One AugusT afternoon in 2009, 98 housekeepers across three Boston-area Hyatt Hotels were told they no longer had a job. The “Hyatt 100” were replaced by contracted employees who were hired to work through a temp agency for half the pay, without benefits, and with almost twice the workload. Organized protests and calls for reinstatement were supported by unions, religious and other organizations, then-Governor Patrick, and other elected officials. The news spread to other cities leading to multiple canceled events scheduled at Hyatt Hotels in Boston and across the nation.
Hyatt Hotels survived the PR disaster (and eventually agreed to a settlement with the workers), but what happened to the Hyatt 100? We recently interviewed some of them to find out.
We spoke with women who had worked at the hotels for three to 25 years while raising their children. At Hyatt they had average incomes of $17 per hour, good benefits, and were able to pay their bills, build modest savings, help their children with activities and college costs, and even help extended family. They felt financially stable and secure. What did we learn?
Lesson one: This category of job loss needs its own label. “Don’t say I was fired” was a common refrain. They were not “fired” for cause. They were not “laid-off” due to corporate reorganization, downsizing, technology, or a skills mismatch. They were not “dislocated” as a result of international or state-to-state competition, or trade agreements. Perhaps label them as “domestically dislocated,” or refer to those whose jobs have been replaced and downgraded as being “outsourced at home.” This refocuses understanding of the circumstances of unemployment on the choice, rather than the inevitability, of employer decision-making.
Lesson two: The financial costs continue to this day. Some workers could no longer help their aging parents; one said her mother died of grief from the financial strain. A son whispered, so his mother would not hear, that he only ate one meal a day while at college to save money during that time. They depleted cash savings, 401(k) plans, and defaulted on loans, today still managing the effects of damaged credit. Dreams of helping children with higher education were shattered. Working spouses took on extra hours, along with the health consequences of stress. Citing age discrimination, others retired, taking Social Security early. Job loss negatively impacts family and community financial trajectories and opportunities for years.
Lesson three: Domestic outsourcing has long legs. The financial calculus of the impact to the community and state is difficult to reconcile. Despite the economic downturn, other area hotels did not replace their permanent housekeepers. Hyatt’s choice to outsource-at-home made the public sector its default partner. The latter incurred the costs of unemployment insurance, job training, food assistance, social service counseling, health insurance, and the loss of tax dollars from long-term reduced income and consumption by those who were displaced. Domestic dislocation is expensive for the public; it is not just a cost borne by the displaced employees.
Why tell this story now? Increasingly, businesses and the public sector are choosing to domestically outsource their workforce. Outsourcing and contracting work can enable greater flexibility or higher quality service due to the concentration of skill or coordination of activity, but it does not require payment of low wages, few or no benefits, or diminished work quality or conditions. It does not need to deplete family and community wealth. Outsourcing at home with these impacts reflects a failed social and fiscal policy, and the public needs to take note.
Political debates about investing in America and creating new jobs ignore what is happening in our backyards. We can have more jobs, but if they are not jobs that provide families and communities with financial security and stability, then we will not have made progress. The “Hyatt 100” were doing what any society values: They were working hard, supporting their families, paying their fair share, and building opportunity for the next generation.
As we celebrate Labor Day, let’s encourage more discussion about how public policy can insure that the returns to work sustain, build, and strengthen the financial security and stability of individuals, communities, and the state, as well as those who create and sustain employment throughout our Commonwealth.
Janet Boguslaw is senior scientist and Margot Trotter Davis is senior research associate at the Heller School for Social Policy and Management at Brandeis University.