Are we re-entering the era of the "company store"?

In My Humble Opinion
1

I’ve been pondering this, and thought I’d put it to the board. I work for UberMegaCorp and have been noticing a steady rise in the amount of economic activity which I conduct through my company, rather than in the real “external” economy.

The lyrics to the old blues song “Sixteen Tons” have an interesting refrain:
You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me 'cause I can’t go
I owe my soul to the company store

…and I’m having trouble getting this of my head recently.

Over the past few years I’ve begun to notice a steady increase in the number of things I purchase thru my company (and its representatives). So far, it’s been a benevolent relationship, as they are able to negotiate better terms, on average, than I can myself. But the sheer amount of stuff being purchased *through *my company, rather than outside it, is starting to sound a few alarm bells in my cynical noggin. Maybe I’m looking a gift horse in the mouth, but I’m wondering if this is a trend, and whether we’re slowly entering a realm of fragmented small economies headed by corporations. For some reason this worries me.

As an example; Over the past decade, my company has gradually subsumed the outside economy by providing the following:

  1. College tuition. I fill out a few forms online, check arrives, and the monthly payment is deducted from my paycheck.
  2. New cars. They negotiate <something>-plan pricing thru the manufacturer, and I can get cars priced, found, bought, and payment plans all thru the corporate website. Again, it comes out of a payroll deduction.
  3. Entertainment. If I want to see a movie, play, or go to an entertainment venue (Disney, etc.) I simply select the discount from the corp. website, and again, it’s deducted from my check.
  4. Travel. Via the corporate website; I can get anything from airline tickets and hotels to cruises. All conveniently pulled from my paycheck.

They’ve finally started providing medical care onsite, which is wonderful so far. I’m told this is due to the (corporate) realization that employees spend 4-5 hours away from work to travel, check in, wait, get assigned a room, wait again, and finally see a doctor for 4 minutes. They decided to build a doctor’s office in the main building, with a lab and everything. Now, going to the doctor costs me literally 20 minutes of my time, and it’s free. The company was growing weary of paying sick time for employees to sit in waiting rooms, and now have provided us with doctors who can actually read a clock. :slight_smile: Most of the visit and lab work is free, but if there’s a charge it’s [wait for it] deducted from my paycheck.

Forgive me, but I have to wonder where this trend will lead; And at what point people’s pay will cease to cover their purchase obligations.

Has anyone else noticed this trend? Or is it just confined to my company, and I’m getting worked up over what is essentially corporate generosity? Don’t get me wrong, I’m careful and make sure the purchases don’t put us in a bind… but not everyone is good at that.

Thanks in advance for your opinions.

2

The problem with “company stores” is that they were the only game in town and that employees were paid in vouchers redeemable only at the company store. These stores would then charge inflated prices and workers would acquiesce, because otherwise they were just left with bits of paper.

In this arrangement, your compensation is fundamentally in cash, usable anywhere and chances are good that you live somewhere where you can furnish yourself with necessities (and a number of luxuries) without going through your employer.

Your employer offers discounted goods, which you are free to take or leave as you wish. Moreover, these goods are not inflated in price, but, as noted, reduced in price. But that is secondary. What is important is that you can tell your employer, “just give me the cash and I’ll handle my own purchases.” (Incidentally, this usually does not apply to health insurance, which is one reason to call bullshit on the HR practice of counting benefits in “total compensation.”)

Now, there is something unseemly about how easy your employer makes it to blow your paycheck from the convenience of your cubicle. And for the life of me, I don’t understand why your employer wants to be in a side business of furnishing plane tickets and gym memberships and Hondas to its employees. (Well, I suppose it means they are or believe they can turn a profit from this activity, over and above their costs of implementing this system. We’ll see what happens when disputes arise over any of the transactions they’ve brokered.)

3

I’m not sure what you’re talking about. You work for a company that is apparently large enough to provide discounts on various products/services as a perk, and provides various services to you for free. You can certainly purchase any of these products/services on your own without your company’s involvement, and you are not obligated to make any of these purchases through them.

This is very different from a “company store”, where employers paid their employees in an internal currency that could only be spent in the company store.

