Talk about the pen being mightier than the sword! Japan's Toyota Motors (NYSE:TM), beloved of car buyers, auto reviewers, and investors all, absorbed a serious PR broadside (registration required) from the latest in a continuing series on America's "vanishing" middle class, run in Monday's Washington Post (NYSE:WPO).
As you can judge from the topic, the article was not aimed at Toyota per se, but rather at the phenomenon of employers' rising disenchantment with the idea of hiring permanent employees. Nevertheless, while the article also made passing reference to a private auto parts manufacturer and to Toyota competitor Ford (NYSE:F), the balance of the article focused on the plight of two "temporary employees," each of whom have worked at Toyota plants in Kentucky for about four years.
Sound familiar? That's right, folks. It's been a few years now since the phenomenon got a lot of ink in the popular press -- if memory serves, the articles back in the late '90s focused on the dual-class workforces at tech leaders such as Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), where some employees got fat paychecks and stock options while others received $10 an hour and the odd company store discount coupon -- but "perma-temps" are now back in the spotlight.
The perma-temp phenomenon may save corporations money in the short term (on benefits, severance packages, and like expenses), but as an investor, it's also worth considering the side effects. If you've ever worked for a large corporation, you know that you often have two jobs: first, the one they pay you for; and second, a job as "walking human billboard." That's right, I'm talking about the golf shirts, polos, and $5 T-shirts, all emblazoned with the corporate logo and handed out to you gratis, or sold cheap in the company store. The company isn't pushing that apparel on you out of the goodness of its corporate heart, folks -- it wants you to go out, build name recognition, and spread the good word about how wonderful your employer is.
However, the growing phenomenon of creating two classes of workers -- the valued and well-paid full-time employees and the underpaid, benefit-less, and at-risk-of-layoff-on-any-given-day perma-temps -- undermines those goals. Corporations indulge in an exercise of supreme shortsightedness when they treat some employees as "team members" and others as disposable cogs in a corporate machine. Such policies destroy morale. They make loyalty to the employer seem a bad joke. And the inevitable result is that they depress worker productivity. It's only logical to expect that, at some point, the effects of this creeping corporate cancer are going to show up on the practitioners' income statements.
Fool contributor Rich Smith owns no shares in any company mentioned in this article.
