How Secure Is Your Job?

By Laura Barcella, AlterNet. Posted April 7, 2006.

In his new book, "The Disposable American," New York Times business writer Louis Uchitelle takes a sobering look at the sordid history -- and the future -- of layoffs in America.

Though the bulk of his expertise lays in the business realm, Uchitelle argues that layoffs' ascending frequency isn't just damaging America's job security, but our sense of self-worth. He writes that the ever-insidious "self-help" movement (specifically, books such as "Who Moved My Cheese?") has encouraged workers to accept more responsibility for their own job security than necessary -- unfairly placing the whole burden of fair wages, pensions and workplace stability on employees' shoulders rather than the corporate heads hiring (and firing) them in the first place.

Unsurprisingly, almost every person he interviews in "The Disposable American" seems to prove Uchitelle right. The human stories shared in the book echo Uchitelle's hypothesis that getting laid off has long-term negative effects on motivation and self-esteem, as well as making it harder to land a more challenging position the next time around.

Fortunately, though, Uchitelle isn't just the bearer of bad news. He also offers ideas for strategic solutions -- potential ways to reverse, or at least downshift, what he dubs the "U-turn" in job security that began in the late 1970s in response to rising foreign competition.

He spoke with AlterNet via telephone from his New York office.

Laura Barcella: First, tell me why you decided to write this book.

Louis Uchitelle: I have been covering the rise of job insecurity since the late '80s, and I became interested in what was happening to people. There was always this idea that we would get rid of the blue-collar workers [who] weren't pulling their weight, and it kept going, on and on, into the white-collar workers.

At the New York Times, I was the lead writer on a long, six-part series in 1996 that laid out what was happening -- and by then we had gone through so many barriers of resistance to layoffs, or of limiting them, and the Clinton administration at that point came in and said -- we'll keep the layoffs and handle it by job creation and by reconditioning workers -- education and training. And we'll cycle them back into the work force. The more I wrote about that, the more I realized that something was very wrong, and I finally put it together in a book proposal.

LB: What sorts of reactions have you received thus far?

LU: People think it's an important book Two issues that I think are very important is this myth that people can, through more education and training, cycle back into the work force with perfectly good jobs. The evidence is definitely against that. First of all, there is an oversupply of skilled people relative to the jobs that are available. And secondly, we don't properly measure the damage to the companies themselves and the productivity that comes from job security.

To people who are, in effect, told that this is a be-your-own-manager society, when they're laid off, [it's implied] that they don't have value as workers -- and that's a considerable psychological blow and a source of mental illness. I didn't realize that until I started to report this book, and ran into it over and over again among the people I was interviewing. I went to psychiatrists, and they said that there was no question about [layoffs' damaging psychological effect] on people -- some people more than others -- depending on their personality and predispositions.

But it means that people don't get back into the work force using all their old skills. They don't take risks, and they suffer. It's a memory that undermines them for many years -- and this is not a story about unemployment, it's story about layoffs. Most people go back to work again or drop out altogether.

LB: What were some of the long-term psychological effects of layoffs?

LU: I found people constantly trying to figure out what happened to them, trying to figure out if they had just done this, or had a different boss, or changed departments They kept going over and over it again; why did this happen to them? They sought, in these conversations, some peace of mind. They tried to regain their self-esteem.

There's a sociologist named Richard Sennett who, in his book "The Corrosion of Character," makes the point that we all have a life narrative, and work is part of that narrative, and the narrative is part of our identity. If you take away the work and the identity that comes with the work, you interrupt the life narrative.

I found people trying to reconstruct that narrative in various efforts, and I think you would see that in somebody like Kim Dewey, one of the mechanics [quoted in my book]. There's others, like Craigy Imperio, who got his engineering degree and who, through hard work, has managed slowly to work his way up the ladder. But others don't do it.

LB: Were the psychological effects similar or equal among people -- blue collar vs. white collar?

LU: The effects are similar for everyone -- blue or white. There's not that distinction. The effects are determined a bit by personality. Some people are more prone to damage than others. But there is some damage [for everyone]. Some people bounce back from it, but most don't bounce back from it easily. They lose something.

LB:You said it could almost be seen as a mental illness, in terms of how the workers see themselves

LU: Well, I don't want to make it seem like mental illness in the sense of straightjackets. It takes away their self-esteem, and that undermines your mental health. It's not good for mental health.

LB: Did most of the people you spoke with bounce back later?

LU: There's one person in the book, a first-rate aviation mechanic, who got his engineering degree while he was a mechanic. He was hurt by [his layoff] and rather than take a challenging job and risk having this happen again, he's now working in the Indianapolis school district as a maintenance man.

Another mechanic who had this happen also got his engineering degree after he got laid off, in fact he was spurred to do that by the layoff, and he has a pretty tough life behind him. He ended up having to take an aviation mechanic's job at half his old salary, but by dint that he's a good politician, he played golf with his supervisor, he got to know this one and that one, and he got himself finally promoted to an engineering job and is working his way back up the ladder. He still isn't making as much as he was making before, but he dealt with it differently. He was also damaged, but he came back from it better.

