Q: What drew you to corporate layoffs as a theme?
A: As an economics writer for The New York Times, I often use companies and their workers to illustrate what is happening to the economy itself. What I kept running into were layoffs, first among blue-collar workers and then in white-collar ranks as well. What started as a legitimate response to encroaching foreign competition became overly used and very damaging.
Q: How did that happen?
A: There was an evolution. We came into the mid-1970s having built up for nearly a century this very strong job security ethic. Unions played a role. So did the New Deal legislation that came out of the Depression. But employers also contributed. The biggest, most important corporations saw job security as a good thing. They wanted their employees to feel attached to the companies that employed them, and to build up over a
career the skills and experience needed to run these complex organizations. Then in the mid-1970s, we began to dismantle this job security. There was resistance, sometimes stiff resistance. But by 1997 the resistance had been overcome and we had acquiesced as a nation to the easy and frequent use of layoffs.
Q: Did corporate executives switch on a dime, or were many reluctant at first to lay off workers?
A: Many were reluctant. I have known, for example, three generations of chief executives at the Stanley Works, the tool manufacturer in New Britain, CT. The first two were reluctant to engage in layoffs. Strikes and temporary furloughs were very much part of their corporate repertoire, but not layoffs, not the permanent disposal of their workers. Nevertheless, starting in the late 1970s, each went a little further into layoffs, and ultimately the third CEO embraced them. Over time, the social constraint had dissolved.
Q: As this process unfolded, did those who were laid off speak openly to you about what had happened to them?
A: Not at first. Although the layoffs were widely reported, many of the victims felt shame for having lost their jobs, as if they had failed and their neighbors and friends had not. They tried to hide their layoffs, even from family. That was in the 1980s. People don’t hide anymore. They stopped doing so in the 1990s. Their experience became too commonplace.
But the psychological damage is still very much there. With very few exceptions, people see their layoffs as statements by their employers that they are valueless as employees. It is a torturing thought. Self-esteem is damaged. Lives are warped or set back. You see that in the men and women who appear in The Disposable American, blue collar and white collar alike.
Q: Describe the psychological damage that laid-off workers experience.
A: The layoff damages our mental health in two ways. As the sociologist Richard Sennett points out, people create for themselves a life narrative. Career is essential to that narrative. “Not to make a career out of one’s work,” Sennett writes, is “to leave oneself prey to the sense of aimlessness which constitutes the deepest experience of inadequacy.”
The other form of damage is more direct. Dr. Theodore Jacobs, a prominent psychoanalyst, puts it this way: “Even if a person is accurate in saying, ‘I did a really good job,’ and I can see that the company is in a bad way and they have to lay off a lot of people and it is really not about me,’ there is seldom an escape from the inner sense of ‘why me.’ In other words, one has some sense that he or she has failed and the outside world has made that judgment.”
Q: You argue that as a society we reinforce this psychological damage. Explain?
A: As a society, we hold the victims responsible. Many companies rate their employees and when layoffs come, the lowest rated get the boot. Even when that does not happen—when the layoffs are impersonal, as they so often are—we insist that Americans are in control of their lives and have it within themselves to land on their feet. If you are laid off, then what you must do is retrain or go back to school to qualify for the good jobs that are out there. If you fail in this endeavor you have only yourself to blame. I am describing a message that, in various forms, comes incessantly from our politicians, our policymakers, our social
scientists, and even some union leaders.
Q: What is wrong with this message?
A: There isn’t a skills shortage. The number of jobs requiring education and skill fall short of the number of qualified people seeking them. I ran across this shortfall frequently in my reporting for The Disposable American. The men and women portrayed in the book often ended up in jobs beneath their skills and at wages well below their lost pay. This happened despite the best efforts of many of them to retrain and get more education. We have developed a whole industry of job coaches and career coaches who are selling the idea that if you can polish yourself properly and present yourself properly, keep your anger under control and get the right training, you’ll land a good job. They are selling a ruse.
Q: Aren’t some layoffs nevertheless necessary? Doesn’t globalization force us into labor cost-cutting?
A: Yes, it does. Some labor cost-cutting is unavoidable in the present global setting. But we should not be blaming the victims, and we should recognize that American employers have taken the process too far. The United Airlines maintenance center in Indianapolis is an example—a chapter is devoted to this story. The center’s cutting edge technology meant that the mechanics could overhaul narrow-bodied airliners in fewer days than competitors. The facility worked so efficiently in the late 1990s that at least one foreign airline considered sub-contracting maintenance to Indianapolis. Global competition would have worked in our favor. But when United and its mechanics got into a struggle, United chose to lay off the mechanics and close the maintenance center, depriving the United States of an industrial jewel. Maintenance was outsourced to low-wage contractors in the south. Twenty years ago, before layoffs became an easy and acceptable practice, that could not have happened. United and its mechanics would have been forced to negotiate an agreement—and they would have. Our acquiescence to layoffs has lifted this healthy constraint.
Q: In your book, you describe the various ways in which layoffs are disguised. Why is this done?
A: During the 1980s and early 1990s, layoffs were often quite cruel. Workers were openly cut from their jobs by corporate executives who saw in this public display of aggressive management a means of supporting their stock prices and their reputations on Wall Street.
But as layoffs spread from blue collar to white collar and up the income ladder, there was a backlash. It came in the mid-1990s and many of the nation’s employers responded by modifying their behavior. The layoffs continued to be as numerous as ever, but they were often hidden. They came as buyouts and premature retirements and outsourcing in which the employee whose task was outsourced resigned rather than switch over to the new contractor at a lower wage with fewer or no benefits.
Q: How many people have been laid off in the United States?
A: I estimate at least 30 million full-time workers since the early 1980s, just on the basis of the worker displacement surveys conducted biennially by the Bureau of Labor Statistics. The 30 million works out to roughly 4 percent of the nation’s full-time workers, on average, in any given year. The bureau’s survey does not catch most of the disguised layoffs, however. Add those in and the percentage rises to 7 or 8. That’s a lot.
Q: You also examine the effect of a layoff on workers who remain at the company. Tell us about that.
A: The survivors often feel vulnerable and less attached to their companies. They call in sick more often, for example, and are less productive. I tell a story about a group of software developers at Xerox who became so unhinged by layoffs elsewhere in the company that instead of concentrating on their software work, they spent more time in meetings trying to demonstrate to their bosses, and to themselves, that they were valuable.
More to the point, the most successful companies do not engage in layoffs, or do so only rarely. They see them as counter-productive. Southwest Airlines is an outstanding example of this abstinence, but there are others.
Q: What can we do to end the layoffs or reduce them?
A: I do not have a universal solution. My book is essentially an attempt to make people aware that we have acquiesced to layoffs and how that happened. The barriers came down, one after another, from 1977 to 1997. We cannot undo what has happened, but we can erect new barriers and slow the process. The first step should be a requirement that companies file annual reports detailing how each employee who left the company did so: resignation, early retirement, outright layoff, normal retirement, buyout. These reports would be
published and the public response might begin to generate resistance. Or the companies themselves might limit their layoffs, not wanting to be spotlighted for shedding more workers in a given year than their industry’s average.