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The Disposable American: Layoffs and Their Consequences Hardcover – March 28, 2006
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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.
In his first book, Uchitelle, an award--winning business reporter for the New York Times, delves into the unspoken consequences of corporate layoffs in America. He shatters the widely held myth that layoffs are ultimately good for the economy; that in America there is always work, and good pay, for the educated and skilled; and that new training creates jobs. Layoffs, which were mostly a blue-collar phenomena in the 1970s and were necessary to combat the influx of cheap competition from Asia, have become a way of life for corporate America and have cut deep into the white-collar workforce, ending job security as we knew it. Entire classes of people are being caught in a new trend of "downward mobility." Uchitelle takes examples from places such as Stanley Tool Works, the largest employer in New Britain, Connecticut, which slashed the workforce and moved operations overseas, and United Airlines, where mechanics receiving premium wages were "outsourced." Emphasizing the hidden psychological toll that layoffs take on the individual, Uchitelle examines the entire issue in a sympathetic yet realistic light. David Siegfried
Copyright © American Library Association. All rights reserved
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The condition on the label says "Used - Good" as opposed to "Very Good", but besides a few price stickers, it looks like this book is brand new. No scratches on the nice hard covers, no bent pages, nothing.
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.
Uchitelle focuses on the area that companies refuse to take accountability, specifically the psychological fallout on employees once they no longer are employees and the broader effect on society as a whole. What I like about his approach is that it is not simply theoretical rhetoric that he espouses but empirical evidence that he presents, both historical and contemporary. In particular, Uchitelle focuses on several corporations in Cincinnati, Indianapolis and New Britain, Conn., interviewing the executives who opted for layoffs while continuing to live in luxury and researching the laid-off workers. What he finds out is that there simply aren't enough well-paying jobs with decent benefits to meet demand. Official statistics on the number of jobless omit the people who through severance packages are bought out but really exiled, as well as those who end up contracting and consequently become free agents who shift from company to company under the dictates of often substandard market rates.
He raises the basic philosophical question that needs to be answered - Will there be a return to post-WWII values when basking from victory, people feel an obligation to take care of one another, or has a new mindset developed which emphasizes the individuality and self-absorption necessary not only to survive but thrive? The latter camp asserts that layoffs will bring about a rejuvenated economy that will ultimately lead to an even stronger era of true equilibrium with a hierarchy based on performance. This line of thinking would make sense if we have a social infrastructure that's supports it but we still live by the rules sets by men dedicated to their companies. Until Uchitelle brought it to light with this book, what remains unspoken is the shift that has occurred in who actually carries the economic burden. It's the worker, not the company. The author has me leaning toward his position, that the rampant income volatility produced by a layoff-happy business culture is creating a society of downwardly mobile, insecure workers. I have been one of them after working in a publicly traded company for a dozen years. This is strongly recommended reading.