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Lay Off the Layoffs

By John Dicker

The Disposable American

By Louis Uchitelle

Knopf, 226 pages, $25.95

Unlike impossibly bad hair, sprawling lapels, and risk-taking Hollywood films, mass layoffs never quite died with so many late-1970s hallmarks. In fact, the phenomenon of large corporations radically shrinking their rosters while simultaneously being rewarded by surging stock prices is greeted much the same way as a plane crash in Namibia.

As South Park’s Eric Cartman might say with a shrug, “Yeah . . . kinda sucks.”

To Louis Uchitelle, it more than “kinda sucks.” The veteran 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 bearing the brunt of the trend, and a broader polemic against job cuts and the politics that offer them no resistance.

Uchitelle smacks 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 “retraining” the downsized are even relevant.

Uchitelle also makes much of the psychological damage of layoffs—especially, but not exclusively, for male breadwinners who took home not just a paycheck, but an entire identity from their work.

Much of this book brims with a nostalgia for economies of yore. Uchitelle is most sentimental for the 1950s and 1960s, a period when median incomes increased faster than in the previous 50 years. Who can blame him?

Perhaps more interesting than the shift in employer-employee relations is the change in political consequence. Layoffs were once a stain on a company’s public image, Uchitelle argues, evidencing, among other examples, the case of a New Hampshire textile plant that threatened to close in the late 1940s. The announcement that 3,000-plus jobs would be eliminated triggered hearings in the U.S. Senate. The company quickly reversed its decision. Nowadays, GM says it’s phasing out thousands of high-paying jobs and IBM retards its pension plan for new workers, and there’s barely a sustained squawk from the chattering class.

While the old Clintonista refrain went “It’s the economy, stupid,” Uchitelle’s might be “It’s the jobs, stupid.” Actually, he’s a bit more judicious than that, but his numbers add up to a very different scenario than those championing globalization as the ship to lift all boats. From the spring of 2003 to the spring of 2004, Uchitelle notes, 55 percent of the 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, 70 percent of the fastest-growing jobs are expected to be in this earning bracket between now and 2012.

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. Uchitelle’s idea that unions should be given a shot at coming up with counterproposals for keeping manufacturing plants in the U.S. is interesting, if a lot optimistic.

Our author has a faith in organized labor that doesn’t jive with recent history. 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 suddenly viable now, especially since labor is considerably less powerful now than it was 30 years ago?

The end result of this narrative probably won’t be a return to cushy, career jobs known to previous generations. However, if workers have to be more flexible, and if cradle-to-grave job security is no longer “realistic,” then clearly that big, bad entity of government must step in and function: for health insurance, wage insurance for those displaced by globalization, and other (yikes!) social programs.

With employer-paid health insurance showing no sign of getting more affordable, and gas prices pinching the pockets of the working poor, there seems to be no other prescription. Just ask Massachusetts Republican Gov. Mitt Romney, who recently passed legislation mandating health insurance for all workers. He understands the problem, and it might even make him president.

 


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