The Disposable American … This Could Mean YOU

GUEST: Louis Uchitelle
VTR: 06/22/2006

I’m Richard Heffner, your host on The Open Mind. And my guest is Louis Uchitelle, lead reporter for the New York Times prize winning 1996 series on “The Downsizing of America” … and author now of the thoroughly scarifying 2006 Alfred A. Knopf volume on “The Disposable American”, about “Layoffs and Their Consequences” in this, our land of plenty.

Indeed, as I read “The Disposable American” last week, I couldn’t help but think of the movie “Network” and of actor Peter Finch shouting “I’m mad as hell, and I’m not going to take it anymore.” For my guest IS quite clearly “mad as hell” that America is being downsized and that American workers – you and I, dear viewer – are more and more considered disposable.

Others agree. Economist and author Sylvia Nasar writes, “Louis Uchitelle’s superb book … is the perfect antidote to the smug Social Darwinist view … that constant change is a law of nature, that loyalty is a vestigial virtue, and that the slightest concession to job security or community roots is incompatible with economic success.”

And Robert Putnam, author of the insightful “Bowling Alone” writes, “If you care about how burgeoning job insecurity is undermining the social contract at the heart of the American dream – and you should – read this book.”

I agree: VIEWERS, READ THIS BOOK! It’s extraordinary. It’s frightening. And it may well, in time, relate to each one of us.

Yet, in all honesty, I must also ask my guest whether sharing with him his discouraging stories isn’t – in terms of the realities of corporate America – simply going to encourage us to spit against the wind. What about that?

UCHITELLE: Well, I think we have to raise this or remove this just from the realm of corporate America. If I had one discovery in my reporting that I didn’t expect to have … it was how much I would get into the psychiatric aspects of this.

That is, we are doing something to people that is socially damaging, personally damaging, undermining public health. And I don’t mean unemployment. I mean the act of laying someone off in this country and telling them, in effect, and this is the message, that they don’t have value.

I was speaking last week at the … at a Conference of the American Psychoanalytic Association and there was a bunch of psychoanalysts in the audience and they got up and they said … and we sort of took a vote … how many of them had found in their analysis of people trauma as a result of layoff. And virtually everyone in that room, 50 psychoanalysts put their hands up.

It’s not a very visible damage that we’re seeing. It’s not that you’re out on the streets with you … pulling your hair … you lose a job, you get your sense of self, of self-esteem undermined. You’re wandering, you lose control of your narrative of life.

And … as I point out with the people I interview, you are afraid to go back into a challenging job again and run that risk, so why have an aircraft mechanic here who went to work as a janitor … a huge waste of skill. You withdraw entirely from the workforce because you … you’re able to get by on your wife’s salary or you saved enough at the high end … this affects everybody … whether they’re the people with six figure incomes or $25 an hour or $20 an hour … you just withdraw.

You have …you go back in and you have to re-build all the connections within a company that give you a sense of self-esteem; that give you a sense of value in a company. Because most people when they change careers have to re-prove themselves. That’s social damage. And that requires … and the market won’t deal with that. That requires some sort of intervention.

We did it back in the Depression. We had huge unemployment then, and we responded with what amounted to government steps to strengthen job security. So that we came out of World War II, and I’ll read you … where every constituent believed in job security.

And I’ll read you something … one of my favorite quotes is Tom Dewey … if I can find it … let’s see … page 43 … this is Tom Dewey talking …

HEFFNER: Let’s let people know that Tom Dewey was the Republican candidate for President twice

UCHITELLE: Tom Dewey was … not only was he the Republican candidate for President, but he was the Conservative Republican candidate by the standards of that day. He was running again Roosevelt in 1944 and he says, as a “stump” speech, “If at any time there are not sufficient jobs in private employment to go around, then government can and must create additional job opportunities because there must be jobs for all in this country of ours.” Well, that’s … you wouldn’t get anybody to say that today.

HEFFNER: But I think that’s the problem. That you wouldn’t get very many people to say that today. You would say it, I might say it. But my question really has to do with the counter-revolution that has taken place against the Roosevelt Revolution …

UCHITELLE: That’s …

HEFFNER: … against the New Deal.

UCHITELLE: And my hope is that if people come to realize the extent to which they are being personally, emotionally damaged and they … and since there’s millions of layoffs, the extent to which health is undermined, that first the psychiatric profession … in fact, puts a warning label on it and says, “This is dangerous to your health”, and then we begin to push back and we say, “Well, look we do live in a global economy, we can’t stop the layoffs, but we ought to face what they mean.”

And if this is what they mean, what can we do about them? We’re not … we’re not masochists in this society, we should not, and what we have done, however, is … since the late seventies when we still had quite a bit of resistance to job insecurity … we’ve dismantled all that resistance and I outline that in this book and we get to the … we acquiesce, we say there’s no other way to go. And that’s a myth.

