The global economy has left more than a few losers in its wake
Unlike puffy hair, broad lapels, and risk-taking Hollywood films, the practice of mass layoffs didn’t die out with so many hallmarks of the late 1970s. In fact, the phenomenon of large corporations radically shrinking their rosters, pension plans, and benefit packages — while often receiving tax breaks and being rewarded by surging stock prices — is received much the same way as a plane crash in Namibia. Or as South Park’s Eric Cartman might say with a shrug, “Yeah, kinda sucks.”
Not so with Louis Uchitelle. The longtime business reporter for The New York Times has written a quiet, thoughtful screed against the layoff phenomenon. The Disposable American is at once a narrative history of American layoffs, with profiles of workers who bear the brunt of this trend and a broader polemic against job cuts and politics that offer no resistance.
Uchitelle quickly strikes down many of the big myths about layoffs: that companies who engage in them will always come out stronger for trimming the fat; that they’re as inevitable as the weather; that bipartisan prescriptions for “re-training” laid-off workers are relevant. He also makes a lot of the psychological damage caused by layoffs — especially, but not exclusively, for male breadwinners who received not merely a paycheck, but an identity from their jobs.
Much of this book brims with a nostalgia for economies of yore. Even during the Great Depression, Uchitelle notes more than once, mass layoffs were not the norm and the Dust Bowl years wound up strengthening job security as a whole after the economy rebounded. Of course, our author is most sentimental for the 1950s and 60s, a period when median incomes increased faster than the previous 50 years. Who can blame him?
Perhaps more interesting than the shift in employer-employee relations is the political consequence. Layoffs were once a stain on a company’s public image, Uchitelle argues, citing, among other examples, the case of a New Hampshire textile plant that threatened to close in 1948. The announcement that 3,000-plus jobs would be lost in Nashua, New Hampshire, triggered hearings in the U.S. Senate. The company quickly reversed its decision. Nowadays, GM announces that it’s phasing out of thousands of high paying jobs, IBM retards its pension plan for new workers, and there’s barely a sustained squawk from the chattering class.
The often-overlooked cities of Indianapolis and New London, Connecticut, feature prominently in Uchitelle’s reporting, with the respective layoff at United Airlines maintenance center and the Stanley Works company (makers of measuring tape and other construction tools). Following workers during several years of the laying off and re-training process, the picture painted is more than a little bleak. Despite state-funded retraining programs with such lofty goals as getting downsized workers re-hired at 90 percent of their previous wages, the reality is grimmer. Most laid-off workers, the author finds, wind up taking a pay cut of 14 percent, even three years later.
While the old refrain went: “It’s the economy, stupid” the new one might just be “It’s the jobs, stupid.” Uchitelle is a bit more judicious than all that, but his numbers add up to a different scenario than those who champion globalization as the ship that lifts all boats. From the spring of 2003 to the spring of 2004, Uchitelle notes, 55 percent of hiring was at wages capping out at $13.25 an hour, which is roughly the poverty-line income for a family of four. According to the Labor Department, between now and 2012, 70 percent of the fastest growing jobs are expected to be in this earning bracket.
There’s many a beef to be picked with The Disposable American. For starters, the economy has been in the global restructuring phase for so long that arguing against layoffs often feels a bit like going point-counterpoint on hurricanes. The container ship has sailed, folks. The idea that domestic manufacturing jobs can be salvaged is tough, but not impossible, to maintain. Uchitelle’s idea that unions should be given a shot at coming up with a counter-proposal for saving money (and their members jobs) in the face of global competition is interesting, if a bit optimistic. On the broader level, the notion that unions might step in on this fight seems tired if only for the fact that they haven’t been effective in stifling the “great sucking sound” for the better part of the last three decades. Why is this possibility suddenly viable? Especially since organized labor is considerably less powerful than in the days of Carter and Reagan. Sadly, Uchitelle never quite explains.
If anything, Uchitelle’s arguments help highlight a number of “inconvenient truths” — to crib from the new Al Gore movie. Not least of which is this: The global economy has created many losers in America. Don’t believe me; swing by Kannapolis, North Carolina, Buffalo, Detroit, or Youngstown, Ohio on your next vacation. Talk to the United Airlines mechanics that’ve taken a cut from $30 an hour to $17.
The end result of this narrative probably won’t be a return to the cushy career jobs known to previous generations. However, if workers have to be more flexible and if cradle-to-the-grave job security is no longer “realistic,” then clearly that big, bad entity government must step in and function: for health insurance, wage insurance for those displaced by globalization, and other programs.
With employer-paid health insurance showing no sign of getting cheaper, and high oil prices pinching the pockets of the working poor, there seems to be no other prescription. Just ask Massachusetts Governor Mitt Romney, who recently passed state legislation mandating health insurance for all workers. He gets it, and it might just make him president.
By John Dicker