The Disposable American: Layoffs and Their Consequences (Hardcover)

~ (Author)

Editorial Reviews

From Publishers Weekly

Devoting a book to the necessity of preserving jobs is perhaps a futile endeavor in this age of deregulation and outsourcing, but veteran New York Times business reporter Uchitelle manages to make the case that corporate responsibility should entail more than good accounting and that six (going on seven) successive administrations have failed miserably in protecting the American people from greedy executives, manipulative pension fund managers, leveraged buyouts and plain old bad business practices. In the process, he says, we've gone from a world where job security, benevolent interventionism and management/worker loyalty were taken for granted to a dysfunctional, narcissistic and callous incarnation of pre-Keynesian capitalism. The resulting "anxious class" now suffers from a host of frightening ills: downward mobility, loss of self-esteem, transgenerational trauma and income volatility, to name a few. Uchitelle animates his arguments through careful reporting on the plight of laid-off Stanley Works toolmakers and United Airlines mechanics. Descriptions of their difficulties are touching and even tragic; they are also, alas, laborious and repetitive. And Uchitelle's solutions are not entirely convincing: neither forcing companies to abide by a "just cause" clause when they fire someone, for instance, nor doubling the minimum wage are likely to increase employment. Yet Uchitelle's basic argument—that no American government has taken significant steps to curb "the unwinding of social value" caused by corporate greed— is all too accurate. (Mar. 31)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From The Washington Post

In 1997, the board of directors of the Stanley Works, a Connecticut tool company, lured its new chief executive, John M. Trani, away from General Electric with a compensation package that was two or three times those given to any of his predecessors since its founding in 1873. Like many of his peers at other U.S. companies at the time, Trani closed plants, cut costs, downsized and outsourced the company's operations. Six years later, 5,500 Stanley employees had lost their jobs.

This story is one of several that Louis Uchitelle, a New York Times economics reporter, uses to argue that there is something fundamentally wrong with the tolerance that this country has developed for large-scale layoffs. His The Disposable American is a nostalgic, anxious book. Uchitelle writes longingly about a time when corporate layoffs were seen as a stain on a company's reputation and when job security was a reasonable expectation -- a time when the worries of American workers had nothing to do with the vagaries of a globalized economy or the outsourcing of jobs to India or China. The author often relies on an idealized view of the employment practices of the past to sharpen the contrast with the more volatile and insecure present. Still, despite the book's occasional exaggerations ("a layoff is an emotional blow from which very few fully recover"), it is impossible not to be touched by Uchitelle's many real-life tales of sacked workers who, through no fault of their own, were thrown into an economic and psychological maelstrom with weak or nonexistent safety nets to help them and their families.

The problems Uchitelle highlights are important, and some of the solutions he proposes make sense. It is clearly wrong, for example, to give huge tax breaks to the wealthy when working families must struggle with limited health insurance or none at all. Cutting outrageous corporate-welfare programs and using the savings to improve health and education for workers is also an unassailable proposal. Unfortunately, not all of Uchitelle's prescriptions are so easy to defend. Government regulations that would make it costlier for employers to fire workers, for example, are good news for the workers who already have jobs but hurt those who are unemployed and looking for work because higher firing costs reduce companies' propensity to hire.

The Disposable American is too often silent on what could be done to avoid the well-known downsides of the policies it champions. Though Uchitelle knows better than to hold Europe up as a model, many of the policies he favors have a strong European flavor -- even though the usual European cocktail of welfare and labor conditions contributes to chronically high unemployment, sluggish economic growth, unfunded public programs and low productivity. Moreover, Europe's rigid labor markets especially penalize the poor, the unemployed and the unskilled, favoring instead a "labor oligarchy" of securely employed workers already ensconced in jobs. The above-average unemployment rates among Europe's youth and its impoverished immigrants are a factor behind the rising criminality, rioting and social turmoil that disproportionately afflict these groups.

It is also surprising that Uchitelle, who in his day job reports on the U.S. economy, could write a book so neglectful of America's distinct advantages. Although massive layoffs have important economic and social costs, the relative ease with which U.S. companies can trim their payrolls to adapt to changing conditions also has benefits. Millions of jobs regularly disappear from the U.S. economy, but with equal regularity, millions more are created. Indeed, no other industrialized country systematically creates as many jobs as the United States. The problem is that while the job losses resulting from plant closings and downsizing are highly concentrated in time, location and industry, the new jobs appear broadly dispersed throughout the nation, over different sectors and over time.

