As the World Churns

The Disposable American:Layoffs and Their Consequences

The Disposable American by Louis Uchitelle shows that layoffs have affected the U.S. work force in much the same way that arsenic poisons victims. The impact is incremental. Cumulative. First comes debilitation, then nausea, feeble-mindedness, paralysis, and death. The worsening condition occurs gradually, so that by the time the sufferer realizes something is wrong, it is too late to do anything about it.

That is exactly the way in which the American labor movement has weakened. The application of the layoff as a legitimate management tool has taken place with increasing scope over 30 years, systematically and unilaterally. Neither the unions nor the government has administered an effective antidote. In the process, we have all acquired a savvy new vocabulary to describe the affliction—downsizing, right-sizing, outsourcing, and offshoring. The Disposable American by New York Times economics writer Uchitelle adds more familiar terms to the layoff lexicon: depression and poverty.

Uchitelle points out that there was a quaint era long ago when, for example, humans answered phones and Congress seriously debated legislation such as the Humphrey-Hawkins Full Employment bill. A time, in other words, when unions had the political power to oblige the government to intervene in the economy, from time to time, in ways that favored employment security and decent wages for U.S. workers, instead of promoting mergers and acquisitions for U.S. corporations.

The Disposable Americans book jacket

During this enchanted epoch in American history, the layoff was rare. When a company suffered a demand slump, workers were furloughed—for weeks, perhaps, or even months—and then called back when factory orders rose again. That was bad enough. Still, Uchitelle reminds us, certain niceties were observed. A full-time worker at minimum wage could maintain a family of four above the poverty line. When strikes occurred, companies were bound by protocol not to fire strikers and hire replacements. Collective bargaining prevailed in manufacturing, and the U.S. Department of Labor represented the interests of workers and unions, at least part of the time.

The 1980s brought Ronald Reagan and his entourage to the presidency, however, and they in turn brought us deregulation on the one hand and mass dismissal on the other. It was around this time that the American worker became “disposable.” It is true that American workers had been disposable before: throughout the 19th century and into the Great Depression. But the disposability of the 1980s was different:

What has been happening since the late 1970s, on the other hand, is a long and dismaying fall back to the early days of the twentieth century, and the tragedy is that people know what they are losing and that the loss damages them.

In the 1980s, factories did not simply suspend certain production lines, they closed down. Economic depression rolled over the Northeast and the Midwest. Steel moved from Ohio to Mexico and Brazil. Shoes went from Maine to Jamaica, and electronics from California to Peru. Since then, everything has gone from wherever it went first to China. The Disposable American chronicles the spreading reach of the layoff, from low-skilled to skilled workers, from blue-collar to white-collar, from manufacturing to services.

The creeping poison of mass dismissal takes various forms, many of them invisible: the buyout and early retirement. Attrition, hastened along by lack of investment. The not-so-subtle kick in the ass with a goodbye package of measly unemployment benefits and a couple of coupons for computer classes. Because many layoffs occur without formally declared symptoms, the official figures from the Bureau of Labor Statistics dramatically understate the extent of the damage.

This book delivers a healthy correction to the shameless myth-making that has accompanied the destruction of U.S. labor and unions through layoffs. The perky cheerleading for globalization manifest in Thomas Friedman’s The World is Flat is the most current example of this endless stream of drivel, generated to convince the laid off, the redundant, the summarily retired, and the 45-year-old trainee that “job churning” is good for the economy and for us all.

This is an unfortunate phrase, isn’t it? Churning. It has connotations of nausea, a queasiness that “globalization” really ought to inspire. The very word—”globalization”—is mythical, suggesting that this development has come from everywhere and therefore from nowhere at all. It fell from the sky, inflicted on us by God and by markets.