EDIT: I have to ask, what company is this? I have heard of employee discounts and such before, but never on such a large, integrated scale. If you don’t want to name a specific company, how about just an industry?

If not for your location, I would assume Google.

4

Sounds like a good deal, though the onsite medical would suck for me, I tend to go to some fairly specialized clinics at Yale-New Haven and am very attached to my medical personnel :slight_smile:

5

There’s a good chance your company is literally the only company in the whole world doing this. I have never heard of such a thing. Can you tell us where you work?

6

I’ve worked for a couple large conglomerates with similar benefits.

7

Yipes! I left this entry last night uncompleted (I thought) with the intent of finishing and clarifying it in the morning. Apparently vbullletin or my clumsiness has submitted it as a new thread.

Thank you for your replies, but I need to clarify or at least add the conclusion to the whole thing.

Many of the loans are arranged with retirement funds as collateral, and they become payable in full if you leave the company. This “company store” question arose in my mind because I’m watching a friend who unwisely overused these offers. Due to family reasons he really needs to take a different job and relocate, and told me he can’t leave because he can’t afford to pay off his loans.

I realize this is a far cry from the company stores of the past, but it still brought to mind the line from that song. And I just wondered if this was common.

The reason for including the medical (I didn’t finish all of what I intended to say) was that I was kind or extrapolating into the future. Kind of a rising costs meets easy ability to borrow to pay those costs… where will this lead, etc. I hadn’t really organized my thoughts on that aspect and looking at it “on paper” to see if it made any sense. Not even sure it would’ve made it to the final submit.

I apologize for the incomplete thread being started. Next time I’ll do in Word and paste it later.

But thanks to everyone for at least trying to make sense of my entry. :slight_smile:

Also, the line about car purchases should’ve read that it *can *be arranged to come out of one’s paycheck, but it’s rare. Mostly you have your own external financing; They just help with fleet or x-plan pricing from the manufacturers.

Note to self: Never ever go to bed with an unfinished thread in the computer…

8

It sounds like, then, that your friend took out the loans and dug himself into the hole. It’s more an issue of his money management than the company itself.

It is clearly not a company store, where people were paid in scrip that could only be redeemed at company stores.

9

This sounds like a 401k loan, which have been around for at least 23 years (as in that’s when I first encountered the concept). Every financial advice article I’ve ever read strongly recommends using them ONLY as a last resort, for the very reason that it the loan is called if/when when you leave the company.

BTW, if it a 401k loan, then it’s not a matter that you MUST come up with the loan balance if you leave the company. If you don’t pay back the full balance, what occurs is that the remaining balance is treated as an early distribution - subject to income tax + 10% penalty. So you wind up with a much larger tax bill in the following April.

10

My 200 person pre-IPO software company has a program like that with discounts, offers, deals, special pricing, etc.

11

My wife used to work for a large greeting card company that had, among other interests, a high-end department store directly across the street from headquarters. You could ‘charge’ against your paycheck. She knew people who went on binges and would end up receiving paychecks of basically $0. I’m not sure what would happen if you spent more than your check - I doubt there was any kind of cross-check, so you probably would receive no pay for however many weeks it took to get even.

So, close to the company store - since you could owe them more than your back pay, I imagine.

12

Re-entering the era of the company store? Not even close.

… and to the extent that one might think its a bad thing, I’ll bet that many of those same people are more than happy for the government to get even more directly involved.

13

This is the fundamental difference.

The things the OP is describing are benefits. The point of a company store was a complete monopoly on the workers’ means. In the days when anyone can order something drop shipped within a few days, it’s very unlikely that company stores in the old model will be able to take hold again in the near future.

I imagine that it’s still a potential problem in less mobile/wealthy societies (I don’t know, but would guess that there’s some amount of company-storism around the large factory complexes in poorer countries, for example)

It could still return in wealthy societies if we have further strengthening of corporations and weakening of the state, but I don’t think it would be an extension of the kinds of things the OP is describing. I do think that corporations have been steadily gaining both political and economic power over time, so there is a worrying trend there. But that’s probably a topic for GD.