True, workers who lose jobs often must accept new ones at lower salaries; true, all of that is traumatic and undesirable. But the fact remains that, between 1980 and 2002, the U.S. population grew 23.9 percent -- and the number of jobs increased by 37.4 percent. And the painful private-sector restructuring that has taken place in the United States since the mid-1990s, like the one epitomized by the Stanley Works vignette, has created stronger companies that are the backbone of one of the world's most prosperous, competitive economies -- one that continues to create jobs while all other industrialized economies are growing too slowly or stagnating. Last February, for example, New York Times readers learned that, "in one of the strongest job reports since the start of the recovery in late 2001, the government reported yesterday that the unemployment rate fell to 4.7 percent, its lowest in more than four years. The nation's employers hired workers in nearly every industry." The author of the article? The same Louis Uchitelle who in The Disposable American claims that labor conditions in the United States are a "festering national crisis."

The Uchitelle who wrote this passionate but flawed book would correctly insist that we should be alarmed about the poor quality of the jobs being created, rather than being mollified by their quantity. Unfortunately, his compassionate desire to improve the quality of American jobs makes him too eager to experiment with policies that in the long run are known to hurt those whom he seeks to help.

Reviewed by Moisés Naím
Copyright 2006, The Washington Post. All Rights Reserved.

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Product Details

• Hardcover: 304 pages
• Publisher: Knopf (March 28, 2006)
• Language: English
• ISBN-10: 1400041171
• ISBN-13: 978-1400041176
• Product Dimensions: 9.3 x 6.5 x 1.2 inches
• Shipping Weight: 1.4 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (34 customer reviews)
• Amazon.com Sales Rank: #492,060 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

68 of 70 people found the following review helpful:

4.0 out of 5 stars Impending Third Worldization of America?, April 6, 2006

By	J. Grattan "book reviewer" (Lawrenceville, GA USA) - See all my reviews (TOP 500 REVIEWER)    (REAL NAME)

The essential point of THE DISPOSABLE AMERICAN is that layoffs, or involuntary separations, have become commonplace as a company strategy to enhance the bottom-line with profound consequences to not only the laid-off employees, but to many other parties, including family, community, and the company itself. Three main "myths" are promulgated concerning layoffs: (1) the flood of layoffs over the last twenty years is not indicative of a foreseeable, long-term trend to instability in employment; (2) laid-off workers have lost value and must correct that through training and education, and failure to do so is confirmation of personal shortcomings; and (3) layoffs are no more than issues of cost savings and wages lost with human concerns being irrelevant. These myths capture the stance that corporations and governmental agencies, employment consultants, and the mainstream media typically take regarding layoffs.

But the author rejects those simplistic and convenient myths. He contends that this multi-decade trend of layoffs is a decided break from the employer-employee rapport that existed for the seventy years before the 1970s. Companies are now mostly not restrained by strong unions. Employment-at-will has become the operative policy in lieu of the restrictions found in bargaining agreements that require "just cause" for layoffs. In other words, companies layoff arbitrarily because they can get away with it.

The author is especially concerned about the psychological devastation that often accompanies layoffs that is unacknowledged in official statistics. It is not unknown that individuals' self-esteem is largely tied to their jobs. Yet employers, who at one time regarded themselves as a part of communities, seem ever more willing to force communities and families to be the sole shock absorber for the damage of their actions. The author profiles several people in their attempts to get back on their feet: several aircraft mechanics and a variety of white-collar workers, though many of them did have substantial resources to weather unemployment.

There is considerable evidence that layoffs may produce short-term results, generally via increased stock prices. But companies can lose critical skills in layoffs, perhaps not realized, in addition to overburdening remaining employees. Layoff artists can often be gone before the full impact of their gutting becomes evident.

The most cynical myth is that education and training will result in getting better jobs after being laid off. The first problems are identifying viable fields, finding appropriate training, and being financially supported during training periods. However, the vast majority of projected jobs into the 21st century will require little more than a high school diploma. Even though the myth persists, funding for re-training is so miniscule as to be virtually non-existent. It is easier to hold that the unemployed have simply failed to apply themselves than to seriously examine the validity of the existence of jobs for so-called "symbolic analysts." The reality is that most of those who find work after being laid off are underemployed and paid substantially less.

The author is surely correct to call for communities to band together to slow down corporate layoffs and to require humane and realistic dealings with those laid off. Requiring annual certified reports by corporations detailing involuntary separations would give unwelcome exposure. Among other suggestions: labor law reform, mandatory severance pay, fair trade policies, and retraining options. In addition, the author wants the huge tax hit that states take in bidding for company relocations to be stopped. Obviously, those funds would go a long way in rebuilding infrastructure and easing the pain of unavoidable layoffs.

