Layoff effects

Monthly Labor Review, March, 2007 by Solidelle Fortier Wasser, Michael T. Wolf

The Disposable American: Layoffs and Their Consequences. By Louis Uchitelle. New York, Alfred A. Knopf, 2006. 283 pp., $25.95/hardback.

In his book The Disposable American, Louis Uchitelle takes a narrative approach in conveying the problems of mass layoffs in America. Analyzing these problems and providing economic solutions would normally make a dry and boring read, but Uchitelle provides sympathetic case studies of lives ruined by seemingly senseless layoffs. Between the personal case studies lies well-documented evidence of real economic problems and criticisms of our free-market society.

Uchitelle shows how managers and employees handle layoffs. For example, the CEO of Stanley Works from 1966 to 1988 was a part of his employees' community but had to leave his home and site of Stanley Works due to feelings of guilt and shame he felt about trying to keep his company competitive through layoffs. This civic-minded manager is contrasted with subsequent CEOs who unapologetically laid off workers and moved their plants to areas with lower wages and rents. Uchitelle sees the effects of these layoffs firsthand as he repeatedly interviews those laid off by Stanley Works and United Airlines. As Uchitelle spends more time with these former employees, the degradation of the psyche of those once able-bodied, hard-working, intelligent workers becomes more apparent. He shows how these workers struggle to reenter the workforce and how the system subsequently fails them.

Uchitelle blames politicians, government agencies, corporations, the free-market economy, and the detached, uncommunicative American public. State and city governments are criticized for spending their money unwisely, luring big companies such as United to their area with tax breaks and incentives. United created a state-of-the-art facility in Indianapolis (in part, thanks to the city's and Indiana's $320 million contribution) where highly skilled mechanics repaired and maintained aircraft; but, less than 10 years later, United decided to relocate the shop, reducing wage costs. Uchitelle implies that there is a serious cost to American "know how"--and even plane safety--in jettisoning this hi-tech operation with its skilled workforce.

Uchitelle's narrative approach allows him to demonstrate how important a career is to a person's psychological and social well-being, as well as to the person's feelings of acceptance as a valued member of a community. A section on well-paid professional workers forced into early retirement on pensions that provide a reasonable standard of living underscores his point. The workplace is the community in which most of us live. If its environment is hostile to our well-being, we all lose, even if money is not an issue. Uchitelle's criticisms, combined with the depressing stories of the laid-off, may conjure sympathy from the reader and even excite him or her to fight this problem that is affecting so many of our fellow Americans, but what do we do about it?

An entire chapter is devoted to solutions to the mass-layoff epidemic, but unfortunately these are less inspiring than the case studies. Uchitelle does, however, suggest more progressive tax rates to enable the government to spend more on job creation, especially jobs developing new technologies. He also calls for better statistical information, even to the point of mandating reports from industry on terminated jobs.

BLS is chastised for being apathetic towards the layoff problem. Surprisingly, Uchitelle does not mention, nor does he even seem to be aware of, what the Bureau developed in response to the arising problems of measuring layoffs--surveys and programs such as the contingent worker supplement to the Current Population Survey, the Mass Layoff Statistics program, and the Job Openings and Labor Turnover Survey (JOLTS). He argues that there are not enough white-collar jobs to accommodate the unemployed even if all were appropriately educated and skilled, thus criticizing job-training programs for raising expectations that cannot be realized.

The Disposable American presents the problems with layoffs in a riveting, objective manner, but does not provide very many answers. The book targets, however, a constituency that will be moved to discover new solutions.

--Solidelle Fortier Wasser and Michael T. Wolf

Bureau of Labor Statistics, New York region