But Circuit City’s store managers found it hard to stick to the policy. When they were divvying up the yearly pool of raise money, they would often increase the pay of all workers who had done a good job, even those at the range’s ceiling, said Bill Cimino, Circuit City’s chief spokesman. It just seemed like the decent thing to do.

“It’s hard to say no,” Mr. Cimino told me. “It’s only 3 or 4 percent.”

Eventually, though, the company’s executives decided they couldn’t afford decency for decency’s sake. In recent months, there has been a price war over flat-panel televisions that’s an excellent case study of the benefits and drawbacks of globalization. The price cuts have made the televisions, which are manufactured in Asia and Mexico, affordable to many more families, but have also squeezed Circuit City’s margins.

At the same time, the company has to reckon with cut-throat competition from Wal-Mart and Best Buy. Wal-Mart, in fact, has also been taking steps that seem aimed at pushing out more experienced workers, like setting wage caps for certain jobs and requiring people to work nights and weekends. In 2005, a top executive wrote Wal-Mart’s board a memo, which McKinsey & Company helped put together, noting that “the cost of an associate with 7 years of tenure is almost 55 percent more than the cost of an associate with 1 year of tenure, yet there is no difference in his or her productivity.”

There is a real question about whether these chains will hurt themselves in the long run by damaging employee morale, customer service and, ultimately, productivity. (Circuit City is forcing fired workers to wait 10 weeks to reapply for their jobs, I assume because the company executives were afraid that workers whose pay had been cut wouldn’t make effective sales associates.)

But there’s no question that corporate America is moving in the same direction as Circuit City. Companies are wringing out what they see as inefficiencies, like traditional pensions and health insurance coverage, and tying workers’ pay more closely to their performance.

It’s probably not possible to halt these changes. It may not even be desirable. The flexibility of the American labor force seems to be one reason that recessions have become less frequent and unemployment is less of a problem here than in Europe, notes Jason Furman, a leading Democratic economist. In this country, fast-growing companies can hire new workers without worrying that they are making a 30-year commitment.

But it would also be foolish to pretend nothing is changing. The corporate safety net of the 20th century is going away, and a fundamentally different private sector will require a fundamentally different public sector.