The book is an even-handed look at the phenomenon of layoffs in the US. The author seems to view the economic culture of the US more benignly than some might. Many view the relatively harmonious thirty years after WWII as an aberration in the generally contentious relations between employers and employees that has existed since the rise of industrialization. Yet layoffs in the context of globalization are new. The author offers his suggestions with little commentary on their feasibility. Giving the current political climate, it really seems quite likely that the situation will become far worse, literally transforming America into a Third World country of have and have-nots.

28 of 30 people found the following review helpful:

5.0 out of 5 stars Excellent analysis of the true costs of layoffs to workers and society as a whole., May 12, 2006

By	Groovy Vegan (USA) - See all my reviews (TOP 1000 REVIEWER)    (COMMUNITY FORUM 04)

According to the "Who Moved My Cheese" myth and popular American groupthink, if you become involuntarily separated from your job, there's something kind of wrong with you, or at least your portfolio of skills and/or attitude. You're supposed to buck up, improve your education and attitude, bust your butt looking for a job, and by golly there will be one for you, at approximately your old salary if not a higher wage. This is one of three major myths journalist Louis Uchitelle does a spectacular job debunking through via in depth interviews with laid off workers, CEOs,headhunters and others; labor statistics, and an investigation into the history of the American work force, unions and labor laws.

The other two major myths are:

1. "Payoff" That in exchange for the approximately 30 million full-time workers who lost their jobs since the early 1980s, "a revitalized corporate America will emerge, once again offering job security, full employment, and rising incomes."

2. The dollar and cents savings in labor costs justifies the layoffs.

Rather than recapping Uchitelle's arguments, I refer you to the book which commendably argues all these points, and brings to life the employment situations of blue collar and white collar workers from all walks of life. One chapter that epitomizes our economy is chapter 3, "Retraining the Mechanics -- But for What?" Here we meet a conference room full of United Airlines mechanics, mostly family men in their 30s and 40s, typically making at least $25 an hour who are about to be laid off. They're cheerfully given post-layoff survival instructions including how to deal with creditors, collect unemployment, and retrain for other jobs.

By the spring of 2004, of more than 800 United mechanics who had gone through this program (one of the best-funded in the country), only 185 were working again. Of these 185, only 15 (8%) regained or exceed their United wage, primarily young beginning mechanics who were making $19 to $20 an hour. The majority earned $14 to $20 in a variety of jobs including auto repair, repairing heating and air-conditioning units, computer maintenance, conducting freight trains or long distance truck driving. Eighteen percent earned less than $13.25 an hour (poverty level for a family a four), in jobs including warehouse or restaurant work, or retailing.

In addition to the financial and psychological losses suffered by these men and their families, members of the flying public may be at increased safety risk as airplane maintenance is outsourced to less skilled workers at lower wages or offshore with less oversight by the FAA, especially in light of recent wage freezes for air traffic controllers. I add these examples to the many examples Uchitelle provides of the society-wide ramifications of layoffs.

The layoffs are not limited to blue collar workers. Among others we meet a former bank vice president who resorted to pumping gas to make ends meet, before he could find a more stable job in tourism which paid significantly less than his bank job.

Simply put, "there are not enough good jobs for the college educated, and neither the private sector nor government offers much help." And the ramifications for those trying to move out of the working poor are enormous given the increasing cost of a college education, plus the fact that one's chances of finding and keeping middleclass paying jobs for the college educated keep decreasing.

I highly recommend this book, which significantly increased my understanding of the changes in the American labor market since the 1800s and how layoffs are counterproductive not only for the laid off workers, but for the company's long term bottom line and society as a whole. Although the book is a bit dry in the spots where Uchitelle reviews labor law, overall the book is a very interesting read, particularly the highly descriptive interviews with laid off workers.

17 of 17 people found the following review helpful:

5.0 out of 5 stars Uchitelle is Empathic and on the Mark, April 9, 2006

By	Elizabeth Zinner (Maryland, USA) - See all my reviews (REAL NAME)

The Disposable American is passionately written and and a must read. Uchitelle skillfully debunks a long-cherished American belief that if you work hard, and are educated, you will have job security and/or ease in finding comparable work with another company. The Disposable American addresses the economic challenges layoffs cause for the middle class just as Ehrenreich's book, Nickel and Dimed, addressed those trying to survive in this country while working at minimum wage. Uchitelle makes his points about layoffs by getting close to his subjects and empathically describing their challenges.
The book addresses the negative impact that layoffs have on the financial and psychological structure of the family. This vulnerability adversely affects the community, and increasingly , the economic security of the middle class throughout this country.
Highly recommended!