A Forbes columnist, Rick Ungar, analyzes the announcement this week by Walmart that it would be moving 35,000 part-time workers to full-time status. They’ll get more hours, but they’ll also qualify for the company’s group health insurance. Take that Obamacare critics, who say it’s a job killer.

The writer is looking well beyond Obamacare to the penny-wise, pound-foolish move to use part-time workers.


In fact, Wal-Mart’s unwillingness to pay most of their workers a livable wage, while avoiding enough full-time employees to properly run a retail outlet, has led to the company placing dead last among department and discount stores in the most recent American Customer Satisfaction Index—a position that should now be all too familiar to the nation’s largest retailer given that Wal-Mart has either held or shared the bottom spot on the index for six years running. … The result? Empty shelves, ridiculously long check-out lines, helpless customers wandering through the electronics section and general disorganization at Wal-Mart store locations.

Others have been down this road.

According to Zeynep Ton, a retail researcher and associate professor of operations management at the MIT Sloan School of Management, in the early 2000s, Home Depot’s CEO, Robert Nardelli, moved to cut full-time staffing levels while increasing part-time employees in an effort to boost profits by trimming the expense that comes with employing full-time workers. It worked for a short while. However, as Ton notes, eventually customer service declined—and with it, customer satisfaction—leading to a severe decline of same-store sales.

And then there’s Costco, whose profit growth has outstripped Walmart despite workers (many of them unionized) paid 40 percent more than a Walmart worker.