Business Downsizing
Newspapers are an imperfect instrument. But at their best - their rare best - they can illuminate a profound problem that society has not perceived or understood.
That is what The New York Times was doing last week in a series of articles called “The Downsizing of America.” The series has put human faces on those large, abstract figures of jobs eliminated at AT&T, Chase Manhattan Bank and so many other companies.
The stories have shown us not just individual pain but also the social consequences of the ruthless new economy: the loss of community, the rootless family, the fraying of hope.
Here is James Sharlow, a $130,000-a-year plant manager for Eastman Kodak who had 26 years with the company until he was laid off six months before he would have been entitled to a full pension.
Here is Steven Holthausen, once a $50,000-a-year bank officer but now a $12,000 tourist guide whose wife and children left him as a loser.
Since 1979, more than 43 million jobs have been lost in this country. More new ones have been created.
But middle-class people have been laid off in larger numbers than before, and the new jobs tend to be lower-paid ones.
The struggle to stay in the middle class exacts a high price. Husbands live 1,000 miles from their families because that is where a job is; a highly skilled machinist, confronting the fact that his layoff is permanent, goes without health insurance for his family.
A particularly significant phenomenon is the weakening of community life, of the private associations that everyone from Alexis de Tocqueville on has seen as a crucial factor in American society.
People desperate for work do not have the time or the will to volunteer for churches or Boy Scouts or the United Way. Fewer and fewer people feel attached to any community.
The New York Times series should provoke fresh reflection on where our society is going in a world driven by market economics. What social and economic policies might reduce the damage to individuals and communities?
One thing seems plain: We cannot look to the magic of the market for solutions.
A culture provides the values of community and caring; if the society does not supply them, the market certainly will not. If the society does, the market adjusts to them; thus, Japanese companies have resisted layoffs despite several years of recession.
In the whirling economy of America today, hardly anyone can expect lifetime employment with a single company. It follows that people cannot look to companies for lifetime security.
But people must have that security in order to move from one job to another with a degree of confidence.
Government has to act to provide the needed assurance.
That is why Congress is working on a proposal to make health insurance portable - to guarantee that someone laid off in San Diego will not be turned down by the insurance company at his new job in Chicago because of a pre-existing medical condition.
Another evident need is to boost economic growth - to overcome the Federal Reserve’s shibboleth that anything more than 2.25 percent growth a year would be dangerously inflationary.
And if we want to avoid the menace of social resentment, we must reverse the trend of enriching the very rich - the trend that has seen the chief executive officers of some major American corporations go from 35 times the wage of the average worker 20 years ago to compensation that is 187 times the average wage today.
The irony is that we are being confronted with these daunting new social and economic realities at a time when the American public has had dinned into it the notion that government is evil and should be dismantled. The new realities are an answer to Gingrichism.
In fact, we need a much bigger government commitment to education; we need more college scholarships, not fewer.
There must be - there will be - government responses to the social costs of downsizing.
Republican presidential candidate Pat Buchanan has offered his unconvincing solution: Build tariff walls around the country.
Will President Clinton offer better ideas?
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