You can't tell who is more damaged. You can't say -- well, we can do this because enough people aren't all that damaged. You don't know what's going to happen.

LB: Have you ever been laid off?

LU: No.

LB: I was -- in my first magazine job after college. They laid off about 20 people at once.

LU: It's not unusual for young people to go through a few job changes before they arrive at a career, but at some point in our 30s, people commit themselves to something, or try to -- and then if they lose that job, it's really a blow. They commit and then spend five or six or ten years at it, and [if they] then lose it, it's difficult.

LB: Did you notice any differences among people who had been laid off individually or in small groups vs. in huge companywide layoffs?

LU: To some extent, if it's a layoff where it's a unionized shop and everyone gets laid off by seniority -- in four or five steps -- that's a little bit better. But, no, it's still a sense of loss, and it's still a disruption. People want to belong to an organization. And when they can't, they try to find some other way to belong, if they can possibly do it.

We are destroying the communal nature of our lives -- that's what I'm trying to say in the book. I don't think we can stop the layoffs. We do live in a global society, there is a change; but we're not dealing with this as a community, and in not doing that, we are going to excesses.

LB: Can you explain what changed in the late '70s, when, as you noted in the book, there was a "U-turn" in layoffs?

LU: In the late 1800s, we created these giant corporations. We had this big ocean-to-ocean mass market. No nation in the world had ever had such a large market. We served it first with these big coast-to-coast railroads, and then with Sears Roebuck and U.S. Steel. These were complicated, huge organizations, and the managers of these organizations understood that they had to have experienced, skilled people to run them. That required longevity in the jobs, which meant job security. They designed pensions so that the people would stay and they encouraged that -- it actually had a name -- welfare capitalism.

While there was plenty of hiring and firing going on in this period, the major companies, the pace-setters, pushed for job security as the best, most efficient way to run their companies. Alfred Chandler, a famous economic historian, describes this vividly in a book called "The Visible Hand." He's an older man now, a Harvard economist; it's a classic book.

A company like Procter & Gamble, concerned about losing people, started offering a percentage of stock every year. As the stock kept going up, that became a wonderful retirement fund, but you had to stay in the company for 30 years to get your hands on the money. Then we came to the Depression, and companies weren't so eager to keep people on. Then we had New Deal legislation, which strengthened job security.

You have to understand that you can describe, in the 1920s, a period very similar to what's going on now. But then we didn't know any better, and we were going up the ladder towards job security, and now we're going down. [The downward trend] started in the mid to late '70s, when we were no longer the dominant supplier of goods and services -- not only to ourselves, but to the whole world. Suddenly we got competition, and we dealt with it with layoffs, some of them quite legitimate.

But slowly thereafter, from '77 to '97, we started taking down barriers to layoffs. We started insisting that there was no problem, that the people who got laid off weren't properly skilled -- all they had to do was go back to school and get more skills, and they would qualify for all the good jobs out there that were going begging.

In fact, there's any number of statistics that show that we have skilled people in excess of the demand for them. Thirty-seven percent of all airline attendants have bachelor's degrees. You don't need a bachelor's degree to be an airline attendant. It's nice to have it.

As one barrier [to layoffs] after another came down, the layoffs went up. We had a steel company shutting down mills, and there was uproar about it, attempts from the communities and the unions and church groups to buy the mills and keep them open, then that disappeared. We gradually acquiesced to the process. There was a backlash in the early '90s, when there were corporate killer type of articles. There was a lot of bragging, on the parts of CEOS, about what was happening. And there was a political backlash. Ross Perot in '92 and Pat Buchanan in '96 did well in primaries and elections, on the basis of the unhappiness over layoffs. Clinton finally dealt with it by saying, "Look folks, we can't stop the layoffs. We will try to make companies responsible."

The companies themselves got the message and became much more PR-oriented in dealing with layoffs. They didn't reduce the layoffs, but handled the announcements a lot more suavely than they had before. Clinton said that we would create jobs and provide training to reinvent people as workers. First of all, he didn't provide enough money for the training, and second of all, even if he had, it would have been hard to work out. So, we didn't do it as a community. We didn't say, "Look, there aren't enough good jobs out there. If layoffs must go on, as a community we have to have some way of helping these people."

LB: You mention that the way people get laid off has changed. How?

LU: We've acquiesced to it -- that's one thing. You don't find mass layoffs as much as you used to. You find announcements that 20,000 people are going to be laid off, but in fact it doesn't happen like that. Companies lay off a dozen people today, and another dozen three weeks from now. It goes slowly, and the people who remain say to themselves, "Maybe it won't happen to me if I keep my head down."

But there isn't this mass -- from one day to the next, 20,000 people disappearing. That happens occasionally, but not very much. The companies themselves are as careful as they can be about handling it; they just keep doing it.

