Case5:Era of the...

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Case5:Era of the Disposable Worker? Q1:What actions do the companies take to dramatically decrease labor costs so as to increase the profit?Why do you think management would take such actions? The companies use temporary or disposable workers to supersede the original contract workers.Certainly,temporary workers have lower costs rather than contract worker because they cannot obtain any protect by employment contract and contract employee’s benefits;For instance:vacation,serverance,access to employment insurance and retirement benefits etc.The actual situation often results in decreasing the number of workers,lower salary than before and bad working condition etc. Main duty of management is do everything they can cut expenses,usually results in real wage and benefit reductions, and unsafe working conditions . In the case,the main reason is the great global recession.Management cuts the labor expense by using temporary labor to replace contract worker,since temporary workers are higher flexibly,the companies can cut much manpower without provide any legal compensation. I think the main reason of taking such actions is the expense of salaries and wages are part of the largest costs of every company.Hire temporary staffs are more flexible,the company can reduce expenses and costs based on different situations,so that the company can make more profits and increase own revenue.Taking Christmas season as an example,many retail shops hire temporary sales associates.Their working peroid usually just one to two month to help in peak season.Management have to ensure that there are enough manpower in busy season as to save costs after the peroid in order to maximize the profit. Q2:What are the advantages and disadvantages for the management to increase profitability by decreasing labor costs?Do you agree with such management decision?
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