HEFFNER: But you know … this … in this wonderful book and it is wonderful because the scarifying aspects of it … the points you’re trying to make right now … are making so well … are so very important, but what I kept thinking as an erstwhile American historian … was what’s new about this?

You’re talking about a very, very brief period in the American experience from 1932 or 33 on through the war … the war years … the end of the war … the determination to make it a better America, a better world and then a reversion to type, if you’re talking about a certain kind of economic organization.

UCHITELLE: I don’t … I think the period isn’t that brief. I think that starting in the late eighteen hundreds management and labor, of course was involved … decided that job security had value.

We created these … we were the first country in the world to create these giant, complex corporations … the railroads first … Alfred Chandler is wonderful on this and Sanford Jacoby at the University of California at Los Angeles … we had these giant corporations … Sears Roebuck, Proctor and Gamble, Eastman Kodak, duPont … no other country had them.

They required experienced, skilled people and management itself decided that they had better design pension plans and other means of keeping people over a lifetime career. Because you needed people who had an identity with the company, they often had to work on their own without supervisory management.

And that moved toward … they called it “Welfare Capitalism” towards job security, instituted by management, but also … Proctor & Gamble, for example … William Proctor put in a bonus plan designed to keep employees … he did it the year after the Haymarket riots in Chicago, he was worried about labor pressure.

That moved us all the way into quite a bit of job security right up to the Depression. You can …there are accounts of what happened in the twenties … what life was like in the twenties that aren’t very … that are very similar to the accounts today of job insecurity and layoffs. But the difference was that the trajectory was upward … toward job security. And when the Depression hit, while there was terrible, terrible trouble, the reaction was to do something about it as best the country could do.

So that after the war everybody believed in job security as a necessary component of our lives. And Thomas E. Dewey even … from Thomas E. Dewey all across the line … and you can read all sorts of horrifying accounts of the way we lived in those years, but they’re … they’re almost always absent … there’s always … everybody has a job it looks like and …

HEFFNER: Okay, Lou, let me then ask the next question. What in the world happened?

UCHITELLE: All right. We got to the late seventies and suddenly we weren’t the hegemonic power any more. We couldn’t control, we weren’t the only one selling … not only to ourselves, but to the rest of the world, there was the famous arrival of the Japanese cars.

I talk about Stanley Works which suddenly woke up one day and found that those hand tools from …coming from Asia were equal in quality to their own and quite … and quite a bit less expensive. And we reacted quite logically and fairly, but cutting labor costs by seeking efficiencies.

It was done very carefully … one of CEOs that I know, Don Davis at … I, I chronicled the lives of three CEOs … how they evolved into … from resistance to layoffs into enthusiastic supporters of them.

He finally decided he had to, to layoff somebody …white collar workers … he went out around the whole plant … every plant in the network of Stanley Works and personally spoke to the workers, explaining why he had to do this. That’s not a terrible thing to do. You don’t get that anymore. That was at least recognition that this isn’t a good thing.

Well, so we moved slowly …but then his successor was less concerned about it … and we …

HEFFNER: And his successor much less …

UCHITELLE: … concerned. And then you had all sorts of other things. We closed steel mills. Carter at one … for the Campbell works was ready to loan money to modernize it because that particular Campbell works had fallen behind in technology, needed either to be closed or modernized.

The choice was to modernize it with the community taking over and then that was abandoned. All these efforts fell away. The Catholic Church put out Pastoral letters in the eighties, calling for job security …that was abandoned. Step after step after step …

HEFFNER: You’re making it sound inevitable. And that’s the question that I’m asking ….

UCHITELLE: All right.

HEFFNER: How do you reverse this?

UCHITELLE: You reverse it by recognizing … now let me say that this is the longest … I mean we had a 90 year trajectory upward toward job security, we now have a 30 year trajectory away from it. So that’s a long period.

How do you reverse it? I don’t think the market can, by itself. I think unless there’s a … I think … the first thing I would do would ask people to recognize this history, to recognize that what’s happening to them is not inevitable. I don’t know how many times I’ve talked to people who say, “Well what else can go, go on … it’s globalization.”

HEFFNER: Well?

UCHITELLE: But … almost every company … or many, many companies that I go to deal with this not … let me just sort of put it … instead of 100 layoffs, they have 50 layoffs. The best companies avoid layoffs or limit them.

Harley Davidson, for example, got into terrible trouble in the eighties … motorcycles were not selling … it was about to go bankrupt. Reagan stepped in with temporary import controls limiting the, the arrival of Japanese motorcycles … large motorcycles. Harley Davidson, to make a long story short got back on its feet … it got into an agreement with its union … this is very important, there is no … there has to be some element of labor power.

