A WSJ article on the changing labor market–"The End of Employees"

No one in the airline industry comes close to Virgin America Inc. on a measurement of efficiency called revenue per employee. That’s because baggage delivery, heavy maintenance, reservations, catering and many other jobs aren’t done by employees. Virgin America uses contractors.

“We will outsource every job that we can that is not customer-facing,” David Cush, the airline’s chief executive, told investors last March. In April, he helped sell Virgin America to Alaska Air Group Inc. for $2.6 billion, more than double its value in late 2014. He left when the takeover was completed in December.

Never before have American companies tried so hard to employ so few people. The outsourcing wave that moved apparel-making jobs to China and call-center operations to India is now just as likely to happen inside companies across the U.S. and in almost every industry.

Read it all.


Posted in * Culture-Watch, * Economics, Politics, Corporations/Corporate Life, Economy, History, Labor/Labor Unions/Labor Market

One comment on “A WSJ article on the changing labor market–"The End of Employees"

  1. BlueOntario says:

    I can’t read behind the paywall, but want to note that this change in how things get done has been the business model of the military and naval forces of the United States since the late 1980s. Training and other specialized services were often provided by civilian experts (usually retired NCOs and officers) during the Cold War, and there have always been some civilian contingents for building and public work-type services as well as yard and depot work. But starting in the late ’80s in reaction to the decrease in manpower due to the end of the draft, many basic functions such as base security and “routine” maintenance of systems (rocket and communications, for example) have been done through contractors.

    How well this works, what it does for preparedness and effectiveness, and whether it saves money have been argued in service journals since then. But, like trying to pin down the actual benefits of BRAC closures and property transfers, real figures and real impacts are unrecognizable in the fog of layers of reports and for whom the reports are meant to serve. In a sad sense, we won’t know what is wrong or broken until we really, really need to rely on some part of the system.