Because of globalization, U.S. corporations must become more “competitive.” They do this by firing people. Whether the term used is “restructuring” “reorganizing” or TQM-ing (Total Quality Management), the end result is the firing of people, presumably to compete with other people who will also, in all likelihood, soon be churned. Seldom do we ask our political leaders and our CEOs who the hell we’re competing with. Who are the market forces pushing this relentless drive toward competitiveness, i.e., higher and higher profits, lower and lower wages? If we did ask, we would find out that American workers have become disposable because American corporations have made them so. Not Japanese, European or Chinese companies. Companies based in Europe and Japan are bound by much stricter labor laws and customs than their American counterparts. In April, after the French government proposed legislation making it easier to fire young workers, the French unions and their allies virtually shut down the country, and the proposal died. In Japan last year, a proposal from U.S. analysts to restructure Sony Corp. by closing factories met resistance from Japanese analysts, who proposed growing the company instead. They considered the morale of the Sony work force to be too fragile to start firing workers.

It is U.S. corporations that drive the savage globalization that has made the American worker uniquely disposable. U.S. corporations pushed hardest for the entrance of China into the World Trade Organization so that they could exploit the cheapest labor in the world under predictable and enforceable rules. U.S. corporations lead the way in projected foreign direct investment in China. The U.S. trade deficit rose to $63.8 billion in May. At current rates, this year’s deficit will hit $763 billion, up 6.5 percent over 2005, because U.S. corporations have gone abroad to produce.

This is the other side of the story. In The Disposable American, Uchitelle not only documents the destruction of the American labor movement and the American worker since the 1970s. He also, indirectly, tells the story of U.S. corporate management: its relentlessness, and in many cases, its cruelty. The Jack Welches, who visited “efficiency” on their employees but thought themselves entitled to lives of wretched excess; the Mike Milkens, who couldn’t distinguish between venture capital and grand larceny. “Chain Saw” Al Dunlap of Sunbeam Corp. (whose touching memoir is titled Mean Business) and Robert Allen of AT&T Inc., whom Uchitelle quotes asking a journalist during an interview about the layoff of lifetime AT&T employees, “What do you want me to do, go on television and cry?”

Well, yes, because this is really sad. The layoff is the consequence of labor’s lack of power in government and the corporation’s skill in public relations. As corporate interests took over the government from Reagan to Bush to Clinton to Bush, they perpetrated two corresponding but equally transparent deceptions: that the drive for competitiveness came from somewhere outside this country that “we” did not control; and that competitiveness was good for us.

But “we” did control ruthless and ruinous competition for a very long time through regulation and tax policy. This was possible because the most vicious competitors in the world are right here in the United States. Nike Inc., for example, is a competitive U.S. corporation with 245 factories in China, Hong Kong, Thailand, and Indonesia. Since Reagan, the government has subsidized these competitors rather than stopping them. One of the best chapters in this book is “A Green Light from Clinton.” President Clinton, whom U.S. labor helped to elect, pushed through the North American Free Trade Agreement without incorporating labor standards. The agreement opened U.S. markets to goods imported from Mexico without addressing the difference in wages between the two countries. In the United States, the minimum wage is $5.15 an hour; in Mexico it’s less than $4 a day. U.S. manufacturing capital fled to Mexico in 1995; the Economic Policy Institute estimates that this single agreement cost the U.S. more than a million jobs. “[Clinton] also abandoned a campaign promise to stop corporations from hiring permanent replacements for workers on strike, so they could lay off strikers.” Clinton and his people talked of more humane layoffs rather than no layoffs. Under Clinton, we all became familiar with the “socially responsible corporation.” These were companies that provided child care and mental health counseling to former employees now transmogrified into enterprising new job seekers and self-employed subcontractors relieved of their sick leave, medical insurance and pensions. Some especially caring firms provided coaching in resume building and interviewing.

Contrary to what John Kenneth Galbraith told us (may he rest in peace), there is no countervailing force left in America to curtail the savage globalization of U.S. corporations. With sickening irony, the AFL-CIO itself laid off over 160 of its staff members in May 2005.

Somehow, somewhere, resistance has got to organize. But so far there is no sign of it. On June 8, the United Automobile Workers agreed to buyouts from General Motors Corp. for all of its 24,000 workers at an auto parts supplier. Two months earlier, GM had offered buyouts ranging from $35,000 to $140,000 to all of its 113,000 hourly workers. It’s better than nothing, but even if you got the $140,000, you would have just about enough to put one-and-a-half kids through a private college before you would be broke. And you’re never going to make what you made at GM again. The now disposable American must confront the fact that:

Most of the unfilled jobs pay low wages and require relatively low skill, often less than the jobholder has. … Seven of the ten occupations expected to grow fastest from 2002 through 2012, according to the Labor Department are in the below $13.25-an-hour category.