Now every time the company wants to cut labor costs … which it does pretty regularly … or gets into automation … it reorganizes … there is a discussion with the union as to what to do … how to transfer somebody … how to … you know … how to deal with this issue.

The union often loses. I’ve been out there, I’ve talked to these people, you can hear … some pessimistic union leaders. But the upshot is no one’s been laid off at that company in the last decade. Or virtually no one. It doesn’t mean they won’t be tomorrow, but …

There is a way to fight back, to push back … instead of doing that, however, we have embraced a myth that’s very hard to reverse. And its truly a myth. It is the myth that … first of all, that the victim is responsible for his own layoff … his or her own layoff. He or she, in fact, doesn’t have value.

And we reinforce it with this idea that education and training is the solution. It’s a very nice, convenient idea for everybody involved. All you have to do is segue from a job into education and training and to qualify you for all those wonderful jobs “out there.”

Well, the fact … it’s heartbreaking to watch highly skilled mechanics, or white collar workers go through this process and then find that there aren’t good jobs out there. Both anecdotally and statistically, and we don’t publish these statistics very much, it’s very clear that the number of well paying jobs out there is much less than the demand for them from people who are skilled and able to fill them.

HEFFNER: But isn’t that the problem? Not just the problem, though I grant it’s a very important … of dealing with these people as your friend in Connecticut wanted to deal with them at Stanley and as some major corporations do … not many …

UCHITELLE: MmmHmm.

HEFFNER: … and fewer and fewer. But the harsh, cold realities of world that we will accept as flat, as your friend Tom Friedman would call it.

UCHITELLE: MmmHmm.

HEFFNER: That we’re talking about economic realities.

UCHITELLE: We are and, and so we have to deal with it economic realities.

HEFFNER: How would you do it? Would you become …

UCHITELLE: Well …

HEFFNER: … should I use the word protectionist?

UCHITELLE: No. I would start by saying we’ve raised this issue twice before. We raised it when the Employment Act of 1946 came up. We raised the issue … can the private sector, even with the best will in the world create enough good jobs for everybody who wants them?

HEFFNER: The answer is “No”.

UCHITELLE: The answer seems to be “No.” And the answer is “No”.

HEFFNER: Okay.

UCHITELLE: We faced that in ’46 when we were coming out of … we were afraid the Depression would come … we decided, as a nation, not to make the government … I’ll use the phrase “employer of last resort” … I don’t mean government jobs. And so we put them aside.

It came up again in the mid-seventies, there was a terrible recession just as the debate was getting started over what eventually became the Humphrey/Hawkins Act. And Augustus Hawkins, a Black Congressman from Watts, where there was terrible unemployment … said, “This Act in the early drafts, should include, as a guarantee of full employment, government as an ‘employer of last resort’ either through direct employment when the unemployment rate got to a certain level or rose above a certain level or through projects.”

And we have huge numbers of public works projects that are going undone right now. That are, in fact, the role of the public sector, not the private sector. Dam control … I mean we need trillions of dollars to bring our defenses against hurricanes up to, up to par.

So that would be … that act … that was dismissed, it was defeated. The Hawkins Bill … the Humphrey/Hawkins Act finally, because Carter decided against, against putting in … that inflation was a bigger worry to him than job guarantees or jobs for everyone who wants them at a good wage. Industry was dead set against them. It meant raising wage levels to a certain degree.

We put it aside. We never recognized … and we should recognize … that the private sector … even the most vibrant private sector … and America’s is a vibrant, wonderful private sector … can’t keep everyone employed who’s … at skilled jobs. Everyone who wants those skilled jobs.

And it’s terrible when you have airline attendants, for example … 37% of them … I think I have that right … maybe it’s 33% have Bachelors of Arts degrees. Well, you don’t need a Bachelor of Arts degree to be a flight attendant; it’s very hard work, but it doesn’t require a Bachelor of Arts degree.

It means that there is a high percentage of people in America, in a number of industries … and the Labor Department “stat” is clear on this, are working at jobs beneath their skills.

HEFFNER: May I ask you a simple, but I think a very basic question. Do you think that within what we now define as a capitalist free enterprise society, economy, that we can achieve what you want to achieve?

UCHITELLE: I think we can achieve it only if people push for it, only if we discard the myths, particularly this myth that its “your” fault and that there … and that … and this is a Democratic myth and a Republican myth that only you need to do is re-train for these good jobs. If we can un-do that myth by realizing, by reading this book, if you will, or getting the history … and reading …and political parties begin to form or … it has to come from the bottom, is what I’m saying.

And I’m trying to un-do in people this idea that what is happening to them is inevitable.

