Uchitelle

Book Title: The Disposable American
Author: Louis Uchitelle

Editorial Reviews

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.

From The Washington Post's Book World/washingtonpost.com

In 1997, the board of directors of the Stanley Works, a Connecticut tool company, lured its new chief executive, John M. Trani, away from General Electric with a compensation package that was two or three times those given to any of his predecessors since its founding in 1873. Like many of his peers at other U.S. companies at the time, Trani closed plants, cut costs, downsized and outsourced the company's operations. Six years later, 5,500 Stanley employees had lost their jobs.

This story is one of several that Louis Uchitelle, a New York Times economics reporter, uses to argue that there is something fundamentally wrong with the tolerance that this country has developed for large-scale layoffs. His The Disposable American is a nostalgic, anxious book. Uchitelle writes longingly about a time when corporate layoffs were seen as a stain on a company's reputation and when job security was a reasonable expectation -- a time when the worries of American workers had nothing to do with the vagaries of a globalized economy or the outsourcing of jobs to India or China. The author often relies on an idealized view of the employment practices of the past to sharpen the contrast with the more volatile and insecure present. Still, despite the book's occasional exaggerations ("a layoff is an emotional blow from which very few fully recover"), it is impossible not to be touched by Uchitelle's many real-life tales of sacked workers who, through no fault of their own, were thrown into an economic and psychological maelstrom with weak or nonexistent safety nets to help them and their families.

The problems Uchitelle highlights are important, and some of the solutions he proposes make sense. It is clearly wrong, for example, to give huge tax breaks to the wealthy when working families must struggle with limited health insurance or none at all. Cutting outrageous corporate-welfare programs and using the savings to improve health and education for workers is also an unassailable proposal. Unfortunately, not all of Uchitelle's prescriptions are so easy to defend. Government regulations that would make it costlier for employers to fire workers, for example, are good news for the workers who already have jobs but hurt those who are unemployed and looking for work because higher firing costs reduce companies' propensity to hire.

The Disposable American is too often silent on what could be done to avoid the well-known downsides of the policies it champions. Though Uchitelle knows better than to hold Europe up as a model, many of the policies he favors have a strong European flavor -- even though the usual European cocktail of welfare and labor conditions contributes to chronically high unemployment, sluggish economic growth, unfunded public programs and low productivity. Moreover, Europe's rigid labor markets especially penalize the poor, the unemployed and the unskilled, favoring instead a "labor oligarchy" of securely employed workers already ensconced in jobs. The above-average unemployment rates among Europe's youth and its impoverished immigrants are a factor behind the rising criminality, rioting and social turmoil that disproportionately afflict these groups.

It is also surprising that Uchitelle, who in his day job reports on the U.S. economy, could write a book so neglectful of America's distinct advantages. Although massive layoffs have important economic and social costs, the relative ease with which U.S. companies can trim their payrolls to adapt to changing conditions also has benefits. Millions of jobs regularly disappear from the U.S. economy, but with equal regularity, millions more are created. Indeed, no other industrialized country systematically creates as many jobs as the United States. The problem is that while the job losses resulting from plant closings and downsizing are highly concentrated in time, location and industry, the new jobs appear broadly dispersed throughout the nation, over different sectors and over time.

True, workers who lose jobs often must accept new ones at lower salaries; true, all of that is traumatic and undesirable. But the fact remains that, between 1980 and 2002, the U.S. population grew 23.9 percent -- and the number of jobs increased by 37.4 percent. And the painful private-sector restructuring that has taken place in the United States since the mid-1990s, like the one epitomized by the Stanley Works vignette, has created stronger companies that are the backbone of one of the world's most prosperous, competitive economies -- one that continues to create jobs while all other industrialized economies are growing too slowly or stagnating. Last February, for example, New York Times readers learned that, "in one of the strongest job reports since the start of the recovery in late 2001, the government reported yesterday that the unemployment rate fell to 4.7 percent, its lowest in more than four years. The nation's employers hired workers in nearly every industry." The author of the article? The same Louis Uchitelle who in The Disposable American claims that labor conditions in the United States are a "festering national crisis."

The Uchitelle who wrote this passionate but flawed book would correctly insist that we should be alarmed about the poor quality of the jobs being created, rather than being mollified by their quantity. Unfortunately, his compassionate desire to improve the quality of American jobs makes him too eager to experiment with policies that in the long run are known to hurt those whom he seeks to help.

Reviewed by Moisés Naím
Copyright 2006, The Washington Post. All Rights Reserved.

From Booklist

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.

Book Description

The Disposable American is an eye-opening account of layoffs in America—their questionable necessity, their overuse, and their devastating impact on individuals at all income levels. Yet despite all this, they are accelerating.

The award-winning New York Times economics writer Louis Uchitelle explains how, in the mid-1970s, the first major layoffs, initiated as a limited response to the inroads of foreign competition, spread and multiplied, in time destroying the notion of job security and the dignity of work. We see how the barriers to layoffs tumbled, and how by the late 1990s the acquiescence was all but complete.

In a compelling narrative, the author traces the rise of job security in the United States to its heyday in the 1950s and 1960s, and then the panicky U-turn. He describes the unraveling through the experiences of both executives and workers: three CEOs who ran the Stanley Works, the tool manufacturer, from 1968 through 2003, who gradually became more willing to engage in layoffs; highly skilled aircraft mechanics in Indianapolis discarded as United Airlines shut down a state-of-the-art maintenance facility, damaging the city as well as the workers; a human resources director at Citigroup, declared nonessential despite excellent performance; a banker in Connecticut lucky to find a lower-paying job in a state tourist office.

Uchitelle makes clear the ways in which layoffs are counterproductive, rarely promoting efficiency or profitability in the long term. He explains how our acquiescence encourages wasteful mergers, outsourcing, the shifting of production abroad, the loss of union protection, and wage stagnation. He argues against our ongoing public policy—inaugurated by Ronald Reagan and embraced by every president since—of subsidizing retraining for jobs that, in fact, do not exist. He breaks new ground in documenting the failure of these policies and in describing the significant psychological damage that the trauma of a layoff invariably inflicts, even on those soon reemployed. It is damage that, multiplied over millions of layoffs, is silently undermining the nation’s mental health.

While recognizing that in today’s global economy some layoffs must occur, the author passionately argues that government must step in with policies that encourage companies to restrict layoffs and must generate jobs to supplement the present shortfall.There are specific recommendations for achieving these goals and persuasive arguments that workers, business, and the nation will benefit as a result.

An urgent, essential book that tells for the first time the story of our long and gradual surrender to layoffs—from a writer who has covered the unwinding for nearly twenty years and who now bears witness.

Amazon.com The Disposable American Layoffs and Their Consequences
By Louis Uchitelle

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