LB: What about the psychological effects on corporate heads? Are they internalizing this fear and anxiety, too?

LU: I don't know the answer to that -- that's to be explored. I know that there isn't an acknowledgment. I've asked psychiatrists at the American Psychiatric Association [about] why they don't go public. Why isn't there a warning label on layoffs, as there is on cigarettes, that this is bad for your health? They say, "We can't do that." Then we'd have to put a warning label on divorce, or war, so we'll treat the symptoms, not preventative medicine.

That might get revised as time goes on. I'm going to appear on a panel at a psychiatric convention to discuss this issue. There are people wondering about it. There was one group that tried to raise an issue about this in the early '80s -- long before I discovered it. I suddenly ran across a book that was written. I met with these people, and they said it was very hard; they were all consultants at companies, and the people that employed them did not want to hear about what damage they were doing.

LB: What are some viable alternatives to layoffs?

LU: I'm a great believer in democracy. I think that whatever happens has to come out of the people. The first order of business is to count the layoffs accurately. We undercount them; we leave out the hidden layoffs, the forced retirements. If we included them, we would probably come up at seven or eight percent of all full-time workers losing their jobs every year. And another four percent or so that are newly counted.

Secondly, I think that we should require companies to document how people leave -- by retirement, by layoff, by quitting, whatever means. We would then have a database that we could study; academics could come in and say, "Among computer-makers, the norm is 100 layoffs a year, but here's a company that's doing 150 -- why are they beyond the average?"

I'm talking on the margin. I have no overall solution. Then we have to face the concern -- how are we going to create enough jobs for the people who are laid off? How can we send them the message that we want them employed? That might require, perhaps, some recognition that the private sector -- by itself, even with the best will in the world -- cannot create enough jobs to keep people fully employed at good wages. Once that's acknowledged, we have to decide where to go next. My job is to lay out the case.

LB: What can people do who might be nervous?

LU: They could band together, form groups, and understand what's happening to them. Face the idea that if they look at it as a group, it's not a comment on their skills, that they are corks at sea in a storm. And perhaps make the point, politically, that this business of retraining for good jobs is not a solution. I'm not saying we shouldn't be educating people -- we absolutely should be. I'm not saying education doesn't matter at all. If you're going to build a bridge, you need engineers to build it. But you have to have a demand for the bridge as well as the engineers. There is a certain supply and demand, working together -- but we're trying to make it all supply. We're trying to say that everyone who gets properly educated will magically have good work and good pay, and if you don't have it, you must not be doing the right thing.

LB: How are you hoping your book will influence the layoff landscape and job security in general?

LU: I'm hoping it will help people look at it more realistically and puncture the myths that are out there. They should also recognize that we are a communal society; we have always been that. Once they look at what has happened, what this trajectory has been -- from more and more job security to, now, the U-turn -- knowledge will strengthen their own mental health. And they will come up with actions, they'll begin to question political candidates, they'll begin to look for responses in the people they elect.

LB: How have layoffs shifted depending on the political landscape and who is in office?

LU: I don't think it shifts at all. I think Republicans and Democrats are almost identical in how they handle this. There hasn't been any change at all. There was once a movement in this country to supplement private sector jobs with public sector jobs. I don't mean moving dirt from one side of the other to stimulate the economy. There's real needs out there -- for quality child care, for example, or public transportation rebuilding schools, all sorts of things.

That might be one way of absorbing the excess people who cannot find good jobs in the private sector. But they don't exist in sufficient quantity. I also think it's a good idea for people to be as well-educated as possible Although education, by itself, is not the solution.

LB: You wrote that certain self-help treatises have wrongly trained people to feel responsible for their own job security.

LU: "Who Moved My Cheese?" is the famous book. It compares two humans with two humanlike mice, and the "cheese" is the jobs. The mice, as soon as the cheese disappears from its usual place, go out and start looking for a new supply -- whereas the humans sit there and moan and feel sorry for themselves and hope that the cheese will come back. Finally, they get their heads on straight and go out looking for another supply of cheese.

That's a little bit like saying, "Don't moan about losing your job! Get yourself an education; do what you have to do. The cheese is out there; you just have to figure out how to do it. And if you don't figure out how to do it, it's your fault."

That message of "your fault" is devastating in this country. It's not that we shouldn't be responsible -- we should go to school. It's politically a lot easier to put the responsibility on the victims rather than the politicians or the unions taking on all the responsibility. We've acquiesced to layoffs and outsourcing, and we've made it easy, and that greases the way for more than is necessary.

LB: Do you think the trend will continue?

LU: I have no idea. The whole purpose of writing the book is to influence what happens next, and not by some policy description, but trying to give people a sense of trajectory and history and to remember that job security has a long history in this country, and it still serves a purpose. Maybe not in the old way, I'd be the last to argue that, but it serves a purpose.

Laura Barcella is an associate editor at AlterNet.

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