retail news in context, analysis with attitude

by Kevin Coupe

Interesting piece in the New York Times this morning about how rank-and-file, often minimum wage Weight Watchers employees, frustrated that they are paid so poorly while the company throws millions of dollars at celebrity endorsers such as Jennifer Hudson and Jessica Simpson, are making their complaints public.

Here's how the Times describes the scenario:

"This frustration reflects a growing discontent among low-wage workers, as seen in the recent protests at dozens of Walmarts, at high-end retailers in Chicago and at fast-food restaurants in New York. Low-wage workers have become more assertive out of dismay that while corporate profits have rebounded to record levels since the recession, wages have floundered.

"Many also feel trapped as the gap between haves and have-nots has widened. Some employees at Weight Watchers expressed irritation at being paid the minimum wage while the company lavishes millions of dollars on celebrities like Jessica Simpson and Jennifer Hudson to advertise its weight-loss program.

"Executives at Weight Watchers say they are paying attention to their employees’ concerns, and have hinted they will increase compensation."

It is a complicated story, owing to Weight Watchers' unique business plan, and you can read the whole thing here. But the basic premise strikes me as similar to a discussion that we've been having here on MNB over the past few weeks - the tendency of some companies and senior executives to create compensation programs that put enormous distance between the folks at headquarters and those on the front lines, a distance that often creates the impression that the folks at the top get all the rewards while the front line personnel take all the hits. (It isn't just an impression. In many cases, it is reality.)

I continue to believe that this is something that businesses need to think about, talk about, and address in a reasonable and sustainable manner.

And the Weight Watchers story is just another illustration of a trend that may be hurting business in the long term.
KC's View: