April 9, 1996 in City

Workers Don’t Deserve Corporate Brutality

David Moberg Special To Newsday
 

Although years of big corporate jobs cuts have left millions of Americans nervous about their economic futures, there are only scattered signs of protest. That is because most people do not realize how little “downsizing” reflects simply an iron law of economic nature.

In reality, downsizing is largely a short-term strategic choice to make stockholders and managers richer and more powerful at the expense of the workers who built the companies. If edgy employees were to become aware of the possibility of having greater economic security along with efficiency and innovation - and if political leaders, social movements and unions provided an alternative for collective action - we would see a new populism arise. Its demand? That corporations be accountable to workers and citizens alike.

Economic anxiety clearly is on the rise. The economy is growing modestly and the stock market is booming, but many profitable corporations continue to announce huge, permanent layoffs - roughly 100,000 in January, including AT&T;’s cut of 40,000 jobs. As a result, a third of Americans fear someone in their family could lose a job this year.

So far, this turbulent uprooting of millions has provoked more private pain than public protest. There are exceptions: Unionized workers at Caterpillar and Boeing have recently fought for - but not often won - a measure of job security. Patrick Buchanan provocatively has raised the issue of corporate ruthlessness. Labor Secretary Robert Reich and several congressional Democrats have proposed rewarding corporations that treat their employees well.

Yet most workers deal with their fates through individual survival strategies rather than political action or unions (which represent only 11 percent of the private work force). Most people subscribe to the popular belief that their success is entirely due to their own merit. Now, when they’re axed, many ask, “What’s wrong with me?” rather than, “What’s wrong with our economic system?”

Unlike a sudden factory closing, with these new layoffs, it is usually unclear who will go and when. A few file lawsuits, but most simply want new jobs fast and do not identify with other corporate castoffs. The potential for protest is also reduced when unions have won “buffers,” such as transfer rights or severance pay, and when personnel chiefs adopt strategies to defuse white-collar anger.

Although some of those left behind may hope desperately to survive by working harder, many demoralized employees refuse to exert effort for a disloyal, uncaring company. Still, overt protest is missing in large part because of a widespread belief that there is no alternative to corporate ravages. Starting in the 1970s, corporations convinced many people that they had to chop wages and jobs to be globally competitive. But much current job-slashing has a lot more to do with increasing the wealth of stockholders and top managers. A 1994 study, for example, revealed that factories that increased employment in the 1980s contributed as much to productivity growth as those that cut employment.

Some corporations announce - even exaggerate - job cutbacks to boost stock prices, because Wall Street sees blood in the streets as smart, profitable business. Higher stock prices enrich shareholders and executives (including $5 million for AT&T; Chairman Robert Allen) at the expense of not only fired workers but also the rest of us. These social costs include unemployment, reduced incomes, wasted talents (premature retirement) and increased income disparities.

At a time when it is widely accepted that corporations shouldn’t shift production costs off their balance sheets by polluting the environment, we should recognize they similarly shouldn’t shift the costs from strategic changes designed to enrich stockholders.

Jobs will change along with markets and technology, but alternatives to downsizing can employ workers’ skills and provide job security. In rejecting these, management can’t claim infallible wisdom: Allen pushed the disastrous $7.5 billion acquisition of NCR at great cost to AT&T.;

New federal policies could create job-preserving strategies. National corporate charters could guarantee employees a voice in major corporate decisions. Companies could be mandated to provide substantial severance pay and worker-education funds. If the Federal Reserve adopted policies to promote faster growth, business would also have more opportunities to profit without downsizing.

Now, more people are angry with big government than with big corporations, in part because neither the politicians nor coherent social movements are proposing guidelines for socially responsible business. Indeed, corporate influence in both political parties stifles needed debate and leaves the victimized, loyal employees to suffer their downsizing in confused and anxious silence rather than being roused to justifiable protest.

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