HEFFNER: It’s …

UCHITELLE: Only then will there be some push-back …

HEFFNER: I understand what you say about “it has to come from the bottom”. I happen to think that you’re wrong … that it really does have to come from leadership at the top to point out what you are pointing out in this book … in your work as a journalist at the Times …

UCHITELLE: Let’s say it has to come by from, from both sides; from the bottom and the top.

HEFFNER: Okay. From the bottom … we’ve seen, if you’re talking about labor unions … kaput … I mean, no more.

UCHITELLE: Yeah. That’s right. And partly through their own fault, perhaps.

HEFFNER: Aren’t there too many people in high position who were benefiting so much from the economy that produces this scary business that you report on, for us not to be able to assume that change is going to come from that direction.

UCHITELLE: Well, I think you’re right. I, I also despair a bit, but I don’t allow myself to despair because if you allow yourself to despair then you fall into the … into the acquiescence. I would say that …

HEFFNER: Don’t you become more realistic and it’s going to require realism.

UCHITELLE: Well …

HEFFNER: Not pie in the sky.

UCHITELLE: … that’s the first step. Well, I’m giving you realism. Now I’m saying with the realism there if people see this realism, if they see that they’re emotionally damaged … if the American Psychiatric Association … I asked them about this … would put a warning label on layoffs, CEO’s might be a little more cautious about throwing people out.

HEFFNER: They’re not even cautious about the drugs that are carrying warnings.

UCHITELLE: That’s true. But it’s a step, it’s a small step in the right direction. Right now we have a system where the CEOs don’t have to worry about it because it’s the workers fault, all they have to do is get re-trained.

The government … neither the Republicans nor the Democrats have to worry about it … “re-training” that’s all you have to do! Our only concern is do we have enough funds out there for re-training. And it’s easy. It’s easy politics, it’s easy market behavior and it leads to an excess in layoffs. I’m hoping … and the best companies avoid …

HEFFNER: Do their best to try to minimize …

UCHITELLE: They do their best to try to minimize and some actually avoid it. But let’s just stick with minimize. We are not a hegemonic power any more. There are going to be, in this market place, layoffs. The goal is to minimize it. And that requires a social … a decision … a political and a social decision. It requires people realizing that they’re being damaged and what can we do to alleviate that damage, to recognize their pain. Part of it is just plain discussion I guess. And part of it is an effort on the part of management to say, “now I have to downsize, but … to cut labor costs … now how do I do it?”

But we, in fact, are using layoffs now far beyond what’s necessary. So that would be the first step. And maybe we get out of what these Chief Executive salaries … which have gone so far out of, out of bounds that any … every American knows that they are excessive. And you begin to look and you begin to connect the dots and maybe you get a reaction.

HEFFNER: How come, in the minute we have left. How come there aren’t more people shouting out the window … “I’m mad as hell and I’m not going to take it any longer.”

UCHITELLE: I think there are a lot of people quietly shouting out the window right now. I found, talking to the people who I have in this book, that they were so glad to have someone who would talk to them, who would hear their hurt. I couldn’t cut off interviews they were so upset about what was happening to them.

And I discovered then, something I never knew when I started this book, how much damage was being done to them as human beings. Since I’ve written this book I’m getting papers, I’m getting E-mails from academics who are saying, “You know I’m studying the physical ailments that arise from job stress. I’m seeing other damage …human damage … from this layoff phenomenon that we have … this job insecurity phenomenon which is really the right, broader term.”

So I think there are … I’m doing it in a book. But I think quietly many, many people are crying in distress.

HEFFNER: Won’t that be demonstrated, one way or the other, in the Congressional elections of 2006 and in the Presidential election of 2008?

UCHITELLE: Well I think, as you do, if the, if the politicians, if the Democratic Party or the Republican Party … the Democratic Party I suppose, doesn’t embrace this … then it’s hard … it takes … you have to go from the top to the bottom and it would be tragic if we have to wait till there’s some real crisis before people see the light.

I cannot get the Democratic Party … the Clinton wing of that party to acknowledge that, that … that training and education isn’t the solution.

HEFFNER: It’s so interesting … you say “real crisis”. For the last 50 years going back before what you see as the “new” trend began even …people at this table “ay de me-ing” about how bad this is or that is … and when you would ask after the program … what do you think is going to lead to a change? Invariably it was … “another war, a major war or a major depression.” And that’s a hell of a note to end on, but your book “The Disposable American” is just superb. I hope everybody reads it and thank you very much for joining me on The Open Mind.

UCHITELLE: Thank you for having me.

HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time, and if you would like a transcript of today’s program, please send $4.00 in check or money order to The Open Mind, P. O. Box 7977, FDR Station, New York, New York 10150.

Meanwhile, as an old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.

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