Lay-offs have become norm of American working life

May 23 2006 by Nic Paton Print This Article

Americans have accepted corporate layoffs as the norm, in the process creating a society of unstable, temporary workers, a new book has suggested.

The book, The Disposable American: layoffs and their consequences by Louis Uchitelle, has argued that, with more than 30 million full-time workers in the U.S shown the door since the early 1980s, layoffs have become a routine, almost mundane, part of everyday life.

"The drumbeat is nearly constant and affects all sectors: General Motors GM, Hewlett-Packard HPQ and Kraft Foods KFT have all announced huge job cuts in the last year," said news agency Marketwatch in reviewing the publication.

Uchitelle, a reporter for The New York Times, has tracked the progress of people who have been recently fired, showing how the depression and angst that layoffs produce can level a near fatal blow to the psyche.

"The book also points out some obvious villains, such as executives who take home obscene compensation packages even as they slash jobs, and it highlights some not-so-obvious problems, like the ineffectual government efforts to retrain laid-off workers," said MarketWatch.

"But there are problems. Uchitelle tends to lump all layoffs together, failing to differentiate between legitimate competitive practices and corporate heartlessness.

"Market factors are sometimes brushed over in his analysis; instead, layoffs are often blamed on sheer callousness, cruelty or greed," it added.

Uchitelle also attacks former General Electric chief executive Jack Welch for essentially inventing the modern American layoff
Uchitelle also attacks former General Electric chief executive Jack Welch for essentially inventing the modern American layoff through rabid merger-and-acquisition activity. Democrats and Republicans are also lambasted for failing to intervene.

"The book contends that a more active government involvement in the marketplace could go a long way towards remedying the epidemic of American layoffs," said MarketWatch, though adding: "Such an argument may have found a foothold in the 1970s, but it sounds almost quaint in today's regulatory environment."

According to the Bureau of Labor Statistics, between 1981 and 2003, the biennial layoff rate averaged 4.3 per cent.

Uchitelle argues, however, that a more accurate figure may be 7 per cent to 8 per cent.

In the most recent government data, 1.55 million people were let go in January. Moreover, according to outplacement firm Challenger Gray & Christmas, U.S. corporations in March announced at total of 64,975 job cuts.

Uchitelle argues that "the great majority of the nation's employees held long-term jobs as we entered the 1970s," a product of decades of surging growth and efforts by unions and the government to create job stability.

Job security became perilous in the 1970s, the book recalls, highlighting President Reagan's firing of 11,000 air traffic controllers, the tactics of corporate raiders such as Carl Icahn and T. Boone Pickens, and the "greed-is-good ethos" of the era.

In the 1990s, layoffs became commonplace. With the end of the Cold War, companies were freed from the patriotic burden of maintaining job security, as a surge in illegal immigration made low-wage workers expendable and corporate downsizing meant that layoffs inflicted pain on both blue-collar and white-collar workers alike, argued MarketWatch.

President Clinton comes in for criticism too, being charged with "permissiveness" and bringing down the last government barriers to layoffs.

The manufacturing labour force fell to 14.3 million in 2005 from 19.4 million in 1979, the book points out. Steelworker numbers dropped to 180,000 in 1995 from 600,000 in 1972.

"While some of Uchitelle's proposals for government intervention to stem layoffs – massive federal investment and job guarantees reminiscent of the New Deal era – seem politically unrealistic, his proposals for companies hit the right note," said MarketWatch.

"One in particular stands out: a corporate public disclosure system for layoffs – similar to earnings reports – that must be filed annually.

"Such reports would make the public more aware of a company's labor practices, and allow consumers to make a more educated choice about where to spend its money."

Uchitelle also argues that corporations could do a far better and more humane job of alerting workers of impending layoffs, which would enable employees to plan, train and save for their next step.

A federally mandated minimum severance package, like a minimum wage, is also urged.

"More than anything else, though, Uchitelle believes the key to slowing layoffs and softening their impact is organised labour and community organizations, which can bring real bargaining weight to the table," concluded MarketWatch.