The Cloud 9 corporate office has told Glenn that he needs to layoff 10% of his staff, but Glenn tries to have Jeff reconsider by inviting him to Cheyenne and Bo’s wedding. He tells Jeff that Cheyenne is severely uneducated, and her job is the only thing standing in the way between her and prostitution. He introduces Jeff to other employees that he notes are right on the poverty line. By having Jeff meet the employees that may be laid off, Glenn is trying to make the opportunity cost more tangible.
Bo wants to make $5,000 and then quit his new job, and he thinks he can do that in a week. When he finds out that it’s going to take significantly longer, he begins complaining about how little the store pays for the work he’s doing. He believes his marginal revenue product is significantly higher, but he doesn’t realize that his marginal impact on revenue is actually quite small. His role at the store could easily be automated.
Glenn has brought all of his previous foster children to the store so that he can get a group photo with all of them. While working in the backroom, Glenn mentions to Cheyenne that his family used to own a photo studio. Cheyenne is surprised that people used to pay to have their picture taken since she has grown up with digital cameras and cell phone cameras. With these inventions, there’s really not a reason to pay to have your photo taken, but Glenn says it was mainly for families and lonely women with dogs.
Someone has been leaving poor reviews of the store on Yelp, and Amy tries to get him to change the ratings. She visits the man at his apartment and learns that the man he recently fired from GameStop. When the man went to see about getting his job back, he finds out he’s been replaced by other workers and he isn’t happy about that.
It’s the holiday season and Cloud 9 needs more help. Labor is a derived demand, which means when customers demand more products, the firm needs more inputs. This temporary employment will also affect the unemployment rate in the local economy. After the holidays are over, many of the new hires will be released.
Jonah is happy that he won the betting pool over which temporary employee would quit first, but it turns out that a lot of these temporary employees are part of a program at Glenn’s church that works with people who have trouble getting jobs. Many of the employees have criminal records or are former drug addicts, and that makes them less likely to be hired without assistance.
Glenn’s family used to own a local hardware store before Cloud 9 entered the market and put them out of business. Cloud 9 was probably able to take advantage of economies of scale and a large distribution network to offer competing products at lower prices. Monopolistic competition in the long run results in zero profits for firms, but if a small company already has relatively little profit before entry, a decrease in demand could result in that particular firm incurring losses and leaving the market. Because Sturgis and Sons specialized in hardware, some of those workers may be structurally unemployed if their skills are no longer needed in the local market. Later in the episode, Glenn finally shares his frustration with Cloud 9 and how they killed his family’s business because of their devotion to profit maximization.
Structural unemployment occurs when the skills and trades are no longer in demand from the general population rather than market fluctuations. Adam’s girlfriend, Amy, quickly points out that his travel agency failed because people use the internet to book travel and no long need travel agents.