A hefty percentage of the high-skilled union workers interviewed by Uchitelle after their layoffs wound up “throwing boxes” for United Parcel Service Inc. for about $13 an hour. Or they wound up in other jobs at comparable low-skill and low-pay levels. Education and training are not the antidote because the high-skill, high-wage jobs just aren’t here. They’re gone. U.S. corporations exported them to low-wage countries, and the U.S. government helped them do it.

Tax policies encourage foreign rather than domestic investment, so corporations benefit from exploiting workers in low-wage countries while paying lower taxes on their investment abroad. Trade policies allow the import of goods with minimal customs duties. No import restrictions are placed on goods produced by child labor or forced labor. In short, globalization is not a phenomenon that happened “out there,” forcing U.S. companies to compete reluctantly by cutting jobs and wages. U.S. corporations took over the U.S. government, worked tax and trade policies to their own advantage, and suckered us all into accepting their invented version of the inevitable.

Maybe it’s not too late quite yet. It is true that we have swallowed the poison of the layoff, and we’ve been through the debilitation and the nausea. But if we’re not yet too feeble-minded, we could still fight the paralysis.

A native of Houston, Beatrice Edwards now lives in Washington, D.C.


Waging A Living, a documentary by Roger Weisberg for the PBS series P.O.V. (Point of View), tells the tale of four low-wage service workers in the Northeast and California struggling to make each paycheck last until the next one arrives. The film presents disturbing statistics: Twenty-five percent of American workers earn less than the federal poverty level for a family of four; since 1979, there has been a 50 percent increase in the number of workers in poverty. The minimum wage is now 30 percent lower in real terms than it was 25 years ago. For many American workers without college degrees, this economy no longer provides upward mobility and opportunity. More and more, available jobs for high-school graduates are in the low-paid service sector only, where earnings of $8 to $11 an hour are generous. And while these wages might support a summer-school student whose room and board are paid by parents, they will not provide for a family.

The documentary follows workers trying to make it as a nursing home aide, a security guard, a halfway house manager, and a waitress—the jobs still open to them because, at least so far, U.S. corporations have not figured out how to ship old people, delinquents, and food service abroad. All four face similar problems: Their children are sick, and they have no health insurance; two are about to lose their houses and their cars because it’s not possible to cover a mortgage and a car payment on $11 an hour. Without cars, they cannot get to work. Without houses, the kids can’t go to school. None of these workers has any kind of job security, even at the pittances each earns. And three of the four are not unusually hard-luck stories. Two women lost their middle-class incomes in a divorce; one man is a recovering alcoholic. The fourth—a “welfare-to-work” single mother—is trying to keep her job, earn an associate’s degree, and raise her children alone.

The documentary shows what has happened to the American working class as the United States replaced General Motors Corp. with Wal-Mart Inc. as the country’s largest employer. We lost sick leave, health insurance, pensions, and decent wages. In return we got—what? Competitiveness and “everyday low prices”?

It’s worth pointing out that the people profiled here are able-bodied, literate, sane, high school graduates in their prime. One is a union member. We’re not talking serious “disadvantages” in abilities. Their worst crime was to hit the job market after the decent jobs for the moderately skilled had departed or been automated, and after over 20 years of relentless Reaganism, NAFTA-esque globalization, political meanness, and corporate greed had ripped up the safety net.

The three women come to a happy ending—although as they themselves point out, it’s not necessarily an ending. One finds a generous, understanding boyfriend. An emergency housing subsidy comes through for a woman who has been caring for her disabled daughter and her grandchildren for years. And another manages to reduce her hours and continue her schooling. But there are no guarantees. The worst enemy is insecuri
y. Whatever they
or any of us, have today—a paycheck, a doctor, a roof, a meal—it could be gone tomorrow. As Mary Venitelli, the waitress, sums up nicely, “I’ve got no freakin’ money. This can happen to anyone in a heartbeat.” —Beatrice Edwards

Note: Waging a Living is scheduled to be broadcast nationally on August 29. Check local listings.

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Published at 12:00 am CST